Shoe companies pay millions for walking ads
A 30-second commercial at this year's Super Bowl will cost an advertiser $4.5 million, and if you get up from your couch, you might miss it.
Meanwhile, shoe companies will provide major universities in this area similar figures in payments and merchandise this year, and the corresponding advertisements are enduring — and everywhere.
Scroll to the end of the story for a breakdown of contracts: Louisville, Kentucky, Indiana and Western Kentucky.
When the University of Kentucky basketball team plays one of its many nationally televised games, there are the Wildcats, draped head to toe in Nike gear. When former University of Louisville quarterback Teddy Bridgewater used to drop back to pass, there was the iconic adidas logo, positioned in clear view right above the No. 5 on his jersey. At the stadiums and arenas, there are always swooshes and stripes visible somewhere, either on the players' feet or stadium signage.
"When you sponsor a team, you've got essentially six or seven months where you can get exposure, where the brand can associate itself with that team," said Christopher Cakebread, a Boston University advertising professor. "And as ESPN or any local network broadcasts the game, it's exposure to not just the fans in the arena, but the fans on TV."
Of course, these relationships are mutually beneficial. While the shoe companies get invaluable exposure as well as the rights to monetize a university's brand, the schools receive equipment, annual payments and royalties from merchandise sales. They are two heavyweights joining forces. The contracts constantly get larger, and the stakes constantly get higher. Yes, this is amateur athletics, but it is also big business.
"We want to walk hand-in-hand with Nike," said UK deputy athletic director DeWayne Peevy, "identifying ourselves with that kind of power brand."
"It's both brands elevating one another," said Brent Seebohm, U of L's associate athletic director for external relations.
For the universities, the money has a minimal impact on their bottom lines. For example, this year Nike will pay UK $1.8 million, and the university's athletics department has a $110 million operating budget. But the partnerships are important, their value extending beyond dollar amounts. The schools have access to high-end merchandise that can improve performance and even intrigue potential recruits.
"Yes, it's a large-size partnership with a lot of facets, but for our sports programs and uniforms, we wanted to be adidas' most innovative school," Seebohm said.
Through open-records requests, The Courier-Journal acquired the most recent shoe company contracts from the University of Louisville (adidas), the University of Kentucky (Nike), Indiana University (adidas) and Western Kentucky University (Russell Athletic).
U of L's new agreement with adidas has not been finalized, but the Cardinals are expected to receive $2 million in base compensation this year, which would put U of L ahead of UK ($1.8 million), IU ($835,000) and WKU ($135,000). UK did, however, receive a $2.4 million signing bonus upon extending its contract with Nike in 2013.
The deals generally call for coaches to make appearances on behalf of the shoe companies and for coaches and student-athletes to wear the companies' apparel during events. There are also facets of the contracts unique to each university.
For example, Indiana's deal with adidas states that if it does not still have the company's eighth-ranked contract after four years, it will be elevated to that level.
Story continues below Pitino's remarks on shoe contracts
At Kentucky, if an athlete has to wear a non-Nike shoe for medical reasons, the brand must be taped over and it cannot be promoted by the university.
And while each university is required to make its head coaches available for appearances, Western Kentucky's deal also stipulates that the school's fluffy mascot, Big Red, be included. Here are breakdowns of the schools' contracts:
Most recent contract: Signed July 1 2008, and runs through June 30, 2016
Base payments received by IU: 2013-14: $850,000, 2014-15: 860,000, 2015-16 $870,000
Tickets and hospitality given to adidas by IU (for home, neutral site and postseason games):
Other sports: Two tickets to each event.
• Adidas sponsors two annual internships for IU students valued at $18,000 apiece.
Most recent contract: Signed Oct. 3, 2006, and extended through 2024-25 season
Base payments received by UK: $1.8 million per year
Bonus: UK received a $2.4 million signing bonus May 14, 2013.
Tickets and hospitality given to Nike by UK:
• Football: Eight tickets to home games and 12 to bowl games.
• Men's basketball: Eight for home games and eight for postseason tournament games.
• Women's basketball: 12 for home games and eight for postseason games.
• Other sports: Four tickets to each home game.
• Nike has one internship at its world headquarters for a UK student each year, valued at $10,000.
Base payments received by U of L: 2014-15 base compensation of $2,035,000, per the new deal.
Merchandise: U of L receives $4.21 million in adidas product this year, using retail prices.
Tickets and hospitality given to adidas by U of L:
• Football: 12 season tickets and bowl game tickets. Three hospitality tents with 25 extra tickets.
• Men's and women's basketball: Four to six season tickets and NCAA and ACC tournament tickets.
• Adidas funds scholarships for its new athletics administration internship program for 21 students.
Exclusive partner: Russell Athletic
Most recent contract: Signed in 2007 and amended and extended in 2010 through June 2016
Base payments received by WKU: $135,000 in 2014-15 academic year; $140,000 in 2015-16
Performance incentives (partial list)
Tickets and hospitality given to Russell Athletic by WKU