Fanatics is applying the professional sports model to the college arena for the first time.
The leader in licensed sports merchandise has inked a 10-year deal with the University of Oregon to license, manufacture and sell its sports gear beginning on Jan. 1, 2020.
The deal is worth $23 million, which includes a $1.5 million signing bonus for the school, plus a guarantee of $21.5 million in royalties over the course of the partnership, according to Bloomberg.
Kyle Henley, vice president of communications for the university, said the agreement “is a hedge against volatility.” Earlier this week, the school said it is “facing some financial headwinds that could drive a budget gap of $5.6 million.” The Fanatics deal should help fill that void.
In inking the deal, the university stressed that the Fanatics deal excludes Nike, which is the official on-field performance gear provider, as well as Columbia Sportswear, which manufactures some official outerwear. Both Nike and Columbia are based in Oregon.
In the past, Fanatics had operated the college’s online store, but this agreement covers the manufacturing of apparel, headwear and other products for the first time. It also allows Fanatics to sell the product to other retailers as well as online.
Derek Eiler, college executive vice president for Fanatics, said this deal represents a new model for the industry, one that a company spokesman said the company hopes can be applied to other schools in the future.
“We’ll be in a position to make sure retailers have new product quickly,” said Fanatics college senior vice president Chris Prindiville. “Seldom in college have there been true long-term partnerships. Now there’s stability. We can now really invest in the Oregon business as their retail partner, their licensing partner, their e-commerce partner, wholesale partner and licensing agency.”