Breaking down GVSU athletics' contract with apparel giant Adidas
The Grand Valley State athletic department made the big announcement June 1, 2016, that it would be renewing its contract with Adidas, which has been a partner with GVSU since 2004, through March 31, 2024.
So what does that mean, exactly?
Details of the contract
Adidas is designated as the official outfitter of Grand Valley State athletics, and the two have an exclusive relationship that does not allow for other brands to be associated with the GVSU Lakers.
Though the Lakers have been partnered with Adidas since 2004, they have only been a direct school since 2012. There are three major distinctions between college athletic apparel deals: licensed schools, direct schools and team schools.
Licensed schools include major universities like Michigan, Oregon and Texas. They receive large amounts of money from Adidas in exchange for Adidas’ brand being heavily associated with a major university. For example, UCLA signed a $280 million contract with the company that will begin in 2018 and end in 2032 for an average annual value of $18.67 million.
Direct schools have to pay a certain amount annually but receive a wealth of benefits and perks. This is what GVSU is. The athletic department spends a certain amount every year and receives the following promotional merchandise from Adidas: 50 percent off of the price for apparel, 45 percent off footwear and incentive-based performance bonuses for every GVSU athletic team.
“We’re our own retailer in a sense,” said Doug Lipinski, GVSU deputy director of athletics and head negotiator with Adidas. “You’re a (GVSU team) and you come to us today and you need something. I can order it within five minutes. Having that control when you deal with 600 student athletes, 20 varsity programs and 13 head coaches, it helps the process.”
The athletic department spends a certain amount every year and receives the following promotional merchandise from Adidas: 50 percent off of the price for apparel, 45 percent off footwear and incentive-based performance bonuses for every GVSU athletic team.
For each team, there are incentives for making it to the national championship game in each respective sport: football would receive $10,000, men’s and women’s basketball would get $2,000, and every other sport would receive $1,000.
The third tier is team schools. This is what GVSU was up until 2012. Team schools have to get their apparel through a retailer as opposed to getting the apparel directly from Adidas.
One of the main reasons for the renewal was for consistency across all of GVSU’s athletic teams. Fans who went to football games this past fall noticed GVSU’s slick new uniforms. Lipinski hopes those will be the uniforms for the next three to four years—Adidas uniforms have a shelf life of three years before they are replaced. The teams will get refills of their current uniforms for the next three years before they’re replaced.
For all new apparel, GVSU books their orders in November and gets the new material the following summer. So, for the 2017-18 athletic seasons, the apparel has already been ordered and will arrive sometime in the coming months.
GVSU also has creative input with the uniform designs. The coaches for each team work with the athletic department in creating unique, eye-catching uniform combinations.
“We’re always looking from a marketing standpoint on trying to do different things to use, let’s say, uniforms to put us in the forefront to help create a promotion,” Lipinski said.
Speaking of marketing, the Lakers’ official Pantone color is 286, which is the same color at the University of Kentucky Wildcats.
“The general fan, everything that we do from ink, embroidery, thread, tackle twill, it will be very similar to our blue,” Lipinski said. “That’s why we went with 286; it’s not a unique color. We have a very nice royal blue where it doesn’t matter if you’re Under Armour, Nike, Adidas, Gildan, or whoever.
It’s going to be very similar, and the fans won’t be able to tell the difference.”
The athletic department’s primary vision for outfitting the GVSU sports teams was to make everything as uniform as possible across all sports. From jersey fonts to colors, GVSU wanted to be equal across all sports.
Partnering with Adidas has allowed Laker athletics to do that.
“Initially, we wanted all of our teams to look uniform, look the same,” said former GVSU Athletic Director Tim Selgo, who oversaw the contract agreement. “We wanted every single one of them to have the same logo, same shoes. It just says something about your department. Frankly, it adds a little more class to your teams if they’re outfitted with the same apparel company.”
Because GVSU is a Division II school, it does not have full-time equipment managers. This means each individual team is responsible for handling its own jerseys, gear, footwear and anything else. But, because GVSU has exclusivity with Adidas, this makes it easier to keep track of each individual team’s needs.
Not only that, but it provides for greater consistency across the entire department.
“When we lump it all together, we’re all the same,” Lipinski said. “The student-athlete that plays softball has the ability to have quality product that they can compete in, train in just like the football student-athlete. That’s why this is really important to us.”
Lipinski was also in charge of securing GVSU’s trademarks. The athletic department works with Learfield Licensing, which polices the university’s trademarks. GVSU’s contract with Adidas, in conjunction with its greater involvement with ESPN3, makes protecting GVSU’s brand all the more important.
Should a GVSU player wear a non-Adidas item during a sporting event, there could be consequences. Lipinski said the athletic department does everything in its power to ensure this doesn’t happen, and even if it did, it could be handled internally first.
The contract stipulates that the first offense of an athlete getting caught with another company’s product is a 25-percent reduction of the contract. The second offense is a 50-percent reduction, while the third offense is a 100-percent reduction. Lipinski said there were safeguards in place and that it was very unlikely this would ever happen.
Going forward, Lipinski said he would like for the deal with Adidas to become a university-wide deal. The contract was one of the last big accomplishments of the Selgo era at GVSU, but he gave all of the credit to Lipinski, who ran point on the contract negotiations.
The two are excited for the partnership’s potential.
“Doug did the vast majority of the work on this and is the one who deserves credit, because it is an unbelievable deal for a Division II school,” Selgo said. “Each of the negotiations of every contract we’ve signed with them, I think it’s been great that we’ve found a win-win for both Adidas and Grand Valley. I think Adidas really appreciates and enjoys their relationship with the Lakers.
We certainly appreciate our relationship with them.”
While the newly extended contract gives Adidas a major platform to showcase its apparel, Grand Valley State athletics benefits from the deal in more ways than one.
With the newly signed extension, the Adidas logo is plastered on every uniform, headband and pair of shoes that Grand Valley State teams sport. This is a great way for Adidas to market its brand while GVSU teams have a unified, sleek look on the field or court.
In the case of the football team, GVSU has four different colored uniforms: blue, white, black and gray. This gives the Lakers a seemingly endless number of uniform combinations by mixing and matching different colored jerseys, pants and helmets.
Just a uniform right? No, it’s much more than that.
Before every 2016 game, the football Twitter page tweeted out pictures of the different uniform spreads and received a lot of traction.
“We do put a lot of stuff on there about uniforms,” GVSU football coach Matt Mitchell said. “We had the idea of doing that, we stole it from someone else, the game-day uniform, and I was shocked the number of retweets and likes that started taking off once we started doing that.”
Much of the traction on the Twitter posts came from GVSU’s high-school recruits. Having attractive uniform combinations gives the GVSU program an edge over some of its competitors in the recruiting process.
Uniforms have become popular in all of college athletics, especially football. It all started with the Oregon football team unveiling throwback uniforms in the 1990s that caught the eye of fans and players.
Since then, Nike founder and Oregon alumnus Phil Knight has continued to produce unique uniform combinations for Oregon. The Ducks unveil a new jersey combination for each game of the season.
With uniform combinations on the rise, Adidas and GVSU have been playing catch-up the past few years to tap into the popularity of uniforms. Now, with more uniform combinations, the GVSU football program has added another bargaining chip in the recruiting process.
“Let’s not lose focus that this is part of recruiting,” Lipinski said. “We recruit student-athletes daily. Basically, students, we’re an extension of admissions, really. We have to be relevant. We have to stay with those trends.”
And it’s not just football. The other athletic programs benefit from the contract, including the basketball team. Having Adidas shoes and a number of different uniforms attracts more players to the program.
Aside from recruiting, it saves the athletic programs and the student-athletes money. Before the contract, assistant coaches in all programs were forced to go out to have uniforms and other apparel embroidered with the GVSU logo. Now, with GVSU as a direct customer of Adidas, that process is all done before the apparel is shipped to GVSU.
In terms of saving student-athletes money, players are not required to purchase shoes or apparel outside of what is provided for them by Adidas. With not one player on a full-football scholarship, it allows players to utilize funds elsewhere to better their education than to spend it on equipment.
There are several perks with the contract extension, and the relationship between GVSU and Adidas is only growing as time passes.
Issues in Adidas manufacturing
While there is no question that both GVSU and Adidas benefit from the contract, it has not always been a harmonious partnership. Looming over Adidas is the fact that the company is known for outsourcing its manufacturing and having a stigma of unfair treatment of its factory workers, an image that GVSU does not want damaging its public image.
Fortunately for both GVSU and Adidas, the company has shaped up in its treatment of its workers in recent years. That said, there have been issues in the past.
In 2010, an Indonesian textile factory, PT Kizone, failed to pay its resigning workers severance, did not give out death benefits to families of deceased employees and endured a stretch of not paying its workers at all, and then, eventually, the owner of the factory disappeared completely.
Major companies who exported from Kizone were then given the responsibility of paying severance to the factory’s employees. Brands such as Nike, the Dallas Cowboys and Green Apparel complied, but Adidas did not.
Adidas eventually gave in and paid its dues, but it was not without backlash.
“The easy thing for Adidas was to pay the money," Lipinski said. "The harder thing was to stand up.
“Well, eventually, because of us (schools with Adidas contracts), they paid the money. To be honest, they probably should have done that from the beginning.”
GVSU, along with many more of the company’s clients, forced Adidas to sign onto an accord, essentially holding the company completely responsible. This came after the Lakers and other schools threatened to void the contract from Adidas.
The accord forces Adidas to allocate a certain amount of money toward ensuring the safety of factory workers in the event of emergency, like installing fire escapes and sprinkler systems. This is a major commitment for the company, as Adidas sources from more than 1,000 different factories, according to the Worker Rights Consortium (WRC).
Several prominent schools around the country, led by the likes of Cornell University, Georgetown University and Rutgers University, held protests against Adidas. GVSU’s chapter of United Students Against Sweatshops (USAS) joined in urging school officials to sever ties with the company. The demonstrations led to the formation of a task force with campus administration and USAS members to help monitor the progress and happenings of Adidas.
Following the protest, USAS appeared in front of GVSU’s student senate to spearhead the movement in finding a resolution between the school and Adidas. Though there was no agreement made to cut ties with the German company, GVSU has since kept a watchful eye on its exclusive textile producer.
Since then, Adidas has improved the conditions of its factory workers. Though they still outsource manufacturing to lower costs, USAS is pleased with the strides the company has made.
Today, 90 percent of Adidas' factories are based in Asia, according to company CEO Kasper Rorsted. The organization has no intention of returning to Europe, despite being headquartered there. It has even moved toward “speed factories” in Germany and Atlanta, which are fully automated and staffed by robots. Additionally, Adidas struck a deal with a Silicon Valley company to quickly 3-D print soles for shoes, according to a piece from the Financial Times. However, Rorsted still thinks that full automation is at least half a decade away.
“They’re not the worst," said Lindsey Disler, president of USAS at GVSU. "That being said, they could easily do something and f*** up tomorrow. They could do something tomorrow, and we might have to start cutting contracts with them.
"Grand Valley is pretty good about monitoring the contracts, like Nike stopped allowing the WRC in to survey their factories and Grand Valley put out a statement saying that they’ll never do business with Nike again until they let the WRC back into the factory.”
In the morality scale of large textile companies, Adidas would fall somewhere in the middle with Nike in the basement and companies like Alta Gracia at the pinnacle, according to Disler.
Though imperfect, USAS and GVSU are satisfied with Adidas and their progress.
“I think we felt confident in our relationship with them,” Tim Selgo said. “We had confidence they would address the situation appropriately. In the end, we certainly felt they did, as well as numerous other colleges and universities that were working with them.”
While GVSU is always looking to improve its image, converting to a company like Alta Gracia is not a practical switch. With such a massive brand and complicated needs, it takes a company of equal or greater prestige, like Adidas, to cater to the Lakers’ demands.
As Adidas continues to work to improve its public image, GVSU will happily continue the partnership and benefit from all the perks that Adidas can offer.
Student athletes and coaches respond
The current eight-year direct contract that GVSU athletics has with Adidas means fans and players will be seeing the “three stripes” more and more on the playing fields and courts.
From the coaching and administration perspective, landing an extensive contract with a big-name brand like Adidas can give the members in a particular program notoriety and a clear edge over the competition.
Along with coaches and administration, athletes are a direct beneficiary of the Adidas contract. The players are the ones sporting the Adidas logo on the field and in front of the camera.
Players benefit from the contract not just by receiving gear and apparel but more so by obtaining a sense of unity among the school and other student athletes. Rahju Blackmon of the GVSU football team attests to this unity.
Adidas supplies athletes with everything from a few shirts and shorts to the extravagant uniforms they wear on game days.
Adidas has recently received backlash for the means they use to manufacture their products. While they do not violate any labor laws, they outsource all of their products to countries where labor laws are lenient, and they are not required to compensate their workers adequately.
Student athletes at GVSU enjoy the perks of a big contract, but do they pay any mind to the manufacturing process that goes into producing new gear and equipment?
“It does make me uneasy (being sponsored by Adidas), but thinking more about it, I know as a college athlete a part of a sponsored program, I’m in no position to really bring about change because of team appeal rules and I don’t want to be a team distraction,” said GVSU football student athlete Brandon Bean. “I would hope that other professional athletes that have a choice and a bigger voice would bring more attention to such a serious situation.”
“Honestly doesn’t cross my mind (on game days), kind of messed up to think about it,” said GVSU football student athlete Bart Williams. “I guess for whatever reason, I don’t associate Adidas with that as much as I do Nike.”
Adidas has come a long way over the past few years changing the way it operates and, as a result, strengthening its image enough to have a good relationship with universities all over the U.S.
Even with improvement, should another incident occur in which Adidas jeopardizes its brand and image, GVSU would not hesitate to find a new partner.
“Being realistic, would we (cut the contract)? Absolutely,” Lipinski said. “If there was a situation, yes, we would. We would cut any agreement with any company that didn’t represent us the way we wanted to be represented.”
GVSU's future with Adidas
In the first four-plus years of GVSU’s contract with Adidas, the athletic program has grown tremendously. GVSU has gained more exposure with 50 games aired on ESPN3 during the 2016-17 academic year. Every athletic program has received new uniforms in the four-year span, with new combinations arising every season. And with the money saved with GVSU as a direct school, allocations can be spent in other areas of growth.
Before the 2016 football season, GVSU upgraded Lubbers Stadium with the construction of the largest video board in all of Division II. With the Adidas contract, funds were made available for the video-board upgrade instead of spending money on equipment and uniforms.
This helps GVSU fight the stigma that is always plastered next to its athletic programs: The Division II will always be next to its name. With the Adidas contract and other upgrades to go along with the success of different varsity sports across the board, GVSU is a Division II school with Division I facilities and a Division I environment.
A maintained partnership with Adidas will allow GVSU athletics to continue to grow and separate itself from the rest of Division II, with the possibility of a move to Division I in the future.