AJC Article on Value of Adidas Deal

[travgt01]

It's been done 5 times since 2000, (2000, 2006, 2008, 2009, 2014, 2016), but your point remains.

bama, fsu, mia who else? tosu and oregon? Boise's probably done it multiple times.

 

[SimpleGT]

Good points GTJacket. It also makes me wonder whether there is some understanding that Adidas will offer GT students internship or co-op opportunities.

 

[GTFLETCH]

200K per year, for a total of 1.2M over 6 years... WOW we really have a branding issues if we have to take a 750K loss to switch apparel companies... (RA paid 950K this year)

 

[kg01]

We've had "branding issues" for decades. Perhaps the money give-back, so to speak, is us paying them to fix those issues. I'm totally ok with that, if so. It's time for us to get dragged into 2018 instead of languishing in the early 90's.

 

[Deleted member 2897]

200K per year, for a total of 1.2M over 6 years... WOW we really have a branding issues if we have to take a 750K loss to switch apparel companies... (RA paid 950K this year)

I believe this opinion lacks perspective and context on the bubble that has burst in apparel deals. I think the most important measuring sticks are in the last 3 months and going forward. I just tried to Google newly signed Adidas contracts, and all I could come up with around the end of the year was USF - our contract was higher in both money and apparel. I guess we will see going forward - but the value of apparel contracts has collapsed into a super massive black hole recently. Under Armour's business completely tanked to the point they missed earnings estimates, laid off tons of people, and had their debt downgraded to Baa3 - which I believe is only 1 step above what analysts call Junk.

 

[Augusta_Jacket]

It's been done 5 times since 2000, (2000, 2006, 2008, 2009, 2014, 2016), but your point remains.

OK. I misread your post. I thought you said we had only won 9+ games in a season 3 times since 2000. As for 9 in a row, I would imagine that few schools have hit that mark in back to back years.

 

[Augusta_Jacket]

We've had "branding issues" for decades. Perhaps the money give-back, so to speak, is us paying them to fix those issues. I'm totally ok with that, if so. It's time for us to get dragged into 2018 instead of languishing in the early 90's.

For all I am glad we are with someone besides Russell, I don't think switching to Adidas is going to fix our branding issues, and I don't think Adidas will be the ones to fix it. Instead, I see the new contract as a first step by the GTAA to fix our branding issues. Adidas can be a contributor, but unless the GTAA drives the change, our brand will continue to suffer. Switching to Adidas is a step in the right direction, but, IMO, they are neither the solution or the people to solve our problems.

 

[GTFLETCH]

I believe this opinion lacks perspective and context on the bubble that has burst in apparel deals. I think the most important measuring sticks are in the last 3 months and going forward. I just tried to Google newly signed Adidas contracts, and all I could come up with around the end of the year was USF - our contract was higher in both money and apparel. I guess we will see going forward - but the value of apparel contracts has collapsed into a super massive black hole recently. Under Armour's business completely tanked to the point they missed earnings estimates, laid off tons of people, and had their debt downgraded to Baa3 - which I believe is only 1 step above what analysts call Junk.

August 25 2017... After Georgia Tech signed with Adidas... 10-Year, $160 Million Apparel Contract... Louisville's deal with Adidas at $16 million a year is $7 million more than any other apparel deal for an ACC school.

Also Rutgers signed with Adidas Feb 2017...I do think are deal is better than theres.. which is a 6year 11M (10M in product 1M in marketing dollars)
Link
http://www.nj.com/rutgersfootball/i...he_financial_details_of_rutgers_adidas_d.html

Well for all those who said that we need a new deal bcuz we lost recruits for being with RA, it is time to see those 4 and 5 stars flood in as losing over 700K is going to be hard to over come (basically we will need to new football fundraising initiative reach their goal plus cover the 700K loss)

 

[Ibeeballin]

http://www.nj.com/rutgersfootball/i...he_financial_details_of_rutgers_adidas_d.html

Looks like we are viewed just a bit better than Rutgers

 

[jgtengineer]

August 25 2017... After Georgia Tech signed with Aididas... 10-Year, $160 Million Apparel Contract... Louisville's deal with adidas at $16 million a year is $7 million more than any other apparel deal for an ACC school.

We also know that Louisville is a huge basketball draw, enough so that they wanted people going to Louisville. They also have a recent heisman winner wearing adidas.

 

[kg01]

For all I am glad we are with someone besides Russell, I don't think switching to Adidas is going to fix our branding issues, and I don't think Adidas will be the ones to fix it. Instead, I see the new contract as a first step by the GTAA to fix our branding issues. Adidas can be a contributor, but unless the GTAA drives the change, our brand will continue to suffer. Switching to Adidas is a step in the right direction, but, IMO, they are neither the solution or the people to solve our problems.

We are in agreement. You articulated my thoughts significantly more eloquently than I did. Wait, are you in my brain?

Seriously though, I vaguely recall a bit about them partnering with us on some innovation initiatives here in the city. Stuff like that will go a long way to showing the folks on our side what actual marketing in 2018 looks like.

It'll certainly be a big upgrade over what we've probably been used to. Like going from riding one of those old-timey bicycles with the one huge wheel to riding a Ducati.

ETA: On the Lville deal, I recall adidas was outfitting all their sports whereas ours is fball/bball only? First is that right? Second, does that impact the $$ numbers?

 

[GTFLETCH]

On a positive note..Tech athletes and coaches should have plenty of three-striped gear to wear as we are getting over 2.9M in product

 

[Augusta_Jacket]

We are in agreement. You articulated my thoughts significantly more eloquently than I did. Wait, are you in my brain?

Seriously though, I vaguely recall a bit about them partnering with us on some innovation initiatives here in the city. Stuff like that will go a long way to showing the folks on our side what actual marketing in 2018 looks like.

It'll certainly be a big upgrade over what we've probably been used to. Like going from riding one of those old-timey bicycles with the one huge wheel to riding a Ducati.

ETA: On the Lville deal, I recall adidas was outfitting all their sports whereas ours is fball/bball only? First is that right? Second, does that impact the $$ numbers?

What other sports would UL have that would dictate that kind of revenue difference? I don't think Golf, Baseball, and the Olympic Sports would generate that much of a financial impact.

Agreed on all else, and no, I am not in your brain.

 

[kg01]

What other sports would UL have that would dictate that kind of revenue difference? I don't think Golf, Baseball, and the Olympic Sports would generate that much of a financial impact.

Agreed on all else, and no, I am not in your brain.

*gasp* That's exactly what I was thinking!

 

[Deleted member 2897]

August 25 2017... After Georgia Tech signed with Adidas... 10-Year, $160 Million Apparel Contract... Louisville's deal with Adidas at $16 million a year is $7 million more than any other apparel deal for an ACC school.

Also Rutgers signed with Adidas Feb 2017...I do think are deal is better than theres.. which is a 6year 11M (10M in product 1M in marketing dollars)
Link
http://www.nj.com/rutgersfootball/i...he_financial_details_of_rutgers_adidas_d.html

Well for all those who said that we need a new deal bcuz we lost recruits for being with RA, it is time to see those 4 and 5 stars flood in as losing over 700K is going to be hard to over come (basically we will need to new football fundraising initiative reach their goal plus cover the 700K loss)

Well technically Louisville's deal was finalized then. Our Russell deal goes through next June. When we announced we were going with Adidas, no terms had been agreed to yet. Our terms are just now being finalized.

 

[jgtengineer]

What other sports would UL have that would dictate that kind of revenue difference? I don't think Golf, Baseball, and the Olympic Sports would generate that much of a financial impact.

Agreed on all else, and no, I am not in your brain.

Do not underestimate the draw of basketball on shoe sales.

 

[Augusta_Jacket]

*gasp* That's exactly what I was thinking!

Great minds and all.

 

[Augusta_Jacket]

Do not underestimate the draw of basketball on shoe sales.

Agreed, but isn't Adidas also our BBall supplier? Granted, ULs BBall brand is MUCH stronger than ours...

 

[GTFLETCH]

We also know that Louisville is a huge basketball draw, enough so that they wanted people going to Louisville. They also have a recent heisman winner wearing adidas.

So basically

My thought on the cash part of the deal: As I understand the rules; schools can't give any more money to the student athletes than the NCAA rules specify: full scholarship, plus a "cost of attendance" stipend. But they can provide gear. With this deal, Tech is near the top in the amount of gear they'll be able to give out. Probably be good for recruiting when our guys can show visiting recruits a closet jam-packed with Adidas swag. The total amount of the deal puts Tech at 31st. Which is probably generous considering the size of our community.

Also, the GTAA total budget is around $80 million. So, the 700k difference in cash is a relatively small amount in the grand scheme. Plus, with the ACCN coming online there's new money coming from there. I suspect ADTS also has some confidence he can enhance the revenue stream through other means; better fundraising, adding value to ticket sales with things like a 'party deck' at BDS like they did at UCF, etc.

It's also been reported that Adidas plans to partner with Tech in the Atlanta area on research, development and marketing. So, a direct cash payout simply may not have been the most efficient way to add value to the deal for Tech.

We currently rank 11th out of 15th in Athletic Rev/Exp... just ahead of Wake Forest, BC, and NC State (NC State may have surpassed us)..
So while 700K doesn't seem like much, We need all the money we can get!

Here are the ACC rankings for total revenue and profit (July 1, 2014 until June 30, 2015):

Team
Notre Dame-----$121,260,381
Florida State-----$120,822,522
Louisville---------$104,325,207
Duke--------------$91,688,202
Virginia-----------$91,256,772
North Carolina--$89,128,256
Syracuse-----------$87,175,761
Clemson-----------$83,534,371
Virginia Tech-----$80,230,095
Miami--------------$77,724,833
Georgia Tech------$77,202,758
NC State------------$76,834,603
Boston College ---$69,300,736
Wake Forest-------$58,672,116

Link
https://www.nunesmagician.com/2016/...ofit-margin-in-the-acc-budget-earnings-orange

 

[GTFLETCH]

Tech will receive an average of $3.11 million annually from Adidas in cash and product over its six-year contract.

The school will receive $200,000 annually in cash over the six-year contract that begins July 2018 while the allowance for gear will average $2.91 million, beginning with $3.05 million in the 2018-19 academic year. (Tech is receiving $950,000 in cash and $1.35 million in apparel from Russell Athletic in the final year of their contract.)

The cash “retainer fee” will increase annually by $1 million if the Jackets win a football national championship, $500,000 if they win the ACC and $250,000 if they appear in the ACC title game two years in a row. The retainer fee will be adjusted by $450,000 if the team wins nine games in a row in back-to-back seasons.

Of those seven incentives, Tech has accomplished one of them (football ACC championship in 2009, since vacated) since 1998. If we win the ACC in football again, we will only get 500K taking us to 750K which is less than the 950K RA paid us this year! It would appear that we have been ripped off. I can here the ugag fans "Bunch of engineering nerds with zero business sense"