When Ohio State University signed a massive $252 million deal with Nike for apparel and sponsorship there was a lot of media buzz about the arrangement. The contract is very detailed about what Nike gets in exchange for the payments to the University, and provides Nike with several opportunities to reduce the payments owed or to terminate the agreement altogether if the University fails to provide the publicity Nike demands. Essentially, the only way the University can terminate the deal is if Nike goes bankrupt or becomes insolvent. There is no provision that allows the University to end the deal if Nike’s reputation tarnishes the University’s. The one-sided agreement does provide for Nike to reduce its financial obligations if OSU faces post-season bans or other NCAA violations.
Nike has embroiled itself, and Ohio State University, in controversy and spurred calls for boycotts after embracing the unapologetically anti-National Anthem/American flag and chief kneeler Colin Kaepernick in a new ad campaign for the company. Protests and calls for boycotts have dominated social media in the wake of Nike’s announcement of their new deal with Kaepernick.
Fox Sports Radio host Clay Travis has dubbed the Nike decision the “dumbest move” in the brand’s history and pointed out that the decision had cost Nike about a $3 billion loss in market cap based on stock trading Tuesday morning after the announcement. Perhaps insolvency or bankruptcy by Nike is not completely farfetched as a way for OSU to exit their deal.
What other recourse does the University have? If the Nike decision on Kaepernick diminishes the payments to OSU under the agreement, does the school have recourse based on breach of contract due to Nike reducing the revenue stream to the Buckeyes because of their intentional action that produced a foreseeable result, i.e. lost sales and stock value?
What if the Columbus police officers and other law enforcement officials who are absolutely critical for a smooth game day experience suddenly suffer a massive case of “blue flu” rather than offer assistance to a Nike-logo team that promotes a guy who mocked police officers with “pig socks” about the same time he began mocking the American flag and National Anthem?
Ohio Star political editor Steve Gill says that Ohio legislators might also have a say about the issue. “If some student athletes want to wear other brands of gear or put athletic tape over the swoosh on their uniform will the school punish them? Wouldn’t that be the same kind of protest that they are deifying Kaepernick for doing when he disrespects our flag and anthem?” Gill asked.
“The contract with Nike reduces the amounts paid to OSU if athletes or coaches cover the logo on their shoes by ‘spatting’ them or taping over the swoosh. While it would be hypocritical for Nike to enforce that provision after putting Kaepernick on a highly-paid pedestal for expressing HIS right to ‘free speech’ that hypocrisy wouldn’t be surprising from a company that has chosen to showcase his complete disrespect for our country and our flag.”
“If Nike decides to feature somebody like Harvey Weinstein in their next ad does the University and its fans simple have to “take it,” sort of like the women he abused, Gill wondered.
There are plenty of other clothing options that fans can use to show their “scarlet and grey” devotion to the Buckeyes this Fall that aren’t Nike brands, Gill notes, “and most are a lot less expensive.”