The existing contract is the second one the University has entered into with Nike. UNC is one of just a half-dozen schools with which Nike has such a broad-based, all-sports agreement.
University officials are now renegotiating the contract with Nike. The negotiating team includes the athletic director, one trustee, UNC counsel and the vice chancellor for finance and administration. We hope to have the process completed before the end of spring.
We do not take lightly concerns that exist about the work practices of our licensees. The University is working through its membership in both the Fair Labor Association and the Worker Rights Consortium to contribute to the constructive and balanced resolution of these issues. The reputation of the University and the visibility of our athletic programs give us both the obligation and the opportunity to exert influence in these matters. In fact, our trademark licensing program is among the most successful nationwide and the revenue generated supports both academics and athletics.
Our relationship with Nike incorporates these considerations.
Our commitment to this issue is more than just rhetoric. The University remains committed to the work being done by the FLA and WRC, is supporting monitoring efforts at the Kukdong factory in Mexico where some Nike products are made and has been the site of an ongoing labor issue and is sponsoring a student's attendance at an upcoming WRC meeting. These are serious concerns. The University is addressing the issues relating to labor standards in the contract negotiations.
We also understand concerns about the commercialization of intercollegiate sports or about contracts with apparel companies that result in the association of the University with a particular company.
But neither the previous nor the existing contract with Nike has permitted related signage in the Smith Center or Kenan Stadium. That will continue to be true for the contract renewal that is being negotiated. We hope to be able to continue to keep these two venues free of commercial signage, despite the increasing pressure on the budget of the athletics department. Whether we have an apparel contract or not, our student-athletes and coaches will be wearing the apparel and using the equipment of some company or companies. Again, the reputation of the University and its athletic program creates the opportunity to provide uniforms and equipment for our teams and other benefits to the athletics department and University through this contract. We believe that we have obtained these benefits and can continue to do so without compromising the University's values.
Whenever the University enters into an agreement with an outside organization, we must be careful to protect the values of the University.
The Nike contract is unusual because of its size and because it results in student-athletes and coaches wearing apparel that bears the Nike logo. The chancellor and the Board of Trustees do not normally review elements involved in the negotiations for University contracts, but the Nike contract is actually reviewed at both levels. In addition to having to comply with all University regulations, this contract must also comply with applicable NCAA conditions.
