October 12, 2020
Under Armour, UCLA $200 Million Lawsuit Intensifies
Under Armour wants the court to dismiss UCLA’s lawsuit, which centers on the largest branded apparel sponsorship deal in college sports history.
A legal battle between UCLA and Under Armour that centers on the largest branded apparel sponsorship deal in college sports history is heating up.
In a recent court filing, Baltimore-based athletic wear maker Under Armour asserted that it didn’t violate the record-setting $280 million deal it struck with UCLA (University of California, Los Angeles) to provide the school’s athletic teams with uniforms and other apparel by pulling out of the contract earlier this year amid the COVID-19 pandemic.
Inked in 2016, Under Armour still owed $200 million on the 15-year deal. When it decided to terminate, UCLA sued for breach of contract, first in federal court and, after withdrawing that complaint, then in state court. UCLA is seeking $200 million in damages.
In the new filing, Under Armour maintains that COVID-19 “upended this deal,” giving grounds for the contract termination.
The apparel brand argued that the NCAA and Pac-12 (UCLA’s athletic conference) cancelling sporting events in March due to the coronavirus rendered the university’s coaches, staff and athletes unable to wear – and thus promote – Under Armour products, which constituted a “Force Majeure,” or catastrophic event that prevents the performance of a contract and thereby ultimately can alleviate parties from the responsibility of fulfilling it.
In particular, Under Armour asserts that if the catastrophic event lasts for more than 100 days, the agreement would allow for termination of the contract.
Additionally, Under Armour’s attorneys believe it can terminate the contract if a UCLA team failed to play at least half its season for any reason. Also, Under Armour thinks it has grounds to vacate the contract because a UCLA soccer coach was indicted in connection with a sweeping federal investigation – “Operation Varsity Blues” – that exposed a college admissions cheating scandal.
Under Armour wants the court to dismiss UCLA’s suit.
UCLA, however, said that Under Armour simply decided the contract it had agreed to was too expensive and was looking for an excuse to back out. The brand should be held liable for the $200 million it owes, the university asserts.
“Following years of declining business, Under Armour’s corporate leadership apparently decided that the UCLA deal was over-market and too expensive for a troubled company,” UCLA’s lawsuit says.
“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 over the summer. “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.”
In its suit, UCLA further accuses Under Armour of deceiving the university about the company’s financial strength when the deal was signed. Under Armour told investors in July 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.