The University of California, Los Angeles, is suing Under Armour after the sportswear giant ended its massive sponsorship deal with the Bruins.
In a lawsuit filed Wednesday in the United States District Court in Los Angeles, UCLA alleged that the Baltimore-based company failed to pay up as scheduled or deliver product as promised in their $280 million contract. It further claimed that the coronavirus crisis was not the reason behind UA’s decision to exit the partnership; rather, UCLA alleges it was the brand’s financial standing.
“By 2020, Under Armour wanted to get out of that deal — not because of anything UCLA did, but because the deal now seemed too expensive for the financially troubled sportswear company,” the suit read. “Under Armour decided that it would use the COVID-19 pandemic as a pretext to ‘terminate’ the sponsorship agreement, but neither the governing agreement nor the law allows Under Armour to do so. This action seeks to hold Under Armour to the promises that it made.”
According to the filing, Under Armour approached UCLA in April to request that its payment for the month be postponed to July as it faced a cash-flow shortage. However, in late June, the brand informed the school of its desire to end the record-breaking contract by invoking the force majeure clause as the COVID-19 health crisis swept the United States and subsequently put a pause to college sports.
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Under Armour also told the university that its baseball team had completed less than half of its games in the prior season, which it said did not comply with terms of the contract, and added that UCLA didn’t “take reasonably appropriate action” following the arrest and indictment of men’s soccer coach Jorge Salcedo, who was involved in the widely reported college admissions scandal.
In Wednesday’s filing, UCLA rejected UA’s assertions and added that its athletes and coaches still wore Under Armour gear during team meetings, training exercises and other activities. It accused Under Armour of misleading the school about its financial standing before they penned the agreement four years ago.
“It is unfortunate that Under Armour is opportunistically using the global pandemic to try to walk away from a binding agreement it made in 2016 but no longer likes,” Mary Osako, vice chancellor of strategic communications at UCLA, said in an emailed statement. “UCLA has met the terms of the agreement, which does not require that games in any sport be played on a particular schedule. We filed this lawsuit in order to support our student-athletes and the broader UCLA community, including the athletic department that has brought 118 national championships to Westwood.”
In a statement to FN, Under Armour wrote, “While we are disappointed that UCLA elected to file suit, we are confident in our position and will defend it vigorously. We sought and remain open to working out a reasonable and appropriate transition for the university and most importantly for the student-athletes. In fact, at UCLA’s request after the termination of the agreement, Under Armour continued to deliver athletic products for the 2020-2021 school year because we support athletes, even as it remains uncertain when sports will resume.”
The lawsuit came two months after Under Armour alerted the university that it would exit the 15-year contract that the pair signed in 2016. (At the time, it represented the biggest apparel sponsorship agreement in the history of college sports.) UCLA is claiming breach of contract, breach of implied covenant of good faith and fair dealing, as well as promissory estoppel. It is seeking more than $200 million in damages — the amount it said Under Armour still owes to the school as part of their contract.
This story has been updated to include comments from UCLA and Under Armour.