While the news, which sent Under Armour’s stock price tumbling Monday, sparked chatter in and around College Park about what the future holds for the school and its most important sponsor, the company said Tuesday it remains committed to the university.
“Under Armour remains as committed as ever to the University of Maryland as a trusted partner and longtime steward of the brand,” said Diane Pelkey, an Under Armour spokeswoman, in a statement. “Under Armour started on the very gridiron that the Terrapins football team calls home, and that legacy and the spirit of community at College Park still drives the brand today.”
Plank, a Maryland alum who was a walk-on football player for the Terps, and his company have been a cornerstone for Maryland’s athletic programs, and the company is navigating a period of turbulence just as the school finds itself desperate for money. The school is still in the midst of a $210 million renovation of Cole Field House, which is anchored by a state-of-the-art football practice facility, and it announced plans last month to build a new $36 million basketball practice space. That means the athletic department has two major projects with a big funding gap to fill.
Plank has donated $25 million to the Cole Field House project, nearly half of the $60 million that has been privately raised. The basketball facility is supposed to be privately funded, and the school has said that it has raised $19 million. It is not known publicly whether Plank or Under Armour has pledged any money to that project.
While Under Armour reported better than expected third-quarter results this week, it downgraded its full-year outlook and is now anticipating 2 percent growth compared with a previous expected range of 3 to 4 percent.
Regardless, it is financially tied to Maryland through the 2023-24 school year. The company signed a 10-year, $33 million contract extension with the Terps’ athletic department in 2014. It owes the school yearly payments of $1.725 million to $1.825 million, according to contract terms, and also goods and apparel for its athletic teams valued annually at $1.55 million to $1.75 million between now and the deal’s expiration date.
Under Armour’s recent struggles — after reporting profits of $259 million in 2016, the company reported losses the past two years, a total of nearly $95 million — have caught the attention of athletic department officials and boosters alike.
“Obviously when [the] SEC and [Department of] Justice is involved, it’s not good. However, these are long-term contracts, and with third-quarter earnings announced shortly, we will see what it is for short term,” a prominent donor said this week, before the company issued its quarterly numbers. “Long term, [Under Armour], like Adidas, isn’t going anywhere.”
The school signed its initial five-year, $17.5 million agreement with Under Armour in September 2008. Given Plank’s affinity for the athletic department and also the school’s proximity to the company’s headquarters, the two have shared a close relationship. Maryland athletes are often privy to new Under Armour products early, and the Terps have been featured in national advertising campaigns. The school has been connected to Under Armour much in the same way Nike and the University of Oregon are linked.
“It’s been really good to us,” men’s basketball coach Mark Turgeon said of the partnership. “The gear, everything has been good. So our relationship has been good.
Under Armour announced two weeks ago that Plank would step down as chief executive and take on the role of executive chairman and brand chief. He will be replaced by Patrik Frisk, the current chief operating officer. Frisk joined the company in 2017 after working for several other shoe and sports apparel companies and has no formal ties to the University of Maryland.
The company did not respond to specific questions about its future intentions with the school’s athletic department under Frisk’s leadership.
“Kevin Plank and Under Armour have been valued partners with Maryland Athletics for over fifteen years,” Maryland Athletic Director Damon Evans said in a statement. “We share the same passion for innovation in sport and health. Under Armour has made our program better and they have made our student-athletes better.”
Regardless of what happens with Under Armour, the school could continue to look to Plank as a valued private donor. He was an important figure in getting the Cole Field House renovation off the ground. The facility will house the football team, along with space for sports medicine and athlete dining and a large academic wing for research. The school expects the football performance center to open in the fall or winter of 2020, with the completion of the academic area coming a year later. The indoor practice field was completed in an earlier phase of the project and has been used by the team since the fall of 2017.
This fall, the school’s athletic department announced the public fundraising launch of its new basketball performance center, another ambitious project for a department that has yet to finish raising money for the football facility. Longtime Maryland basketball supporter Harvey Sanders has spearheaded the effort to raise funds. When asked whether Under Armour would be financially involved in the project, Evans said at a news conference last month: “What companies or donors may do wouldn’t be appropriate for me to comment at this particular time. But we will be soliciting any and everybody and would love to have their support.”
Asked about raising funds for two major projects simultaneously, Evans said: “I believe as an athletic department that we’ve got to continue to push and move forward and grow. Our basketball programs are important to us, the history and tradition that we have. I believe that we have the fan base and the support out there to do so. The $19 million that we’ve fundraised to date is a testament to that, so I have every bit of confidence that we’ll be able to raise the money to complete this project.”
The Under Armour relationship has long been a key recruiting tool for Maryland coaches, and players, coaches and staff have been outfitted in the brand for more than a decade. Before the season, Turgeon discussed the proposed basketball facility and what impresses recruits.
“They’re 18-year-old kids. You walk them in here, you get pretty excited, right?” he said. “The first time I walked in here, the hair on the back of my neck stood up: ‘Oh my gosh, this is awesome.’ … Then you’re showing them we’re an Under Armour school, all the gear we get because we’re Under Armour and all that kind of stuff. And then we do things right. ... We do things first-class.”
Abha Bhattarai contributed to this report.