In its attempt to rival Nike and Adidas, Under Armour went on a spending spree within the University of California system a few years back. The company signed Cal to a 10-year contract worth $86 million in cash and gear back in 2016, then broke the bank with a 15-year, $280 million deal with UCLA in 2017.
Years later, UA is feeling buyer's remorse. And the UC schools aren't having any of it.
Reporting by the San Jose Mercury-Newsrevealed $600 worth of sales could be the grounds UA uses to get out of its deal with Cal. As the paper reported, UA found that Fanatics sold $591.68 worth of Cal gear bearing Nike's logo from the Bears' time with the Swoosh, and so that, plus [gestures wildly in the direction of COVID-19] is the company's grounds for getting out from under its remaining $58 million obligation to Cal.
"Under Armour is overreaching here and taking a strong-arm approach that seems ill-advised even if their goal is to try to negotiate an end to an agreement they now regret," sports law expert Joshua Gordon told the Mercury-News.
Cal's deputy campus counsel Julie Conner responded to UA's motion to cancel with this bit of hot fire on July 14:
Under Armour doesn't have a $600 smoking receipt to wave at UCLA, but the company is looking to get out of the deal all the same, arguing the Bruins have not performed up to their best-in-the-nation contract. "Under Armour has recently made the decision to discontinue our partnership with UCLA, as we have been paying for marketing benefits that we have not received for an extended time period," the company said in late June. "This agreement allows us to terminate in such an event and we are exercising that right."
On Wednesday, UCLA struck back with a countersuit against UA, as Yahoo's Pete Thamel first reported. You can tell the lawyers were feeling themselves when they wrote this.
Where does this go from here? That's impossible to say at this point.
What is certain is that Cal and UCLA desperately, desperately need the cash UA promised them. Both schools counted on that money before the coronavirus knocked out nine and a half months of their 2020 athletic years. (In a related point: UA's stock price traded for $9.88 today, down from a peak of $51.86 in 2015.)
What does seem certain is that, God willing, both schools will take the field again in 2021; neither school is all that jazzed about wearing the UA logo on their uniforms; UA doesn't want to be in business with either of them; the two sides remain under contract until they're not; and neither school could get anywhere close to what UA pays them on the open market.
As always, stay tuned to The Scoop for the latest.