Lexington, Kentucky, August 12, 2025
News Summary
The University of Kentucky athletics has signed a significant 10-year contract extension with Nike worth $76.5 million. Starting July 1, this agreement enhances annual financial support from Nike, raising it to $7 million in five years and introducing a new royalty structure for branded products. Performance-based bonuses incentivize athletic success, with potential rewards for championship wins. The deal also offers internship opportunities for students and reinforces Kentucky’s competitive edge in college sports apparel.
Lexington, Kentucky — The University of Kentucky athletics recently secured a 10-year contract extension worth $76.5 million with Nike, a partnership that has significantly benefited the school’s sports programs since 1997. This deal commenced on July 1 and will run through the 2034-35 school year, marking a pivotal moment in their longstanding collaboration.
The terms of the new contract show a substantial increase in annual financial support. Nike’s annual payout is set to grow from $2.125 million in the final year of the previous agreement to a robust $7 million starting in the 2025-26 fiscal year. This annual contribution of $7 million is locked in for the next five years, with an increase to $7.5 million anticipated in the 2030-31 school year.
In addition to the baseline revenue, the revamped contract includes a new royalty system. Kentucky will earn a 15% royalty on all products (except shoes) bearing the university’s logo, alongside a 5% royalty on shoe sales. Over the course of the decade, Kentucky is guaranteed a minimum of $4 million in royalties, a significant boost from the flat royalty fee of $1.8 million per year outlined in the previous contract.
To incentivize athletic success, Nike has introduced a performance-based bonus structure. Bonuses include $100,000 for achieving a football national championship, $50,000 for men’s or women’s basketball titles, and $25,000 for baseball or softball championships. Notably, up to $230,000 can be earned for winning the SEC and College Football Playoff in football.
The new contract also introduces revised clauses concerning penalties that could affect the university’s payouts, particularly in light of any NCAA sanctions. Under the previous agreement, Nike could decrease compensation due to probation, but the new contract stipulates a maximum reduction of 50% for football and 25% for basketball if they face television bans.
Moreover, Nike will enhance its support for UK’s student body by providing a summer internship for one selected student each year. As part of the agreement, Kentucky will also provide season tickets for Nike, including 12 for football, 8 for men’s basketball, and 8 for women’s basketball, along with tickets for other sports.
The longstanding partnership between Kentucky and Nike has evolved over the years, with past renegotiations occurring in 2006 and 2013, ensuring that the university remains at the forefront of athletic apparel as well as competitive performance. Presently, the contract with Kentucky ranks as one of the largest in college sports, though Ohio State still leads with a deal valued at over $16 million annually.
This augmented financial arrangement bears significance given Kentucky’s estimated annual expenditure of roughly $20 million to pay its athletes, underscoring the necessity and impact of this partnership in maintaining a competitive athletic program.
FAQ
What is the value of the new contract extension between Kentucky Athletics and Nike?
The new contract extension is valued at $76.5 million over ten years.
When will the new contract take effect?
The contract began on July 1 and will last until the end of the 2034-35 school year.
How much will Kentucky earn annually from Nike under this contract?
Kentucky’s annual allotment from Nike will increase from $2.125 million in the previous contract to $7 million starting in the 2025-26 school year.
Are there any performance bonuses associated with the new contract?
Yes, there are performance bonuses for various championships, including $100,000 for winning a football national championship, $50,000 for basketball, and $25,000 for baseball or softball.
What is the royalty structure in the new contract?
Kentucky will receive a 15% royalty on products with UK logos (excluding shoes) and a 5% royalty on shoe sales.
| Key Features | Details |
|---|---|
| Contract Value | $76.5 million over 10 years |
| Annual Allotment | Increases to $7 million by 2025-26 |
| Royalty Structure | 15% on products (excluding shoes), 5% on shoes |
| Performance Bonuses | $100,000 for football championship, $50,000 for basketball, $25,000 for baseball/softball |
| Internship Opportunity | Yearly internship for UK student |
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Additional Resources
- On3: Kentucky Athletics New Apparel Deal with Nike
- Kentucky.com: New Nike Contract Overview
- Pro Football Network: Nike Deal Clause Details
- Google Search: Nike contract Kentucky Athletics
- Wikipedia: Nike, Inc.
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