Brady gets a stake in the company as part of the deal, something sports marketing experts said is unusual in the world of athlete endorsements.
Brady will make appearances at Under Armour stores and be featured in the company's advertising campaigns. He will also wear the company apparel during practice with the New England Patriots and will debut the company's newest cleat — to be sold in stores next year — in a future game.
The signing of the three-time Super Bowl champion follows the trajectory of the company from a small firm that built itself on grassroots marketing to a multibillion-dollar company with a bigger budget for such high-profile deals.
Being able to offer the ownership stake also helps Under Armour better compete for players against companies like Nike, the company Brady was with for most of his career, before breaking away to go with Under Armour.
"If you offer somebody a stake in your company that is pretty attractive," said Stephen McDaniel, an associate professor at the University of Maryland who teaches sports marketing and media. "In turn, Tom Brady is saying he thinks so much of this brand he wants to become part of it."
Under Armour officials didn't disclose financial details of the agreement, including how much of an ownership Brady gets.
Sports marketing experts said athletes are usually paid an annual fee and then often get incentives for certain milestones, such as reaching the Super Bowl. They might also get royalties for any products branded with their name and image. The better the player, the higher the fee.
"For Under Armour this is very significant in terms of brand impact," said Howe Burch, a former Reebok and Fila executive who is now an executive vice president and managing director at TBC advertising firm in Baltimore. "They've approached endorsements by starting with low profile personalities like Heather Mitts in soccer. Now they've established their credentials, and they're signing big name individuals like Michael Phelps and Tom Brady."
Under Armour's first endorsement deal was more than a decade ago with Eric Ogbogu, a former teammate of Under Armour founder Kevin Plank when they both played at the University of Maryland. He wasn't a star on the NFL field, but became famous for his role in Under Armour commercials. Known as "Big E," he made famous the company's now ubiquitous slogan, "We must protect this house."
"When we originally built the brand, Eric Ogbogu was really the face of the brand," said Matt Mirchin, head of sports marketing at Under Armour. "People didn't really know he was a professional football player."
The company now has endorsements with other high-profile players across many sports such as Ravens linebacker Ray Lewis and Olympic swimmer and hometown hero Phelps. It most recently signed Pro-Bowl wide receivers Miles Austin of the Dallas Cowboys and Raven Anquan Boldin.
Higher-profile endorsements give sports brands better exposure and authenticity, industry experts said. They also have the "I want to be like Mike affect," the famous slogan used by Nike to promote Michael Jordan's products. Many kids — and sometimes adults — want to be like the athletes they idolize and will be loyal to the brands that they wear.
"We want to grow up to be like people like Tom Brady, getting the touchdown in the last three seconds to win the game," McDaniel said.
Brady's representatives declined to be interviewed.
"It was important for me to align with a brand that shares my values and helps me perform at my best," Brady said in a statement. "Under Armour makes cutting-edge products for the next generation and for athletes who compete at the highest level."
Mirchin said that Brady and Plank first met at a sporting event two years ago. Brady said he liked the Under Armour product and the entrepreneurial spirit of the company. At the time, he was in a contract with Under Armour rival Nike.
Mirchin said Brady fits the company because, like Under Armour, he was an underdog who rose to the top. He was picked in the sixth round as the 199th selection in the NFL draft in 2000, Mirchin said. Brady began his first season as the fourth quarterback on the Patriots' depth chart.
"Tom will certainly bring additional visibility based on the team he plays for and being a Super Bowl MVP," Mirchin said. "It's always beneficial to attract high-profile players. And he transcends the football field, too."
Brady is also known off the field for his marriage to supermodel Gisele Bundchen and is in the fashion magazines as much as sports publications — with good and bad reactions from football fans. Most recently, his hairstyle that draws comparisons to the trademark 'do of teen icon Justin Bieber has sparked a "love it or hate it" reaction among the public.
"Brady has a certain stylish sensibility," Burch said. "He's a guy who can be on the cover of GQ — and probably has been — and on the cover of Sports Illustrated, too. It's nice to associate your brand to someone who can cross over like that."