Nike at Illinois: the price behind the Swoosh

Illinois’ Claire Wheatley (1) throws the ball down the field after making a save during the game against Arizona State at the Illinois track and soccer stadium on August 29, 2014. The Illini won 3-1.

Orange and blue is everywhere on the University’s campus. Illinois students own at least some type of clothing that shows the school’s colors, whether it be t-shirts, hoodies, sweatshirts, shorts or hats.

But neatly tucked away on a sleeve or on a tag there is also something on nearly all of these pieces of apparel: the Nike Inc. swoosh.

The swoosh isn’t quite as noticeable as the bright colors of the gear, but it’s everywhere. Not just on clothing: It can be seen on team posters, in stores and even on stadium scoreboards.

In October 2005, the University and Nike reached a contract agreement to make the corporation the official sponsor of all Illini apparel.

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As part of the contract, the University agreed that all apparel sold by the Division of Intercollegiate Athletics would be Nike apparel. In exchange, the University receives $325,000 in compensation that is divided into two equal semi-annual installments, one in January and one in July. The University also received a $500,000 commitment bonus that was paid within 30 days of the execution of the agreement.

The contract also entails program-specific performance-based incentives. If the football program made a Bowl Championship Series appearance — since replaced by the College Football Playoff system — the University would receive $25,000. If the men’s basketball team made a Final Four appearance, the University would receive $25,000, while if the women’s basketball team made a Final Four appearance, the University would receive $10,000.

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Outside of the compensation the University receives for using only Nike apparel and displaying the swoosh logo around athletic events, the Division of Intercollegiate Athletics also receives free apparel to give to Illini student-athletes.

In the first five years of the contract, 2006 to 2011, the department was allowed to order $1.1 million worth of “mutually determined sport-appropriate NIKE Product for use by (or in connection with) the Covered Programs, by coaches, staff and members of the Athletic Department through the ‘Nike By Mail’ program.”

University Chancellor Phyllis Wise has been on the Nike board of directors since 2009. Other members of the board include Tim Cook, CEO of Apple, and John Donahoe II, the CEO of eBay Inc.

The apparel value limit was increased to $1.2 million from 2011 to 2016 due to the terms of the original agreement.

The department also receives a special offer on football shoes based on a 2-for-1 program. In each contract year that the University has ordered at least 350 pairs of shoes, the University is entitled to order direct from Nike on a “2-for-1” basis, where for every two pairs of shoes ordered, one would be received for free. In the example provided in the contract, if for the 2006 season the University placed an initial order for 350 pairs and then the University ordered 150 more pairs, 100 would be paid at wholesale price while 50 would be received for free. Nike also provides 100 pairs of football shoes for each postseason bowl the team participates in. For the football gloves program, the University must order 500 pairs and is then entitled to the “1-for-1” basis. So if 500 pairs were ordered and another 100 were ordered, 50 would be paid at wholesale price and 50 would be free.

Nike also receives other benefits for its sponsorship. The corporation receives eight season tickets between the 30-yard lines and 12 tickets to the best available seats at a bowl game. Nike receives eight season tickets for the men’s basketball season, 12 for the Big Ten tournament and either the NCAA tournament or the NIT. Four season tickets are set aside for the women’s basketball program and 12 for a postseason tournament. There are also four additional season tickets made available to Nike to ticketed programs, like Illini volleyball.

During each contract year, the corporation also receives 50 tickets (42 in addition to the eight season tickets) to one agreed upon football game. Nike also receives 25 tickets — 17 in addition to the season tickets ­— to one mutually agreed upon men’s basketball game. Nike receives four “VIP” parking passes at all basketball and football games.

Illinois is one of eight schools in the Big Ten that is sponsored by Nike. That means that whether the colors of the gear are orange and blue, scarlet and grey or yellow and gold, the swoosh is present.

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