Officials Announce 8-Year Nike Contract

The eight-year contract, the third UNC has entered with Nike, is valued at $28.34 million, a substantial increase from the University's current five-year $11.6 million contract that expires at the end of this school year.

The contract, signed Monday, is landmark in nature not only because of its size and monetary worth but also because of the incorporation of UNC's labor code, a topic of contention on campus in recent years.

The deal also includes a stipulation giving the University 10 percent of royalties from the sale of merchandise bearing the UNC logo, up from 8 percent in the previous deal. The new contract takes effect July 1, 2002.

"We are comfortable in saying that this is one of the largest," said Director of Athletics Dick Baddour at Tuesday's press conference. Through the contract, Nike will provide all 28 UNC varsity sports with uniforms, practice gear and equipment. Baddour said UNC is one of about half a dozen schools that have all their varsity sports funded by Nike.

Moeser said the money from Nike is particularly important in light of the state budget crisis. "This helps us with our commitment to support the entirety of the program. Without it, we'd have two choices -- fewer sports or massive reallocation of funds from the University."

But the deal also is groundbreaking in the area of labor standards, Moeser said. "This new contract extension between the University and Nike sets a new standard for social responsibility," Moeser said.

The contract calls for Nike to abide by the University's Code of Labor Conduct and for Nike to disclose all manufacturing plants that make UNC merchandise and uniforms. Those plants are subject to independent external monitoring by the Fair Labor Association, of which the University is a dues-paying member.

In addition, UNC has promised to implement a policy requiring all apparel bearing the University's logo to be made by licensed dealers who are subject to the same standards as Nike. UNC has about 580 licensees with 2,700 manufacturing sites worldwide.

Baddour said UNC negotiators suggested the idea of the uniform policy and found Nike was receptive to it. "That actually was a success we didn't anticipate, moving into another area," said Rut Tufts, co-chairman of UNC's Labor Licensing Code Advisory Committee.

The contract also includes an escape clause that allows UNC to terminate the agreement with Nike if the company fails to remedy any recurring violations of the University's labor code in its facilities.

Baddour said it is hard to say exactly what would warrant termination. "That's something you have to look at as it's happening," Baddour said.

As a part of the contract, Nike also is financing trips for two members of the University community to visit one of the manufacturing plants where UNC apparel is made. A committee made up of 19 students, faculty and staff members advised the negotiators during the deal. "We have been completely open and candid with the campus as these discussions unfolded," Moeser said.

Besides the labor provisions, the contract also includes clauses that benefit nonathletes. As a part of the deal, Nike will give $800,000 to the Chancellor's Academic Enhancement Fund each year, money Moeser said will benefit undergraduate education. The contract also gives the Department of Athletics $200,000, half of which will be used to fund teams without additional Nike contracts.

The debate on the use of corporate signage in Kenan Stadium and the Smith Center also arose in the recontracting talks. There is currently no such signage in the facilities, but if the University adopts a policy allowing it, Nike reserves the right to receive signage as part of the contract.

"All of us agree the culture of this place is special," Moeser said. "The atmosphere of Kenan Stadium and the Smith Center is special. If we do it, it'll be carefully done and discreetly done."

Baddour said negotiations with Nike were cordial and that UNC officials never felt pressure. "At no time during these nine years has the University or Department of Athletics compromised our values or our culture, nor has Nike expected us to."

The University Editor can be reached at udesk@unc.edu.