On Wednesday, August 26, UCLA had sued the athletic apparel company Under Armour for terminating their $280 million sponsorship agreement. Both sides have their own statements on the situation and will be looking to get this issue resolved in legal battle.
The Background behind the Lawsuit
The reason that UCLA had sued Under Armour is on the grounds that Under Armour had breached their contract, breach of implied covenant of good faith and fair dealing. In May of 2016, Under Armour and UCLA had signed a deal that was the largest apparel deal in collegiate sports history at the time. This deal would help the college in financial support and also gave the apparel company exclusive rights with products for over 15 years. Now, with the PAC-12 season being cancelled for the fall of 2020 due to COVID-19, sports industries have been significantly impacted by the cancellation of sports as well as no fans in attendance.
According to an article from ESPN Senior Writer Mark Schlabach, the lawsuit had stated “By 2020, Under Armour wanted to get out of the deal-not because of anything UCLA did, but because the deal now seemed too expensive for the financially troubled sportswear company.” In the same article, a statement was made from UCLA vice chancellor of strategic communications Mary Osako in which she stated “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.”
Under Armour made a statement when the company announced they would be ending the agreement by stating “Under Armour has recently made the difficult decision to discontinue our partnership with UCLA, as we have been paying for marketing benefits that we have not received for an extended time period. The agreement allows us to terminate in such an event and we are exercising that right.”
The case in terms of Under Armour
In terms of the reasoning behind the sportswear company Under Armour, they have made a valid case and look to the contract in which they originally agreed to with UCLA. However, the company should be willing to adjust to the times that everyone is dealing with throughout the United States as many companies are trying to adjust to the lack of income coming in due to the pandemic as well as finding new and safe ways to help customers. Instead of approaching UCLA with the means of working this deal out and trying to help with the pandemic situation, they have instead turned the college the cold shoulder and speculation leads to believe that the company blamed the pandemic on not being able to make payments for the deal they agreed too.
Under Armour needs to be able make these payments as the deal was in 2016 as mentioned earlier, while it is unfortunate that apparel companies such as these are taking a hit financially, there are others that are also being impacted by the pandemic that are struggle to make the adjustments needed to survive.
UCLA has a valid case in this lawsuit
From UCLA and it’s point of view, the pandemic shouldn’t have that much significant of an impact in which Under Armour has to back out of the deal. This is why the college is seeking legal action and their views should be warranted as the college is trying to find ways to deal with the pandemic with student athletes no longer able to play. The impact that the pandemic has has on the players, doesn’t outweigh the need for Under Armour to back out of the deal as the sportswear company can still promote and sell merchandise with some creative thinking in order to remain safe. UCLA has every right to pursue legal action and needs their case heard as this pandemic has affected everyone and they should be working together with the betterment of everyone that is involved and has impacted.
