Bloomberg News

Boise State May Lose $40,000 From Nike Along With Football Coach

December 11, 2013

Chris Petersen’s departure for the University of Washington may cost Boise State University more than its football coach. It also has a $40,000-a-year payment from Nike Inc. (NKE:US) on the line.

Boise State’s sponsorship contract with Nike says the world’s largest sporting goods maker can reduce cash payments to the school if Petersen is no longer with the team. Petersen, who finished the season with his team ranked in the top 20 six of the past seven years, left last week after eight years at Boise State to take over Washington’s football program in the Pac-12 Conference.

The eight-year agreement with Nike gives Boise State $1.08 million in products and equipment this year and an additional $40,000 in cash. Nike can reduce that at its own discretion if it decides the brand value diminished with Petersen’s departure, according to the contract.

“Coach Petersen was the face of our program and the face of the university in a lot of respects because athletics is the window to the school for so many,” Max Corbet, a spokesman for Boise State’s athletics department, said in a telephone interview. “We’ve had a great relationship with Nike and, even though we’ve lost Coach Petersen, I expect that to continue.”

Boise State plays in the Mountain West Conference, which is not one of the leagues that automatically gets a bid to one of the most lucrative Bowl Championship Series postseason games. Under Petersen, the team -- known for its bright blue artificial turf home field -- qualified for two BCS games and won them both.

Corbet said the school hadn’t heard from Nike about the contract. Brian Strong, a spokesman for Nike, said in a telephone interview that the company doesn’t comment on its contracts with universities.

Brand Value

The next coach will determine the effect of Petersen’s departure on the Broncos’ athletic brand, said David Carter, executive director of the Sports Business Institute at the University of Southern California.

“The brand is on the ascension and coaching candidates, as well as the footwear and apparel manufacturers, realize it,” Carter said in an e-mail. “Before Nike considers any financial reductions they will certainly wait to see how they may be able to leverage the program under its new leadership.”

Assistant Bob Gregory is in charge of the team until Petersen’s replacement is hired, the school said last week.

Petersen was 92-12 in eight years with the Broncos, helping the team develop into a top program. In addition to the BCS games, Boise State won five conference titles under Petersen.

Hawaii Bowl

The Broncos are 8-4 this year and unranked in the current Associated Press writers’ poll. The team didn’t qualify for last weekend’s Mountain West title game and will play Oregon State (6-6) in the Hawaii Bowl on Dec. 24.

The Nike contract, which covers all 18 athletic programs and was extended in October, provides the school $1.08 million in products next year, $1.15 million in 2015-16 and $1.23 million over the final three years. The cash compensation also rises in the final four years of the deal, to $50,000.

The contract includes performance bonuses for the Boise State football team and both men’s and women’s basketball teams. There is no language that says Nike can change the terms if any Broncos team’s on-field performance suffers.

“I feel like I needed to take a step out of Boise to grow and improve,” Petersen, 49, said when he was introduced in Washington. “It was very comfortable for me to be there, very easy to be there.”

Petersen will replace Steve Sarkisian, who was hired at the University of Southern California after five seasons with the Huskies. A two-time winner of the Paul “Bear” Bryant Award as college football’s national coach of the year, Petersen will earn $3.2 million in base compensation next year, the school said on its website. That would have made him the highest-paid coach in the Pac-12 this year, according to USA Today.

-- Editors: Dex McLuskey, Michael Sillup

To contact the reporter on this story: Eben Novy-Williams in New York at enovywilliam@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net


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