Bad news on the financial front for Auburn’s athletic department as its value in the deal with Under Armour has fallen by 11 percent.
“Back in 2015, Auburn and Under Armour re-upped their partnership through 2025, a deal worth $78.2 million in total value, according to the contract. As part of the agreement, the school agreed to accept $10 million of stock, paid out over the life of the contract.
It hasn’t worked out. The contract was signed in Sept. 2015, less than a week after Under Armour hit an all-time high of $54.70. The company has struggled since, undergoing a multi-year restructuring that included the elimination of 40% of its product line. With shares currently trading around $9, that $10 million stock grant is now worth just $1.77 million, according to Sportico‘s calculations.
The school was essentially betting that Under Armour’s stock would rise over the course of the deal, increasing the value of the shares. While it hasn’t worked out that way, there’s still time. Auburn won’t recognize that loss until it sells the stocks, and a Tigers spokesman confirmed that the school still owns all the equity.”
The apparel company has recently made news by trying to get rid of its contract with both UCLA and Cal amid financial uncertainty.