Two years after Under Armour informed UCLA that its 15-year, $280 million apparel deal would end, the sporting goods company settled a lawsuit with the school for $67.491 million, according to the Los Angeles Times.
At the time of UA’s decision to no longer work with the California university, the company noted various examples as to why it felt the need to end the partnership with UCLA: “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,” per the LA Times.
Initially when Under Armour announced the termination, UCLA sued for $200 million in damages for ending the contract. UA fired back last fall and filed a countersuit, stating that the school often covered the UA logo on its sports jerseys. This claim was dropped with the settlement.
The settlement reportedly includes a mutual non-disparagement agreement. It was approved by the Board of Regent of the University of California, the report states.
Under Armour previously tried to get UCLA’s lawsuit dismissed, but none of the prior times worked out. UA argued the lawsuit should’ve been dropped because the company gave UCLA more than $65 million in cash and products in the three years before the June 2020 termination.
In May 2021, Under Armour dealt with a settlement agreement of $9 million with the Securities and Exchange Commission based on allegations that the company “misled investors about its revenue growth” while it was in discussions with UCLA to become the main apparel sponsor. In this situation, UA was noted to use a “pull forward” tactic, which includes the company listing earnings from the future quarters to satisfy any sales projections and growth rates the school was looking for.
UCLA will most likely use the settlement money toward its athletic department debt of $102.8 million. The school will leave the Pac-12 and join the Big Ten in 2024 as another way to help get itself out of debt.
Shortly after Under Armour dropped its deal with the school in June 2020, Nike and Jordan Brand signed a six-year, $46.45 million contract with UCLA to take over for its sports apparel.
