“You could get killed for that!”: Where did Nike apparel money go?

3/5/2015: No, of course I’m not talking about the $30K that UO administrators get each year as part of the lousy apparel contract they signed with Nike. That seems like an interesting potential conflict of interest, but I’m sure UO’s Office of Internal Audit has carefully vetted it, just as they must have done with Vin Lananna, the UO Foundation, Track Town, and UO’s lobbying efforts.

I’m talking about this report by Jeffrey Gettleman in the NYT (thanks to a helpful reader for the link):

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… In the documents, Nike provided detailed instructions on how the $100,000 yearly honorarium was to be used (to cover travel costs and phone bills, among other things). No details were provided for the commitment bonus, though, even after the former employee, who worked as an administrative assistant and in other jobs at Athletics Kenya for more than 10 years, wrote to a Nike executive asking him.

In a sworn statement provided to Kenyan investigators, the former assistant said the $500,000 commitment bonus was “bribe money from Nike” so that the top officials could pay back the $200,000 from the scuttled deal with the Chinese company and then make even more by agreeing to sign up again with Nike.

The former administrative assistant requested that his name not be revealed, saying it was extremely dangerous to expose high-level corruption in Kenya — a sentiment shared by others.

“Put that away! You could get killed for that!” exclaimed a member of Athletics Kenya’s board, his eyes widening when a reporter pulled out the amended contract from Nike listing the $500,000 commitment bonus during an interview at a quiet Nairobi restaurant.

 

6/17/2015 update: The WSJ has a good summary of the apparel deal between Nike and the Brazilian soccer team, and the secret Swiss bank account side payment, here. (Gated, also try here.)

UO has its own apparel deal with Nike, some stories about that are below. The public records were heavily redacted by Dave Hubin’s public records office, so it’s unclear whether or not the same UO administrators who signed off on the deal – which doesn’t seem that good for UO –  get free shoes or other swag from the $185K annual “discretionary apparel” budget. And if they do, would that be illegal?

The UO / Nike contract and discretionary apparel list are here, and Matthew Kish’s excellent database on these deals is here.

12/18/2014 update: Athletic department ditches Nike for Adidas, gets twice the cash

Matthew Kish has the story in the Portland Business Journal, here.

McElroy was hired from the Dallas Cowboys in May and charged with increasing the department’s revenue. The Adidas deal does that. It’s worth $4.2 million annually through 2023, more than double the $2.1 million the university will receive from Nike this year.

That’s at Arizona State University. Nike’s contract with UO is far stingier – just $600K in cash. Doesn’t someone have a fiduciary responsibility to get a better deal on this?

12/9/2014 update: Which football championship team has the worst Nike contract? The Ducks.

From Matthew Kish in the Portland Business Journal:

Here’s a breakdown of Nike’s [athletic apparel] deal with each university in the playoffs. The terms cover the 2014-15 academic year [reordered in descending order of cash payment]:

– Ohio State: $2.5 million in equipment and apparel and nearly $1.5 million in cash. The university also gets $150,000 in discretionary apparel, typically for athletic department personnel.

– Florida State: $3 million in equipment and apparel and $1.4 million in cash.

– Alabama: $2.8 million in equipment and apparel, $780,000 in cash.

– Oregon: $2.2 million in equipment and apparel and $600,000 in cash. The university also gets $185,000 in discretionary apparel, typically for athletic department personnel.

But hey, we’re #1 in “discretionary apparel”!

From what I can tell from Dave Hubin’s redacted public records, $30K of that goes to our colleagues in Johnson Hall, presumably including some who signed off on the contract. So they’ll be looking good on their Jan 1 Rose Bowl junkets.

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2/3/2014 update: Under Armour pays Notre Dame $9M, Nike pays UO $600K

Nike just signed Tennessee to a new deal for $1M cash a year, plus $2M signing bonus.

1/23/2014: Our Uncle Phil drives a tough bargain. Nike’s merchandising deal with UO pays us just $600K a year. Meanwhile Notre Dame just closed on a 10 year deal with Nike competitor Under Armour for ~$9M a year. Bloomberg financial news has a report here:

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Adidas and Under Armour would love to get a marketing deal with the Ducks. Why won’t UO use this to negotiate with Nike for more money?

In part because a sweetheart deal for Nike is just part of the price the UO administration is willing to pay for the vague promise of $1B for the endowment, someday. It would pay off big in outside offers and raises for every admin involved. And perhaps also because Nike gives UO administrators $30K worth of free sneakers and clothes. Portland Business Journal reporter Matthew Kish has a thorough report on these deals, here.

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30 Responses to “You could get killed for that!”: Where did Nike apparel money go?

  1. pirate .. without rats says:

    “the vague promise of 1B” … RIGHT! Repeat V.A.G.U.E.

    When are admin and their cohorts (read State government) gonna nut up to his base tactics and give him a challenge? IF UO is up for sale, and higher education with it, then let’s cut the strings to this puppet master and get the BEST deal.

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    • Elephant #1 says:

      I also heard that either the state treasurer or OUS came up with a ballpark, for the value of the UO (revenue, land, capital, access to funding, customer base, valuation, and all that), and even two billion is not much more than a pop up that lands in the catchers glove (or the standard first down Tedford Playcall).

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  2. Fishwrapper says:

    In that group, UO is also #1 in discretionary spending by Nike donors on facilities for athletics, [xxx suspicious foreign words redacted xxx]. Kind of makes up for the equipment and apparel.

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  3. Trickortreat says:

    To be fair here Phil Knight has given this school a lot of financial support. I don;t think too many other schools can say that Phil built them an arena or gave them the millions the UO has received. Well I mean the athletic department has received. In any case the UO has been a long term beneficiary of Phil Knight and Nike. I dislike the atrocious amount of money spent on athletics but we do need to look at this with some perspective.

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    • Sun Tzu says:

      Phil Knight is clearly a great guy. Look at all the wonderful things he has done:

      1) He paid for 25% of the library renovation but insisted the library be renamed for his family.

      2)The Knight Law School ran out of funds during construction and the fourth floor was never fully completed.

      3)The $25M Knight Chairs took 15 years to fill completely because the of the stipulation that the money be leveraged and many units, mostly in the humanities and social sciences, were unable to find matching funds.

      4) The original promise for arena funds was nastily withdrawn when the UO Senate voted to support an anti-sweatshop organization and the equivalent amount was given to Stanford Business School as a slap in the face to UO. Later Knight’s bulldog Howard Slusher said Knight would pay $110M towards a $160M arena only if the University would pay the difference by doing whatever was necessary including holding concerts, tractor pulls and monster truck rallies, all essential university activities. Finally we got a ~$227M arena funded by state bonds we we cannot afford with the Knight name on the front door.

      5) The Jockbox is yet another example of Knight largesse which only (?) costs the University ~$2M/yr. Not to mention that the top floors are closed to the university community.

      6) Then there is this fall’s Hayward Field tent fiasco in which it was an open secret that Knight was going to announce a big gift but backed out at the last moment. This is not the first nor the second time this has happened either.

      Phil Knight is clearly manipulating our university for his own goals which do not overlap much with our academic priorities. He is a very smart guy who gets what he wants. Wish I could say the same for our administrators whom, starting with DF, have been subservient to Knight for over 20 years. It is no surprise that many of our current problems, e.g. misguided priorities, overemphasis on athletics, poor choices of the past 4 presidents and difficulties finding a new president, are the result of our reliance on one uberdonor. We will stop this whoring and start rebuilding our integrity?

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      • outraged says:

        The “open secret” was made up by UOM. Phil was never going to be at the tent announcement and he has never said he would give the UO a billion. UOM made it up, so there was no fiasco and Phil didn’t “back out”. Honestly, do you believe everything he says?

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        • Sun Tzu says:

          Sorry to disappoint but UOM had nothing to do with the open secret that Phil Knight was planning to donate a ton of money to the university this past fall’s tent fiasco. All the VPs, Deans, PR flacks, and various other overpaid administrators were at the gathering and each thought PK was finally going to make good on the promise he has made every year for the past 20 yrs. Even the students working the crowd as hostesses and servers were told by their bosses that a big PK donation was to be announced that night. JH even cajoled retired deans (e.g., former AAA dean now living in Seattle) to come to the big event. PK did back out and at the very last minute (to be precise, he backed out ~45 min before the expected announcement at 9pm). UOM might go overboard from time to time but this was not one of those.

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          • Fact Check Check says:

            Sun Tzu is very well informed. Phil Knight has been incredibly savvy in leveraging his buying power for actual power using the absolute minimum number of dollars.

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          • observer says:

            Wasn’t this also tied up with the WC Track and Field bid?
            Seems to me I remember Weinhold mentioning in the official presentation that 1 billion was committed to UO to make the upgrades and renovations needed to host. This was just after the Hayward soiree, but maybe someone knew UO wouldn’t get it despite media certainty. It’s possible some global users don’t like him, and aren’t impressed with his local projects used as buy-in.

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      • outraged says:

        You seem to know Phil so very well, or are you mind reading? Do you always attribute your own paranoid fantasies to others? Would you really rather that Phil not give this University a dime? Can anyone out there take a larger view than their own personal axe to grind?

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      • Don't blame Phil says:

        I share the concerns about our university’s dubious priorities, but it is silly to blame Phil. We should focus the microscope on our overpaid administrators who care the most about their own salaries and perks and a crumbling corporate model of university administration. Our administrators are the ones who choose to let donors’ whims influence the direction of the UO rather than an appreciation of academic excellence.

        Is somebody seriously blaming Phil for only paying for the first three floors of a new law school?? That is ridiculous. If we look only at his donations to the academic side, he stands as one of the most generous benefactors in UO’s history. It is our ADMINS that let a shortsighted focus on the bottom line undermine support for excellence in what matters…academics and research profile.

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        • Sun Tzu says:

          RE: Don’t blame Phil
          I agree Phil is not all to blame and that our administrators should never have allowed a mega-donor to call the shots at our university. They should be held accountable (but they won’t because the Board is filled with rich self-important donors with fallacious corporate attitudes how a university is supposed to run ). It strains the imagination however that Knight, a supposedly very savvy person, would use a public university as his own private fantasy athletic team if he was really interested in academics. And as someone with an insider’s knowledge of Knight’s interactions with the university for the past 20+ yrs, I can assure you Knight’s actions and dealings with the university have been generally underhanded and manipulative (and his bulldog Slusher is one mean SOB). Knight is also behind some of the recent Presidential hires and departures. So let’s not give Knight a free ride just because he is ultrarich and has give less than 10% of his overall UO donations to academics. The tail should stop wagging the dog (sorry Dog) even if the tail is bigger and meaner than the body.

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          • musing says:

            Great summation. Best one so far.
            Two key points: “…very savvy person..” and ” .. would use..”. When those two key operations are combined, we see what’s happened at UO.

            Manipulative users are very good at finding chinks and kinks where they can break apart the shale, making oil flow to their financial benefit and supposed glory.

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  4. Anonymous2 says:

    You *do* realize that Phil Knight has given us, among other things, a law school, a library, and $25,000,000 for faculty endowments, and that he may–and that how we treat him may determine whether he will–give us an even bigger gift in the future? What are you trying to accomplish by antagonizing him (and antagonizing Nike is the same thing)? Are you mentally ill or something?

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    • uomatters says:

      Sorry, but it’s been a while since we’ve had to tug the forelock on this side of the Atlantic. At this point many of us are constitutionally incapable of that sort of subservience.

      That said, of course I’m very grateful for Knight’s gifts to UO. And skeptical at the same time.

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    • Daniel Pope says:

      Correct me if I’m wrong, but I don’t think Knight has given a nickel to academics since 2000, when UO (briefly) joined the Worker’s Rights Consortium. Does anyone know anything about the rumored Knight gigagift that didn’t arrive with this fall’s fundraising campaign kickoff?

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      • Sports Fan says:

        This gets bandied about a lot but isn’t technically true. A UOAA representative once said that he makes regular donations to the University that, over the past ~20 years, have added up to about $5 million.

        UO has received major gifts before Phil Knight was born and will receive major gifts after he dies. But the inertia is striking — no one seems willing to act on major improvements unless Knight has improved and is “involved.” That extends to the administrators who court donations. The way (athletic) donors talk, it’s amazing anything gets done around Eugene without Knight’s say-so.

        He’s had a couple of good business ideas over the years but as a project manager he has a disappointing, if not abysmal, track record, as shown above.

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  5. 12 tone row says:

    I appreciate your skepticism, UOM.

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  6. uo graduate says:

    “phil knight the benefactor”…reminds me of, “but Mussolini made the trains run on time…and “but Hitler put Germany back to work”…

    a Faustian Bargain was made with that guy…

    someone mentioned UCSB…go to the campus and take a look at the STUDENT facilities for sports…or go to Berkeley and take a look…and see EXACTLY where the UC system puts their money for students…besides getting the top kids they also make the place enjoyable for students…Oregon looks like a slop shop compared to those campuses for student facilities…

    Cal State campuses are not that far behind in putting their money into student facilities…

    or go to UDub and tour the campus and SEE exactly where Gates put his money to honor his Mom and Dad…try some underground garages…and the general campus…

    then get back to us on just how great Phil Knight has been for Oregon

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    • outraged says:

      SERIOUSLY???? You are comparing Phil Knight to Mussolini and Hitler? A “faustian bargain”?? Fantasize much?

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      • Thom Aquinas says:

        “Faustian Bargain” is VERY appropriate for someone who attaches so many stipulations to their donations. Isn’t that actually illegal? Where have I read that…..? In the OAR? I must be fantasizing….

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  7. outraged says:

    What short memories people have. Phil gave 25 mil for FACULTY, the law school would not have been built for STUDENTS, the library is for STUDENTS and believe it or not the STUDENTS love the fact that we have a Heisman winner and are getting a ton of publicity for Oregon. Without athletics most of the country wouldn’t know we exist. The whining on this blog is stunning.

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    • Sports Fan says:

      Without academics most of the country wouldn’t know we exist, either.

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      • Thom Aquinas says:

        In fact, I never heard of UO and the Bowl of Ducks before. I heard of Frank Stahl and George Streisinger, and several other Bio Profs first, and it was they who put the UO on the map for me. I am sure the same is true for most students and scholars in their respective academic departments.

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        • Fact Check Check says:

          You’re wrong that most students have never heard of UO’s athletic accomplishments. However, you’re still right that it has little to do with why students are coming here in greater numbers than ever before. It’s because of the changes in the education system in California, and enrollment from China. At least in China, we can confidently say that students don’t give a damn about football. The University didn’t even do recruiting in China, our increased enrollment is purely due to changes in the global economy. The increased undergrad enrollment numbers also has little to do with “branding”, it’s because of UO’s entrance requirements and tuition costs. There is no evidence to support that athletics has anything more than a casual correlation with increased enrollment.

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    • Jack Straw Man says:

      “Without athletics most of the country wouldn’t know we exist.”

      This is probably a true statement, since most of the country doesn’t support, or actively seeks to destroy, public education.

      It’s easy to see college sports as an attempt to bribe otherwise hostile voters into supporting public education. I.e., saying to them, you may hate eggheads but you love helmets, so support us and you can have them.

      But the problem is, this never actually convinces that “most of the country” to stop hating eggheads, and the helmets keep finding ways to divert that money to themselves.

      I say it’s better that we go back to “most of the country” not knowing we exist. How much worse off could we be?

      Cold turkey. It’s the only way.

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  8. Pinto says:

    #1 Research Public University in the US.” That’s what it reads on the side of a MAX train in Portland. Is that claim by the UO true? According to whom? I didn’t see an attribution.

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  9. Old Man says:

    The #1 refers to a group of 100+ universities in the Carnegie_Classification_of_Institutions_of_Higher_Education. List is here:
    https://en.wikipedia.org/wiki/List_of_research_universities_in_the_United_States. The list is alphabetical, with no indication of where in the group the UO stands. The MAX sign certainly invites a more exalted interpretation.

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  10. numnum says:

    as i recall placing UO in a poor position during negotiations ( going below market value) is a violation of purchasing regulations as is accepted items for personal gain (clothing),,,btw word has it that free clothes goes a long way towards accessing UO facilities “off the clock”….

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  11. angry old lady says:

    After all the reading I am willing to put it out there that the UO admin is nothing short of prostituting the UO for their own paychecks and Uncle P is the one doling out the change.
    Uncle P found a sucker in our past admin to do anything he bid for $, and it has been that way for decades thanks to Pres DF who started it all. The institutional corruption is astounding. Not one admin is willing to stand up and say enough….everyone of them have scrapped their morals and ethics (if any of them had them to begin with) to get more dollars in their pockets… they don’t care if its Uncle P or the students that pay, its all about their wealth and nothing more, They give less than a flying F*Ck for the suffering of students and their futures, and our faculty is nothing short of a nuisance to them. Never mind showing a little moxy and tell uncle P to shove off or even give him boundaries to live by.

    Students should move on to other institutions with the balls to provide them an education and our faculty???? should retire, move on, go private….let the admin and Uncle P have the land, buildings, and everything else. Uncle P could then name all the buildings after himself and his family, friends or maybe his dog….for a price of course. Then let them see how it works for them and their Uncle. ummmm the corruption is so thick and complete… they would throw a party in honor of getting their way.

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