The Baltimore-based sports apparel company announced Tuesday that it has signed the University of Notre Dame, one of the nation's most popular college football programs, to a 10-year exclusive deal to design and supply clothing, footwear and equipment for all of the school's men's and women's varsity teams.
The deal, which Notre Dame called the largest ever in college football, comes a day after Under Armour's headquarters in Locust Point was decorated with banners welcoming Texas A&M quarterback Johnny Manziel to its house. Manziel, who won the 2012 Heisman Trophy, said earlier this month he is entering the 2014 NFL draft.
Under Armour declined to comment on Manziel or the banners, but some took them to mean he's signed an endorsement deal with the brand, joining his future NFL quarterback peers Tom Brady and Cam Newton.
Under Armour CEO Kevin Plank said the agreement with Notre Dame and its storied, high-profile athletic program starts a new chapter for his $2 billion company, which he has said he would like to grow fivefold in the coming years.
"This is a pinch-me moment for me without question," the former Maryland football player said at a news conference in South Bend, Ind., according to a transcript provided by Notre Dame. "Partnering with one of the world's most respected and admired universities, it's really a game-changing event for our company. It puts us on a completely different level, and frankly we are ready for that level."
The agreement, Under Armour's 13th with a Division I school, follows Under Armour's $150 million acquisition of mobile workout company MapMyFitness in November and recently announced partnerships with the Naval Academy, Chilean soccer team Colo-Colo and the American Ballet Theater's Misty Copeland.
"It comes at a time when they're on a roll," said Needham & Co. analyst Sean McGowan.
Terms of the deal with Notre Dame, which starts July 1, were not disclosed, but if it is the richest such deal, it must be larger than the University of Michigan's recent $82 million, 10-year deal with Adidas. In 2005, Adidas agreed to pay Notre Dame upwards of $60 million for a contract that expires at the end of June.
Unusually, Notre Dame will receive stock in Under Armour as part of the agreement.
Under Armour beat out Nike and Adidas, neither of which offered stock, for the deal, said John Heisler, Notre Dame senior associate athletics director.
Under Armour shares surged Tuesday, up $2.79 each to close at $84.78.
Making Notre Dame a shareholder is a perk that reflects the wide exposure the Fighting Irish could provide Under Armour, McGowan said. Patriots quarterback Tom Brady also received equity when he signed an Under Armour endorsement deal in 2010.
"It's a recognition of the global nature and broader reach of the Notre Dame brand," McGowan said. "If you feel like you have that really strong brand that's going to matter a little bit extra, you ask for a little bit more."
Another reason for Under Armour to offer stock to Notre Dame is to entice the school away from Adidas, one of Under Armour's main competitors, said Amna Kirmani, a marketing professor at the University of Maryland's Robert H. Smith School of Business.
The sports apparel industry as a whole isn't expanding rapidly enough to support the kind of growth the company is aiming for, so Under Armour must take business from other companies, she said.
"The issue at this stage in their growth cycle is how do you grow from $2 billion to $10 billion?" Kirmani said. "Under Armour stepped in and offered Notre Dame a lot to get away from Adidas."
At Tuesday's news conference, Plank said Notre Dame's large fan base was critical to the appeal, a motivation the school's athletics director, Jack Swarbrick confirmed.
"A little insight into how his mind works," Swarbrick told reporters. "I got a text from him right after midnight Mass saying, 'I was just sitting here thinking about how many Catholics there are that we can sell to.'"
Swarbrick said Notre Dame also hopes to benefit from Under Armour's use of technology to gain a competitive edge, as well as help the company in areas such as product development.
"Our coaches and student-athletes look forward not only to using Under Armour's standard-setting performance footwear, uniforms, practice gear, and equipment — but also to working side by side with Under Armour to help make those products even better," he said.
Under Armour will incorporate Notre Dame into the company's marketing campaigns, it said.
Under Armour's forays into uniform supply have drawn attention and sometimes criticism. American flag-themed uniforms designed for Northwestern University in November as a fundraiser for the Wounded Warrior Project were criticized by some as being in poor taste, while flashy Maryland Pride uniforms unveiled at University of Maryland in 2011 also encountered doubters.
Notre Dame wants to introduce more consistency into the uniforms of the school's 26 different teams, but dramatic changes are unlikely, said John Heisler, Notre Dame senior associate athletics director.
The exception could be the annual Shamrock Series, the one game a year that is played on neutral territory when the team has experimented with different looks, he said.
"This is obviously going to take some time and effort and some digging down on their part," said Heisler, adding that Under Armour's previous design flaps had not been a concern. "I think Jack Swarbrick made it pretty clear that we'll be the ones to determine what these are going to look like."