'U' announces 7-year, $25 million deal with Nike

By David Enders

Daily Staff Reporter

Following seven months without an athletic apparel contract, the University announced a seven-year deal with Nike yesterday. The deal, signed Jan. 8, ends negotiations that have been ongoing since the University's previous contract with Nike ended last May.

Under the agreement, Nike will outfit all varsity teams and pay $1.2 million yearly for the right to license products bearing the Michigan logo. Including the equipment provided, the deal is valued at between $25 and $28 million - more than double the previous six-year deal.

It officially goes into effect April 1 and runs through July 31, 2008.

"This is a very good deal financially for the athletic department," University President Lee Bollinger said yesterday.

The deal continues a 20-year University relationship with Nike and immediately came under fire from labor rights activists who claimed language protecting worker's rights in third-world factories was not strong enough. The contract adopts labor standards set forth by the Collegiate Licensing Company.

"We feel that something very important has been accomplished by getting Nike to abide by the labor rights human code," Bollinger said. The company had dropped out of a winter 1999 agreement with the University after Bollinger signed onto the Workers Rights Consortium in February 2000. The WRC is a primarily student-developed policy to enforce collegiate labor codes of conduct.

The CLC provides guidelines for worker's rights, including hours worked per week, wages, child labor and conditions.

The deal inflamed labor activists on campus because it was signed one day prior to a marathon meeting in which the University's Advisory Committee on Labor Standards and Human Rights approved a finalized draft of the University's own Code of Worker's Rights. Some of the activists said the language in the CLC is weak and vague.

Bollinger responded to the criticisms with optimism, pointing out that it was the first time Nike had ever agreed to a contract with labor rights stipulations.

"Our teams have to have clothing," Bollinger said. "We were also insistent there be labor rights provisions in the contract. ... We decided the very best we can do is get Nike to agree to the CLC code, plus some additional points."

The additional points include stipulations about the rights of female workers, including language precluding women from working with chemicals possibly dangerous to unborn children.

Athletic Director Bill Martin engineered the deal. "The pressure was really on our backs from a timing standpoint," Martin said. "I'd developed a contingency plan."

Martin also said his frequent meetings with University athletes made clear what apparel provider they wanted. "Unanimously everyone has said we want Nike."

Larry Root, chair of the University's Advisory Committee on Labor Standards and Human Rights, said the committee hasn't discussed the CLC agreement.

"The committee hasn't acted on this - it's something we need to talk about," Root said.

Bollinger and the committee "spoke (yesterday) morning about some of the differences between (the CLC) and the draft code," Root said. "There's some differences in the wording and in the rights allowed to freedom of association and collective bargaining, but I think the clearest difference is in hours of work.

"An employer can require up to 60 hours of mandatory work, and I think the CLC allows an exception for extraordinary circumstances - it allows people to go over that 60.

"One person can look at it and say it is a legitimate recognition of extraordinary circumstances, one person could say it opens it up for abuses."

RC senior and Students Organizing for Labor and Economic Equality member Peter Romer-Friedman said the University should have adopted prior versions of the committee's code instead of the CLC version.

"It's a slap in the face to the workers who are on strike including pregnant women who were brutally beaten by police," he said, referring to an apparent strike that began last week at a Nike factory in Puebla, Mexico, that produces University-licensed apparel. SOLE claims strike-breaking police were used to end an attempt at collective bargaining.

"Nike says this is human rights, but we disagree," Romer-Friedman said.

Romer-Friedman offered resolutions at the Michigan Student Assembly meeting last night condemning the alleged use of strike-breakers in Mexico and to advocate that the University implement its recently approved workers rights code. Both passed.

University General Counsel Marvin Krislov said the CLC code had been adopted early in the Nike negotiations.

"We can draft codes from now until summer, but now we need to have something that is enforced."

Nike Director of College Sports Marketing Kit Morris declined to comment on the specifics of the deal or how it rates with other collegiate Nike deals.

"It reflects the high value we place on the University as a partner and the stature U of M has in the world of higher education and the world of sports," Morris said.

Morris also responded to questions raised about Nike's human rights practices. "In terms of labor and human rights issues, Nike was the first company in our industry to establish a labor standards code of conduct," he said. "We established unilaterally higher safety standards for people working in our factories, we established higher clean air standards by eliminating the use of solvent-based adhesives in our shoes, we have raised wages 100 percent in Indonesia over the past year."

Nike Director of Global Issues Management Vada Manager said the average wage of an Indonesian Nike factory worker in 1998 was $49 per month.

Manager also responded to the complaints of worker's rights groups. "I think that may be a problem for a small segment of the university population," he said.

Krislov, Bollinger and Martin all agreed the contract was a victory, pointing out that Nike agreed to make full yearly financial disclosures on the contract, another first for the company.

"Nike is very concerned with setting a corporate precedent," Krislov said. "All campuses will want a similar deal on the human rights side. We are in a position to take some leadership. This was a compromise they felt they could live with."

Bollinger and Krislov agreed that there was no plan of action in the event of a complaint such as the Kukdong strike, but that action would be taken.

"Because we do not have an agreed upon framework does not mean we would do nothing," Bollinger said. "We're not there yet. This is a process that's going to take years to develop and refine."

"We're going to take any credible claims very seriously," Krislov said. "We've spent a lot of money and time on the whole enterprise and I think there's a commitment."

The University first signed a deal with Nike to outfit teams and license apparel in 1994, but Nike has provided football apparel since the 1980s. The six-year deal paid $600,000 per year to the University and ended with a total value of $11 million including equipment and retail royalties.

University regents were concerned after the 1994 deal that they had not been properly consulted, but expressed a conciliatory air yesterday.

"I'm happy that it's been executed," said Regent Dan Horning (R-Grand Haven). "It will help the athletic department immensely."