Ohio State to earn 18% of apparel sales from $85M exclusive contract

Kristen Mitchell
Thu, 13 Feb 2014 22:28:58 +0000
Campus, apparel, contract, exclusive, J. America, ohio state, osu

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Ohio State is expected to collect 18 percent on net sales of licensed merchandise in royalties as part of its exclusive, 10-year contract with apparel company J. America that is worth $85 million.

According to the contract with J. America, which was obtained by The Lantern Thursday, J. America was set to pay OSU an upfront “advance against future royalties” of $20 million.

OSU spokesman Gary Lewis said in an email the university is also partnering with “internationally recognized expert in global labor issues” expert Verité, to “consult on supply-chain management including factory monitoring protocols, a framework for campus community involvement and performance measures that align with Ohio State’s existing code of conduct.”

It was announced in November 2012 that OSU had entered a 10-year, $97 million agreement with two apparel and retail businesses, J. America Sportswear and Fanatics Inc., to exclusively produce and sell university apparel. No agreement, however, has been finalized with Fanatics Inc.

The agreement decreases the number of factories OSU would need to monitor for human rights issues to between 25 and 30 from more than 800, the email from Lewis said.

Other vendors have been considered to fill the role Fanatics was originally set to play, and in January, Lewis said apparel company LIDS Sports Group, based in Indianapolis, took over online apparel in September and the stadium and store apparel in July.

“The university is exploring options in regard to merchandising operations, but Lids has been serving in that capacity since September,” Lewis said in a follow-up email Thursday. “No longer-term contract has been signed at this point, but it is anticipated that a long-term contract will be signed with an operator in the near future.”

The $85 million partnership with J. America, based out of Webberville, Mich., accounts for nearly two-thirds of OSU’s trademark licensing revenue, according to the filled records request.

The contract also states that J. America will “provide no fewer than three student internship positions each year,” two of which are expected to be paid.

The money is to be allotted to fund student scholarships, support opportunities for student-athletes, increase staffing in the Office of Student Life and support a new OSU Alumni Association career management office.