UCLA filed a lawsuit against Under Armour this week after the company attempted to dissolve the massive sponsorship deal with the Bruins earlier this year.
Under Armour, UCLA alleged in the lawsuit, not only failed to perform its obligations of the deal but also only wanted to get out of the contract because it is “financially struggling and has been for quite some time.”
The school, citing a breach of contract, is suing Under Armour for more than $200 million.
Under Armour wants out of 15-year, $280 million deal
Under Armour informed the school in June that it wanted to end its 15-year, $280 million deal — which set an NCAA record for the largest in history when it was signed in 2016 — in June. Under Armor believes that UCLA did not provide the marketing benefits that were initially agreed upon in the deal.
The company reportedly paid the school $15 million up front, and agreed to pay about $11 million each year in rights and marketing fees. It also provides about $7.4 million in clothing, shoes and equipment per year, and about $2 million each year for facility upgrades.
“Under Armour has recently made the difficult decision to discontinue our partnership with UCLA, as we have been paying for marketing benefits that we have not received for an extended time period,” it said in a statement in June. “The agreement allows us to terminate in such an event and we are exercising that right.”
Terminating ‘due to the COVID-19 pandemic’
Among other things, UCLA alleged that Under Armour wants out of the deal due to the COVID-19 pandemic — which has forced the Pac-12 conference to cancel all sports through the end of the calendar year.
That, along with its “weakening financial position,” the school said, “made complying with the agreement unattractive for Under Armour.”
“Nothing about COVID-19 made it ‘impossible or impracticable’ for Under Armour to meet its obligations under the agreement,” UCLA said in the lawsuit. “Nor did COVID-19 make it impossible or impracticable for UCLA to meet its material obligations under the agreement.”
UCLA is now reportedly looking for a new sponsorship deal, which would ideally be in place before the conference allows sports to begin again on Jan. 1.
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