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UCLA Sues Under Armour for More Than $200 Million

The biggest apparel sponsorship deal in college sports history has descended into a legal battle.

The largest branded apparel sponsorship deal in the history of college sports has not gone swimmingly.

The University of California, Los Angeles (UCLA) is suing Baltimore-based athletic wear maker Under Armour for more than $200 million in damages tied to an alleged breach of contract.

UCLA

UCLA says Under Armour falsely aggrandized its financial strength to coax the university into signing a $280 million apparel sponsorship deal, but then failed to make scheduled payments and provide the products it promised.

In June, Under Armour told UCLA that it was terminating the 15-year contract with the university, just three years after having inked it. At the time of the termination, Under Armour owed UCLA more than $200 million, per the terms of the original contract.

Under Armour said it had legal grounds to end the relationship. The apparel brand told UCLA that it was invoking a force majeure clause in the contract as a result of the COVID-19 pandemic, which has canceled college sports since March.

Additionally, Under Armour asserted its right to terminate based on the UCLA baseball team completing less than 50% of its games last season, and over what it stated was the university’s failure to take “reasonably appropriate action” following the arrest and indictment of men’s soccer coach Jorge Salcedo in connection with a college admissions cheating scandal.

“Under Armour has recently made the difficult decision to discontinue our partnership with UCLA, as we have been paying for marketing benefits that we have not received for an extended time period,” the company said in terminating the UCLA contract. “The agreement allows us to terminate in such an event and we are exercising that right.”

UCLA thinks otherwise, saying that it had lived up to the terms of the contract. “It is unfortunate that Under Armour is opportunistically using the global pandemic to try to walk away from a binding agreement it made in 2016 but no longer likes,” Mary Osako, UCLA’s vice chancellor for strategic communications, said in a statement. “UCLA has met the terms of the agreement, which does not require that games in any sport be played on a particular schedule. We filed this lawsuit in order to support our student-athletes and the broader UCLA community, including the athletic department that has brought 118 national championships to Westwood.”

Under Armour believes it’s in the right and is prepared to fight things out in court, but the company noted in a statement that it would be open to working out a “reasonable and appropriate transition for the university, and most importantly for the student-athletes.”

In its suit, UCLA accuses Under Armour of deceiving the university about the company’s financial strength when the deal was signed. Under Armour told investors last month that federal authorities would be recommending that the company incur penalties for having made its financial position look stronger than it was from the third quarter of 2015 to the end of 2016 – a time when the UCLA contract was being negotiated.

UCLA is looking for a new apparel sponsorship partner. The university has reportedly had talks with four apparel companies, including Nike.