The wisdominess of PK's move from Nike to Adidas is working wonders:

[PSUFTG]

I'm not a Pat Kraft fan but I'm pretty sure that players don't care who pays them the money.

Why would they? Is that really something you had to deliberate?

 

[BobPSU92]

He is probably thinking: "Its a s&&t-ton of money"
And he is probaly a soccer playr from Argentina, who plays in Europe (I expect).
And, if he were to think of it - which he wouldn't - he would realize none of it has anything to do with any topic at hand.

Because even though, IIRC, he has very little formal education - he is also probably not a complete imbecile.

Duh?? Red light flashes twice.

Messi plays in the U.S.

 

[Nits1989]

Aren’t 2 recent PSU football players brand ambassadors for adidas? What were they thinking?

 

[PSUFTG]

Messi plays in the U.S.

Didn't know that. Thanks.

 

[BCS PSU]

Didn't know that. Thanks.

Yes, he’s played for Inter Miami for several seasons now and won the title there last season.

 

[Kinglando is never wrong]

Nike products are made by slave labor in countries practicing genocide. Any entity affiliated with them is evil.

 

[PSUFTG]

Nike products are made by slave labor in countries practicing genocide. Any entity affiliated with them is evil.

LOL That's a classic.
What percentage of Adidas gear is made in SE Asia "slave labor" camps (as you called them)? Or just about any other apparel you might own?

So PSU is evil?

Cool though - you can pretend to be righteous, which is a plus

 

[Marshall2323]

The Adidas offer was more than Nike. Kraft is a meathead for many reasons, but this was a good decision.

Did anyone actually see competing offers?

 

[Marshall2323]

I think it's fair to say that financial decisions are kept pretty much under wraps. I do recall some discussion that trustees were not given detailed documentation. It's like the field naming rights. We were told it was the best offer. What was the process and how many other options were considered?
I'm not convinced that a fundraising effort for" Paterno Field " couldn't have generated more cash.
There is this.....given the monumental failure of Kraft's coaching search, why would anyone assume he's a wizard in other areas?
Before anyone blows a gasket, this has nothing to do with Matt Campbell. He's here because he essentially took the initiative to enquire about the job. Kraft gets zero credit for the hire.

 

[Marshall2323]

I'm not a Pat Kraft fan but I'm pretty sure that players don't care who pays them the money.

Agreed. However, I've been reading here about how PSU got this unprecedented 300 million dollar deal.....and yet in recruiting we are spending like paupers. Something doesn't add up. Players may care about the footwear which specifically for football, some feel is inferior.

 

[Bison13]

I do not know whether the deal is better or worse than what they would’ve got from Nike, but I will offer this about what I’ve seen with some high-level high school athletes.
Some of these top guys, they have a specific brand they like and some of them will go to a school based on the brand. Others will specifically ask if it is possible to work out deals beyond college with this brand so that they get in line early.

 

[PSUForever]

Let's start a thread to bash Pat Kraft yet we operating from an area of absolutely no facts or inside information just emotional disdain for the guy. Nice.

 

[Nitt1300]

Let's start a thread to bash Pat Kraft yet we operating from an area of absolutely no facts or inside information just emotional disdain for the guy. Nice.

you must be new here

 

[PSUForever]

you must be new here

Lol! No, but why should I have expected anything different.

 

[ChiTownLionPSU]

It's been reported that Nike's offer was smaller than the deal that just expired. No thanks.

Glad and grateful that another massive brand stepped in and offered a top-end deal.

 

[Nitt1300]

Transparency isn't a strength at Penn State. I think it's safe to assume that we don't know and never will know if it was a good or a bad deal.

 

[PSUFTG]

Did anyone actually see competing offers?

Of course

 

[PSUFTG]

It's been reported that Nike's offer was smaller than the deal that just expired. No thanks.

Glad and grateful that another massive brand stepped in and offered a top-end deal.

If any of that were true, that would have some relevance.

I am curious:
Aside from PK's extraordinarily exuberant proclamations (the types of nonsensical proclamations he makes about EVERYTHING - most of which anyone would know are not accurate, and would take as nothing more or less than over-the-top brags), is there anything that would make you think those statements in your post were accurate? Because I just can't figure out anywhere where you would have been left with that impression. But I obviously don't see everything that you see.

 

[BobPSU92]

Kraft:

“$400 million from Nike. $300 million from Adidas. 300 is greater than 400. I’m going with Adidas. I’m bringing more money into the school, and I’m a change agent.”

 

[Marshall2323]

Kraft:

“$400 million from Nike. $300 million from Adidas. 300 is greater than 400. I’m going with Adidas. I’m bringing more money into the school, and I’m a change agent.”

A financial partnership which will bring "excellence at the highest level."
I've heard that somewhere before.

 

[KingLando]

This is one of the dumbest things anyone has ever been angry about and that's impressive

 

[Phils rug]

Let's start a thread to bash Pat Kraft yet we operating from an area of absolutely no facts or inside information just emotional disdain for the guy. Nice.

That's kinda our thing here

 

[ChandlerPearce58]

Ah, yes! Now we have someone barking up the right tree - or at least sniffing around in the right forest. Hurray!

Let's look at a few facts:
Apparel deals - decades ago, when they first became common, were composed of two parts:
1 - Provide a bunch of gear pro-bono
2 - Maybe include a bit of cash money

Why? From the vendor's perspective, outfitting a prominent sports team with gear - gear that had the VENDORS "NIL" plastered onto it - was worth something. It gave more prominence to the vendor - essentially "advertising". Each time that client's teams took the field, thousands of folks saw the vendor's logo on display. That value to the vendor was quid pro quo-ed by giving the team free gear, and maybe a bit of $ sweetener. That is why, for example Texas got a better deal than North Texas. More folks watched Texas play - broader advertising value - than the number of folks who watched North Texas compete.

Now, what else now influences these deals?
3 - Sales of "licensed" gear (which was always a part, but now generally a MUCH more significant factor)
and, most recently:
4 - "NIL" deals

These deals between Nike/Adidas/Underarmour etc, and the teams also include licensing/royalty payments. When the deals are done, they typically include exclusive rights, to one degree of another, for the vendor to be the seller of "official" merchandise. The quid pro quo there? The vendor benefits, as all fans looking for official merchandise have to buy from them (NIke, Adidas, etc), and the team gets a cut of the sales (X% of the sales price of each official item).
In today's world that royalties amount can be a very sizable figure (look around you at a sports event and see how many fanatics are wearing "team gear" that costs them $100s, and cost the manufacturer $2 in Asian labor).
What determines how "good" the deal is for the team? Two things - how much stuff does the vendor sell (the sales volume generated on licensed merchandise) and the "X" - the percentage of those sales dollars that gets kicked back to the team. The "X" is easy enough to uncover - it is typically a flat number agreed to by both parties when consummating the deal. The sales volume? That is a different animal, but certainly from the team's standpoint you want a vendor who is "prolific" - who sells a ton of stuff in the markets in which your "fans" are buying. In the case of nearly every major college athletic program, that market is: the domestic college football market, and to a lesser degree, the domestic college basketball market. Anything else is rounding error.

"NIL" deals:
This is the new monkey in the wrench. The basic logistics are: Vendor uses some of their marketing and advertising budget to promote their gear (including gear with "officially licensed" merchandise of their stable of clients) - the quid pro quo is that the vendor uses the college teams players in that process - providing to the player some "NIL" money, and providing to the team a nice marketing pitch - "Come to our school, and you will have company(ies) willing to pay you to advertise their product and "build your brand"". Theoretically, any company could pay any athlete. Practically, companies are going to make deals with those athletes who are a part of their "stable" - part of the group of programs that they have merchandise deals with.


And now, you can see why you are sniffing in the right forest. I hope.

Which vendors can yield the highest royalty payments to the team?
Obviously, those with a dominating presence in the domestic college football market (and a bit of weight to the domestic college basketball market).

Which vendors can yield the highest "NIL" marketing benefits to the school (and the individual players)? Those with the highest advertising presence and "Q Value", if you will, and the largest advertising/marketing budgets - in the relevant markets.

Is the picture becoming clearer? Keep in mind, the "values" of the royalty part, and the "NIL" part are typically not contracted at "X" dollars - because the components of those values are not static.

Now, lets look at the two companies in question - Nike and Adidas:

1 - Within rounding error, Nike's annual sales are twice that of Adidas. But that is just the start.
2 - As you mentioned, of their sales, a far larger portion of Adidas is driven by soccer (fine for them, but there is essentially ZERO "soccer market" domestically for college programs. Ask any sports fan to name 5 top players in college soccer - or even 5 top teams in college soccer. Good luck). So that relevant part of Adidas' market - which started out at 1/2 of Nike's - is even "more smaller" in any market that PSU (or any other similar program) cares about
3 - Further - Adidas' market is skewed towards Europe, South America, and East Asia - far more so than Nike. Not a surprise - Adidas is a Euro company focused on soccer. Nike is a US company focused on Football and Basketball

So, to what degree can/will a deal be able to be mutually beneficial to PSU?

Put that all together, and a smaller and less prominent company (Adidas), whose "prominence" is skewed towards a market type that is irrelevant to college programs (Soccer), and whose demographic market type is skewed to regions that are irrelevant to college programs (Euro, South America, East Asia), and you have a whole confluence of factors that make vendor A (Nike) far better positioned to be of value to a USA college athletics program.
These factors, which are generally not contractually defined (not laid out in specific hard dollar contract terms - they really can't be) have HUGE implications in the era of NIL.
PSU just decided to go with a vendor B that will be operating (and therefore PSU operating) with one hand tied behind their back (maybe both hands).

That is, unless you believe the "stories" that came out from PSU athletics in conjunction with the deal being announced - that PSU was going to receive tens of millions of "NIL" money per year (as part of this "$300 Million deal") to buy CHAMPIONSHIP rosters for its sports programs. If you believe that, good luck.

Anyway, fan(atics) are free to believe whatever they want. They are free to "love" a deal simply because they want three stripes on their gear instead of a swoosh (or vice versa), they are free to "hate" (or love) one vendor because of where they are located. They are free and of no obligation to consider ANYTHING. It is not their duty to care.

But there WILL be implications for their favorite sports program. No doubt about that.
Generally, fan(atics) will never know what those implications are- not when the target program involved is PSU. Why not? Because PSU has a uniquely non-transparent way of conducting its business, and a unique level of non-righteousness in their history of "what they say" vs "the full truth".

Enough said. People can recognize common sense (and also know that there will be limits to their understanding - either because they don't really care all that much, or because getting full and accurate information is not possible for them).
Or they can choose to just wave the pom-poms, have a drink, and enjoy the game - win or lose. That may be the best option for most people.

I am honestly surprised by this thread.
We have many experts on this board...you know..."x" as something you get rid of ...and spirt, that last squirt of fluid when you tinkle.
There are many big corporations which change directions....many quite larger than PSU.
Tying any financial decision to a singular reasoning is foolish....as many times in my professional career we have taken a step back to obtain a better positioning for the future.
PSU was no longer the top brand for Nike...common knowledge...and not all contractual details are made public.
Seems to be hasty to insinuate the logic to change within an initial financial quarter as premature.

 

[Catch1lion]

PK’s Ouija board worked . The brand with the 3 stripes is thumping Nike.

NKE Stock Falls 4% to 12-Year Low: 3 Reasons Behind the Nike Crash

Nike stock fell below $40 to its lowest level since 2014, extending its 2026 decline to 38% and leaving NKE nearly 78% below its 2021 record high.

coinpaper.com

 

[PSUFTG]

I am honestly surprised by this thread.
We have many experts on this board...you know..."x" as something you get rid of ...and spirt, that last squirt of fluid when you tinkle.
There are many big corporations which change directions....many quite larger than PSU.
Tying any financial decision to a singular reasoning is foolish....as many times in my professional career we have taken a step back to obtain a better positioning for the future.
PSU was no longer the top brand for Nike...common knowledge...and not all contractual details are made public.
Seems to be hasty to insinuate the logic to change within an initial financial quarter as premature.

Wut??

 

[RolexKong]

PK’s Ouija board worked . The brand with the 3 stripes is thumping Nike.

NKE Stock Falls 4% to 12-Year Low: 3 Reasons Behind the Nike Crash

Nike stock fell below $40 to its lowest level since 2014, extending its 2026 decline to 38% and leaving NKE nearly 78% below its 2021 record high.

coinpaper.com

So Nike intended to pay all or part of its offer to Penn State in Nike stock? Who knew? Maybe Kraft ought to take a turn at managing Penn State's endowment.

FWIW, Nike's earnings and cash flow are roughly 4.5 to 5 times those of Adidas.

 

[Catch1lion]

So Nike intended to pay all or part of its offer to Penn State in Nike stock? Who knew? Maybe Kraft ought to take a turn at managing Penn State's endowment.

FWIW, Nike's earnings and cash flow are roughly 4.5 to 5 times those of Adidas.

Pepsi it’s tongue in cheek .

 

[Navion N8865H]

NKE stock chart - 5 years

 

[LMTLION]

PK’s Ouija board worked . The brand with the 3 stripes is thumping Nike.

NKE Stock Falls 4% to 12-Year Low: 3 Reasons Behind the Nike Crash

Nike stock fell below $40 to its lowest level since 2014, extending its 2026 decline to 38% and leaving NKE nearly 78% below its 2021 record high.

coinpaper.com

That’s actually shocking. I just invest in index funds and don’t often follow individual stocks. I had no idea Nike is doing that poorly. It’s surprising because I have kids and Nike still does seem to be the premium brand for teenagers.

 

[Navion N8865H]

That’s actually shocking. I just invest in index funds and don’t often follow individual stocks. I had no idea Nike is doing that poorly. It’s surprising because I have kids and Nike still does seem to be the premium brand for teenagers.

With the stock in the 39 range, NKE yield is around 4%. Some financial articles starting to drop hints they may have to cut the dividend. The payout ratio is around 78% now.

 

[Wilbury]

I am honestly surprised by this thread.
We have many experts on this board...you know..."x" as something you get rid of ...and spirt, that last squirt of fluid when you tinkle.
There are many big corporations which change directions....many quite larger than PSU.
Tying any financial decision to a singular reasoning is foolish....as many times in my professional career we have taken a step back to obtain a better positioning for the future.
PSU was no longer the top brand for Nike...common knowledge...and not all contractual details are made public.
Seems to be hasty to insinuate the logic to change within an initial financial quarter as premature.

Nothing surprising about this thread - look who created it. And is now posting under his other username so he can pat himself on the back.

 

[Marshall2323]

So PSU is doing better than Texas, Ohio State, Georgia, Oregon, Alabama, LSU, and Michigan?

Awesome!