The Texas Tech athletic department has extended its apparel sponsorship deal with Under Armour despite the fact that UA is experiencing some serious financial woes.
It will be at least four more years for the partnership between the Texas Tech athletic department and Under Armour. We learned on Thursday that the two entities have agreed on a contract extension through 2024 which will pay the school $12.9 million in total.
Tech has been an Under Armour school in all sports since 2009 when the Red Raiders signed their first-ever athletic department-wide contract with an apparel provider. This is the second time since then that the two sides have extended the agreement after a six-year extension in 2015.
However, the outlook for UA as a company is not as bright as it was the last time this partnership was renegotiated. In fact, the Maryland-based company has struggled in recent years to regain its once soaring momentum.
In fact, in May, the outfitter that once revolutionized sports apparel reported a 23% revenue drop in the first quarter of 2020 as compared to the same period last year. Overall, the company’s stock shares have fallen by around 75% over the last five years, which was roughly when the last deal with Tech was signed.
But the concerning current state of the program can’t be attributed to just the coronavirus pandemic. Rather, a number of factors have combined to bring down what was once the hottest athletic apparel company in the world.
First of all, their products are no longer revolutionary. Once the only company that offered the moisture-wicking material, they had cornered the market of non-cotton athletic clothing. But now, virtually every athletic apparel company on the planet has a line of clothing that does something similar.
More from Wreck'Em Red
- Texas Tech football: Red Raider fans need to know about these Mountaineers
- Texas Tech football: Red Raiders land first commit for class of 2025
- Texas Tech football: Why have the Red Raiders struggled on the road under McGuire?
- Texas Tech football: Why the Red Raiders can compete for a Big 12 title
- Texas Tech football: Plenty of questions remain as conference play arrives
Also, their attempts at expanding in order to compete with Nike have led to poor financial decisions. Celebrity endorsements such as Steph Curry, Lindsey Vonn, and Dwayne “The Rock” Johnson, have cost billions of dollars and the products those figures have been hocking have not led to a return on that investment.
Then, in 2018-19, there were complaints from former employees about the work environment in the company.
"“There were the workouts, the poker games, the drinking. The executives had the expectations for you to stay late and maybe go out with them,” a former female employee told Forbes."
Thus, any deal that Tech was going to sign with UA was destined to be less than some fans hoped. But counting on an apparel deal to pay a huge chunk of the bills is not what NCAA programs do.
Though the nation’s most lucrative deal between a school and an apparel provider, UCLA’s $12.7 million per year deal with UA, is equal to the value of Tech’s entire deal, it is only a drop in the bucket for any major university’s annual financial needs. Thus, Tech was wise to just remain with the company that it has become synonymous with.
What’s more, there are some in the business world that think Under Armour could make a financial comeback.
"According to an article by Daniel Roberts, Editor-at-Large of Yahoo Finance, “Raymond James analysts Matthew McClintock and Mitch Ingles acknowledge the company has been rebuilding for quite a while, but expect the rebuilding to finally pay off: ‘The company has spent the last few years revitalizing its infrastructure and is on the cusp of a multi-year, profitable, and sustainable growth cycle,’ the note says, ‘that we believe will allow it to grow earnings by 40% annually through 2023.'”"
Recently, we looked at some of the best and worst uniform combos Tech has ever worn and the Under Armour looks that we’ve seen since 2006 dominated both lists. But in recent years, the concept uniforms like the Wounded Warrior and Lone Star Pride uniforms have gone by the wayside. When Under Armour designs a standard uniform, they give their schools the best overall look of any company and thus, it is nice to see Tech continuing its partnership with the brand that the athletic department has worn through the best seasons the football, basketball, and baseball programs have ever experienced.