Nike, Adidas, and Under Armour pay social currency premium for college sports

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On September 3rd, 2015 the college football season opens with Michigan taking on Utah. 45k+ fans at Rice Eccles Stadium and million of viewers on Fox Sports will watch as Jim Harbaugh’s Wolverines take on a vaunting Utah defense. From that day forward, until the championship game on January 11, 2016 in Glendale Arizona, millions around the country will be glued to their televisions every Saturday.

College football is big business, the teams from the power 5 conferences (ACC, Big 12, Big 10, Pac 12, and SEC) bring in an estimated $2.8 billion a year. This number was also taken before several big apparel deals were finalized, including Nike agreeing to pay Michigan $11.2 million per year. Under Armour with Notre Dame ($9 million/year) and Adidas with UCLA ($7.6 million/year) also pay large sums of money.

In a report released this morning by Adobe Digital Index, I showed that Michigan leads my preseason top 25 most social followed college football team rankings. I used Adobe Social to rank the college teams based upon Twitter followers, Facebook page likes, total social following, social mentions June – August, and positive sentiment.

As a top followed team, it isn’t surprising that Michigan was able to garner so much money from Nike. If you compare the numbers on a social basis to the top paid professional players it shows a different story. For instance, Nike spent $11.2 million a year in sponsorship funds for the University of Michigan football team—that’s $6.50 for each of the team’s 1.7 million Twitter and Facebook followers. By contrast, Nike forks over $30 million a year in sponsorship and support for NBA star LeBron James—but socially speaking, that translates into just $0.67 for each of the Cleveland Cavalier baller’s 45 million Twitter and Facebook followers.

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If you look at Under Armour and Adidas you will see a similar data result. Under Armour spends $9 million a year in sponsorship for Notre Dame football, which boils down to paying $12.50 for each of the team’s 719,000 Twitter and Facebook followers. In comparison, it spends less than $4 million on the NBA’s Stephen Curry and just $0.60 for each of Golden State Warrior’s 6.6 million Twitter and Facebook followers.  

Adidas spends $7.6 million a year on the UCLA football team, and a whopping $41 for each of the teams 184,000 Twitter and Facebook followers. In comparison, it spends more than $14 million a year on Chicago Bulls star Derrick Rose, but just $1.16 for each of his 12 million Twitter and Facebook followers.

There are a lot of variables that aren’t accounted for in the social currency of team vs. player sponsorships, but it’s easy to think of reasons why Nike, Under Armour, and Adidas may pay a premium for college sports.

  1. Large Viewership: College football was named as the 3rd favorite sport, behind the NFL and MLB, according to a Harris Poll done in 2014. So viewership is definitely a reason to pay a lot for college football.
  2. Access to Millennials: the 18-34 year old market always has a spotlight on it as a sweet spot for marketing. If Nike, Under Armour, and Adidas can gain appetite for their brand with both young college millennials as well as graduated alum, then it would be worth their investment.
  3. Access to amateur athletes: according to ‘a way too early’ mock draft from CBS sports, several athletes from Nike, Under Armour, and Adidas schools will be drafted in the first round of the 2016 NFL draft. By sponsoring their teams, these apparel companies can have access to build a brand relationship with these athletes that could ultimately land them the next crop of professional advocates.

College sports is a great opportunity for all brands to latch onto an extremely engaged audience of passionate fans. I will be one of those millions watching the Harbaugh era kick off against an emerging Pac 12 contender. The look of the uniforms and play on the field may even influence whether I buy Nike (Michigan) or Under Armour (Utah) the next time I visit my local sporting goods store.

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