Baylor in Arlington, Wazzu
in San Antonio and now possibly Duke in Orlando. Can't wait to book those travel plans. Notre
Dame has managed to turn Rockne's barnstorming legacy into a Harlem Globetrotteresque
traveling football exhibition. Are we going to have the bucket of confetti trick? A skills show at half-time? I'm only half-kidding here, if you've been to an ND basketball game you know that cheese and class don't get in the way of marketing.
But even as I contemplate the scheduling debacle, I'm trying to figure out who's the biggest stooge in Shoegate
Adidas for giving Michigan this deal and letting him blab about it or ND for signing a deal without it. Regardless, ND needs to bring Adidas to the table Michigan's AD for blabbing about his most favored nation status with Adidas, ASAFP. This is an abhorrent way to treat a strategic partner and points out that either Adidas is doesn't value Notre Dame as its top partner or Adidas doesn't respect Notre Dame's leadership.
Here's an excerpt from the Ann Arbor News with Bill Martin talking about his new deal with Adidas:
So, here's Nike with an offer they say would be the highest contract they have in college sports, and I'm still concerned, because these are long-term deals. How ever I set this up is going to impact this place for a long, long time. The long and short of it is, we were very fortunate with our timing. Adidas was hungry to have a major college brand and they laser focused on us. If you look at their strategy, they take one or two schools in every conference, and that's it, whereas Nike tries to saturate the country with all schools. (Adidas) has Tennessee, Notre Dame, UCLA and Wisconsin. Everybody has said Notre Dame has the richest Adidas contract, but you can't get it, because it's a private institution. I know this contract exceeds it.
I'll name some of the unique features in this contract. There is a $6.5 million signing bonus. There is never a signing bonus. We're going to get it in two weeks. What am I going to use it for? I have to finish up this facility stuff and get Crisler going. If I had any spare bucks, it'd go into endowing scholarships. It's pretty simple.
We've got an annual (Consumer Price Index) escalator. Annual.
We got a most favored program clause. There's never going to be an Adidas school that gets a nickel more than us, either in product or money.
Q: How important was the favored program clause?
Martin: Very important, if they raise the cap. They may say, hey, no problem, we're not going to pay anybody else any more than this. I don't know. But over an 8-year period, there's a chance that will happen. I couldn't get that from Nike. I wanted it, and they said they would guarantee we'd have the highest contract at the time the contract was signed.
Q: It's interesting to me how much that particular clause has meant to your fans. It's gotten a lot of buzz.
Martin: Did it? That's a pride factor. Nobody is going to be better than us. I'm glad they recognize that, because it was important to me. It makes me feel like I did my job.
The other thing we received is that ... you know, markets go in cycles. Eight years from now, who knows what the situation is going to be economically. The market may be way below where it is now. I've seen that happen in my business career. Well, guess what? We have the option to extend. It's no lose. If the market's gone up, we negotiate a new deal. If the market's gone down, we say we like this deal and we'll keep it another five years.
Now again, that this happened is bad, but fixable. However if Adidas is going to force us to do stunts like wear green jerseys to generate revenue and then give Michigan an advantage over the Irish at the table, it's time to demand immediate action.
Here's what Adidas said when they signed Notre
"Notre Dame is unmatched in its history and legacy in
the world of college athletics," said Martyn Brewer, director of sports
marketing for adidas.
Dame has been matched. I mean, here's the revenue we're looking for. Negotiate better deals and this foolishness over jumbotrons
and away games and jersey stunts never need enter the conversation. Negotiating with a new company now is an option, White did it before at ASU
. Here's an account of White's negotiations while at Arizona State.
A couple of passages allow some insight into White's philosophy:
The best way to promote the school to young athletes, White says, is to allow Nike or another company to market ASU sports apparel.
"That raises the level of awareness of your program in the marketplace in a way that you can't do as an institution."
White says many high school athletes prefer Nike apparel. "The kids today are driven by brand identification, and it's only going to become more and more prevalent in that regard, in our view," says White.
And negotiating history. When he came on at ASU
he immediately started behind the scenes strategery
with Nike, which backfired:
Soon after White took the helm at ASU, he and Miller began discussing an all-school sponsorship from Nike. The talks evolved into a detailed plan that told ASU how it should prepare its formal request for proposals (RFPs). According to state contracting law, RFPs must be provided to all potential vendors.
The RFP was drafted to effectively exclude the dozen or so athletic supply companies that currently provide equipment and apparel to various ASU athletic teams, and none of those vendors responded to the proposal.
Only three companies--Nike, Reebok and Adidas--were capable of meeting the RFP's broad requirements to provide sports apparel ranging from football jerseys to women's volleyball shoes.
Of these three companies, Nike clearly had the advantage of having the RFP written to meet its requirements.
ASU records indicate that White carefully followed Miller's instructions, modeling ASU's RFP after a deal Nike had struck with the University of Virginia.
White laid out the ASU-Nike game plan in a March 17, 1997, letter to Kit Morris, Nike's NCAA relations director.
"Quite frankly, as you know, Steve [Miller] forwarded ASU the University of Virginia proposal which we were instructed to emulate," White wrote.
(In a taped interview with New Times, White denied ever reading the Virginia proposal and said, "I don't even know where it came from.")
White wrote that Miller "shared with me a Nike [office] computer printout" that showed Nike was paying from $700,000 to $1.4 million annually for all-school sponsorships.
White also wrote that "ASU was coached to pursue a financial package at approximately the mean ($1M) . . ."
Records show ASU issued its RFP on January 24, 1997.
The results of the RFP were not what White and ASU expected.
Champion Products, which supplies apparel to the football team, complained bitterly about the RFP--Champion believed it infringed on the company's existing contract with ASU.
"I would like to further express Champion's disappointment that as a long-term supporter and partner of Arizona State University that we were not given the courtesy of any verbal or written notice prior to receiving this proposal," Jeff Johnson of Champion wrote.
Only one manufacturer, Riddell All American, responded by ASU's February 13, 1997, deadline--and its response failed to meet ASU's goal of providing apparel for all its athletic teams and was rejected.
More significant, ASU administrators were shocked that Nike failed to respond to the RFP, which ASU had so carefully tailored to meet Nike's requirements. White blamed Nike's inaction on the company's rapid growth, which he said made it difficult for anyone to make decisions.
(I'm cutting some out here, please read the full story above.)
Nevertheless, Jensen acknowledges that ASU is venturing into uncharted territory by continuing to negotiate with Nike after the company had failed to respond to the RFP.
"The [procurement] code is silent in terms of where we go from here," Jensen says.
Where ASU went was to Nike, on bended knee.
In his March 17 letter to Nike's Kit Morris, White made a generous offer.
"In order to further justify (from the Nike perspective) the enhanced relationship, ASU will consider several inordinately large (mammoth) and well-placed venue signage opportunities, i.e., the roof of the University Activity Center and on the respective straight-aways on our new track . . ."
White also reiterated previous pledges that ASU would be a strong "political" friend of Nike's.
White's groveling strengthened Nike's hand.
Nike knew it had no competition, that neither Reebok nor Adidas had responded to ASU's RFP.
Instead of the $1 million-a-year deal ASU expected when it prepared the RFP under Nike's instructions, Nike offered a $565,000-a-year annual package for five years.
ASU countered, seeking $700,000 a year in products for all teams and cash for three men's coaches.
The negotiations stalled in March after Miller, who was still in the loop from his new post in Japan, became upset over White's aggressive approach with Nike.
White wrote Miller a three-page letter of apology on March 27, 1997, and offered to cease seeking an all-school agreement.
White also sent Nike chairman Phil Knight a kachina figurine to smooth ruffled corporate feathers. The apology and gift apparently worked.
By June, a tentative nine-year deal beginning in 1999 was hammered out; it called for ASU to receive $608,000 in apparel and cash a year during the first three years; $685,000 in years four through six; and $718,000 during the final three years. The contract also called for bonus payments of up to $50,000 for winning the national football or basketball championship.
In exchange, ASU athletes would wear Nike products and participate in certain promotional events. (The blueprint contained no mention of giant Swooshes on the Activity Center or track; ASU officials say those inducements no longer are being offered.)
ASU president Lattie Coor gave ASU formal approval to sign a contract with Nike on August 8, and ASU sent Nike a redlined copy of the proposed contract.
But negotiations stalled again.
Nike agreed in November to increase cash payments to ASU football coach Bruce Snyder from $7,500 a year to $30,000 annually. But there has been no formal action taken on the contract by ASU or Nike. Snyder said he preferred not to comment on ongoing negotiations.
Nike forwarded ASU another draft contract in late December that showed ASU receiving $140,000 in cash in addition to the $30,000 payment to Snyder. White says he expects $125,000 will go to the ASU basketball coach and $15,000 to the baseball coach.
The $125,000 earmarked for basketball is the same sum former basketball coach Bill Frieder got from Nike, and is much less than the $500,000 a year Utah's Majerus reportedly gets from Reebok.
The amount of cash Nike would provide down the road, however, steadily increases, according to the draft contract. The sum available for the basketball and baseball coaches would rise to $190,000 from 2000 through 2003 and to $250,000 from 2003 through 2008. The ASU athletic department would retain the right to allocate the money to coaches as it chooses, making it possible that a new basketball coach could receive all the money.
While White insists that the Nike negotiations are separate from ASU's search for a permanent head basketball coach, he acknowledges that Nike is a basketball-driven company.
White says that even with the successful team it fielded this year under Newman's direction, ASU's basketball program is in no position to squeeze more money out of Nike.
"We are not in a position to barter up," White says.
But that doesn't mean a topflight coach like Majerus, whose teams are consistently in the top 10, wouldn't increase ASU's leverage.
Whether ASU will ever sign an all-school contract with Nike remains to be seen.
So, at this point ASU
has rigged the system to target Nike and in the process ostracized
the other vendors and Nike had yet to offer a deal near where expected. ASU is the girl at the dance left leaning against the wall and hiking up her skirt to coax the jock who flirted with her once into coming over.
White remains optimistic that ASU will sign such a deal with Nike soon.
"My job is to keep them interested, to keep on selling, to keep them believing we are a future stock," White says. "I think they have really come to appreciate the growth that is going on in this Valley," where Nike's Knight is apart owner of the Arizona Diamondbacks.
"We have become one of the more serious sports hubs in America," White says.
And serious sports hubs command attention.
Even from Nike.
And you thought I was sarcastic.
Let's take a moment to debrief this because the BCS negotiations - shoegate - jumbotron - corporate tent situations now make sense. White targeted Nike because he believed their marketing machine would enhance school reputation and because he had a personal relationship there.
Note the two drivers of the deal and how that fits into the "define who you are" argument. He was so focused on this target (engaging in questionable tactics in the process,) that he gave away all possible negotiating leverage with other suitors without locking in a commitment from Nike. And when Nike hemmed and hawed (okay, they didn't do anything,) Notre Dame... I mean ASU was forced to grovel for a deal. You've all seen the article on The Selling of ASU Football
by now, right?
Okay, now let's fast forward knowing these lessons learned.
ND has left tens of millions on the BCS
table, is still spending more on Willingham than on Weis because of an absurd buyout deal, paid out Davie and O'Leary and now is made to look rather foolish by this new Adidas deal with Michigan.And I offer a simple equation to give some perspective on what we're talking about:
BCS ($10 Million + per year lost starting last year) + Willingham/Davie/O'Leary Contracts ($10 Million or somewhere in there) + Shoe Deal (no signing bonus $6 Million, $1.5 Million per year) = $25 Million + left on the table already, plus $10 Million + per year for every BCS game made and $1.5 Million per year of the shoe contract.
That's a lot of dough.
Yet we're told Notre Dame HAS to consider jumbotrons, scheduling, etc. to stay competitive.
You do the math.
What needs to happen now: Adidas should upgrade ND to most favored nation status ASAP (lie and tell us Adidas had already started renegotiation talks when the Michigan deal was made) and then ND needs to drive hard bargain at the BCS
The take home: If you take care of business on the big deals, Notre
Dame won't be forced to turn tricks for relative small-time cash, tart up the brand and, in the process, devalue our ability to make big deals in the future which would preclude us from having to pimp out jerseys for cash,
"explore" jumbotrons and rejigger scheduling
for small comparative dollars.
The really interesting thing about the Michigan/Adidas deal is that Martin acted to protect Michigan's image by negotiating a sideline apparel clause.
Protecting their image at the possible expense of marketing dollars lost, but still getting more marketing dollars in the end. Funny how that works.
That's the power of branding and defining who you are.
Not to point out the obvious, but this is what we should be doing.
Trust me, I wanted to talk football as much as you did.
~ The Rock