UCLA agrees to settlement of more than $67 million in dispute with Under Armour
A six-year saga that started with smiles and handshakes ended with a sterile settlement document, Under Armour agreeing to pay UCLA $67.491 million to resolve the school’s lawsuit against the sports apparel giant, according to a document reviewed by The Los Angeles Times.
The settlement that was reached in late May ended a fractious dispute that started more than two years ago when Under Armour attempted to unilaterally terminate its record 15-year, $280-million contract with UCLA, prompting the university to sue the company for breaching its agreement. UCLA initially sought more than $200 million in damages as part of the lawsuit that the school on Thursday requested to be dismissed from Los Angeles Superior Court.
The squabbling escalated last fall when Under Armour filed a countersuit, alleging that UCLA was being vindictive when it covered the company logo with social justice patches on the jerseys of football, baseball, men’s basketball and women’s basketball players. That allegation has also been dropped as part of the settlement.
The settlement, which includes a mutual non-disparagement agreement, has been approved by the Board of Regents of the University of California, according to one person familiar with the developments.
UCLA can use its windfall to help offset the $102.8-million debt facing its athletic department that was caused in part by the loss of the Under Armour deal. In December 2020, the school agreed with Nike and Jordan Brand on a six-year, $46.45-million deal to outfit its teams with their respective brands.
“UCLA is one of the most recognized and respected collegiate names around the globe,” Mary Osako, UCLA vice chancellor for strategic communications, said in a statement released after the settlement. “We are gratified to have resolved this matter in a way that benefits our student-athletes and the entire Bruin community.”
A collective run by Bruin Fan Alliance will allow UCLA’s athletes to design a name, image and likeness program in hopes of raising $1 million a year.
At the time it terminated its deal with UCLA in June 2020, Under Armour contended it was allowed to do so because the school had failed to fulfill its obligations on several fronts — by failing to provide marketing benefits during the stoppage of sports caused by the COVID-19 pandemic; by failing to field its baseball team for more than half its games during the 2020 season; and by shaming the company and itself through the resignation of men’s soccer coach Jorge Salcedo after his involvement in the college sports admissions scandal.
Under Armour later tried — and failed — to have UCLA’s lawsuit dismissed before the sides agreed to the settlement. In previous court documents, Under Armour said it provided UCLA with more than $65 million in cash and products in the three years before it informed the school that it was dissolving the agreement.
USC and UCLA are leaving the Pac-12 for the Big Ten Conference in 2024, the two schools announced Thursday.
In May 2021, Under Armour agreed to a $9-million settlement with the Securities and Exchange Commission regarding allegations it had misled investors about its revenue growth at the time it was negotiating and finalizing its agreement to become UCLA’s apparel sponsor. The company was accused of using an accounting tactic known as “pull forward” in which it used earnings from future quarters to meet sales projections and claim an elevated revenue growth rate.
UCLA players and coaches have hailed the Nike and Jordan Brand replacement deal, citing a superior product and a “cool” factor that its predecessor could not match.
Under Armour remains a major player in college sports apparel. The company outfitted 16 teams in the most recent NCAA men’s basketball tournament, according to Apex Marketing Group, trailing only Nike and Jordan Brand’s combined 39 teams.
“Under Armour remains committed to all student athletes and wishes UCLA and the entire Bruin community well,” the company said in a statement.
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