With each day that passes, the prospect of a college football season in 2020 becomes less likely.
At time of press, however, the seasons for the ACC and SEC appear to be moving forward and the Big 12 is reportedly still undecided on playing in the fall but is leaning toward hitting the field.
With action on the gridiron this year still uncertain and a cancelation a possibility, athletic giants involved with major college programs — specifically Nike, Adidas and Under Armour — are sure to sustain massive financial blows.
“The potential impact [of no college football season] could be felt on jersey sales, team apparel, licensed products, the loss of revenue that certain retailers and brands could see from a diminished interest because there are no games,” National Sporting Goods Association director of communications and team dealer division Marty Maciaszek told FN.
Although a financial hit is expected, industry insiders believe it’s too early to tell just how devastating it will be.
“There are other factors that come into play. Are students going to be back on the campus? Well, then they can buy sweatshirts at the bookstore, so that business is relatively whole. If the school is going virtual, the chances of selling anybody anything is pretty slim,” The NPD Group senior industry adviser Matt Powell explained to FN.
Jersey and sweatshirt sales, however, are short-term hits. What’s less clear is how the cancelation of a season could shift the dynamic between brands and college programs for the long-term.
The coronavirus crisis has forced companies to put their investments under a microscope to determine if they’re spending money in the right places. Under Armour, for instance, has battled both UCLA and the University of California in recent months to get out of its long-term agreements with the schools.
(Under Armour and UCLA announced a 15-year deal worth $280 million in May 2016. A month earlier, Cal and Under Armour agreed to a 10-year, $86 million deal.)
“Under Armour recently looked to end the marketing agreements they had with UCLA and California early because they didn’t feel like they were getting out of what they expected,” Maciaszek said.
Powell believes Under Armour’s wanting to back out of deals with UCLA and Cal may be a sign of things to come. Although brands may not want to part ways with schools, the market expert thinks they may look for a break during uncertain economic times.
“If you have a marketing asset that can’t be activated, doesn’t that diminish its value? And isn’t there at least a case to go back to the school and say, ‘I want some relief on my on my contract with you?'” Powell said. “The big reason brands sponsor schools is because they want, one, their logo to be in every picture of the athletes playing their sport, and two, they want every college kid on the campus to be wearing merchandise that has their logo on it. If kids aren’t back at school, if teams aren’t playing, the fans aren’t buying, there is no there is no residual marketing value of having your logo on television and that asset is really devalued.”
Powell continued, “With a major power five school, you’re paying big money for those contracts. So it wouldn’t surprise me to see brands testing the water to see if they can get some relief.”
But don’t expect the schools to take talk of relief lightly.
“I think the colleges, I would imagine, would probably push back a little bit and say, ‘Look at all the revenue that we’ve lost from no attendance,'” Maciaszek said. “It’ll be interesting to see how the dynamic plays out because both sides are going to be pushing back.”