How will Nike controversy impact revenue at Clemson?

How will Nike controversy impact revenue at Clemson?

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How will Nike controversy impact revenue at Clemson?

It has been hard to go on social media or turn on the television this week without hearing about Nike’s decision to use Colin Kaepernick to advertise their products.  Lets take a look to see how the controversy might impact the revenue Clemson receives from Nike.

Clemson announced last month it extended its contract with Nike, which has provided apparel for Clemson’s athletic department and sports teams since 2002. The partnership will extend through the 2027-’28 academic year.

The new agreement will grant Clemson approximately $58 million dollars in apparel allowances and direct cash payouts over the next 10 years.

“Nike came to us, and we still had a couple of years on our current contract,” Radakovich said back on Aug. 3. “It kind of said that we were good partners, and we wanted to be able to make sure we could keep this moving forward for a number of years.”

The Clemson Insider reached out to Clemson Athletic Director Dan Radakovich to get details on how the new Nike deal might be impacted.

Radakovich told TCI on Friday the cash is fixed at $400,000 per year for 10 years. The other value is the amount of gear they receive from Nike for “our teams, which is approximately $5.4 million dollars per year in retail value.”

The new agreement more than doubles the annual value of the previous agreement between Clemson and Nike, including a cash increase from $115,000 to $400,000 annually.

Together, the two create the $58 million-dollar deal.  So the $58 million deal should not be impacted by the Nike controversy.

The new arrangement placed Clemson in the top tier of Nike’s collegiate partnerships. Clemson was able to convince Nike to expand its previous deal from 2014 based on its increased merchandise sales following the most successful three-year run in the school’s football history.

However, there is some unknown in how the Nike controversy could affect the licensing revenues (the sale of the merchandise). The percentage Clemson received in the new agreement did increase from 11 percent to 14.

“They have a lot of different metrics, many of which we are not privy to, to measure a brand’s value to Nike,” Radakovich said. “But one of the things they did share with us was the fact that they saw the leap of sales of our merchandise. Certainly, that is a testament to the success that our football program has had.”

The impact to Clemson’s licensing revenue will depend on how their fans react to the Nike controversy.  That answer won’t be known for a while.

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