Ohio State agrees to 10-year, $97 million apparel, retail deal
Published: Thursday, November 15, 2012
Updated: Thursday, November 15, 2012 12:11
Ohio State has agreed to a 10-year, $97 million deal with two apparel and retail businesses, J. America and Fanatics Inc.
The companies will pay $23 million upfront for exclusive rights to design, marketing, production, retail as well as distribution of all apparel, according to a Thursday university press release.
“This new partnership enables the university to protect and enhance the royalty revenues that support student success, continue its commitment to growing business in Ohio, and demonstrate leadership in socially responsible business practices,” said Jeff Kaplan, senior vice president and executive officer to the president.
The deal with Fanatics, a Jacksonville, Fla.-based apparel and retail company, covers the production, marketing and design aspects as well as the distribution of all apparel categories with the exception of officially licensed OSU apparel made by Nike. Fanatics’ guarantee for retail is $12 million over 10 years.
J. America, based in Webberville, Mich., and already an OSU apparel licensee, agreed to bring the university $85 million over 10 years through apparel production and distribution.
Revenue generated from the deal will continue to support OSU’s ability to provide scholarships, assist student-athletes through partial grant in aid scholarships and create a Student Life endowment for 1,000 student organizations on campus, among other benefits.
The press release also noted the joint agreement will help the university bring in $4.5 million annually in royalties set to “help Ohio State reinvest in the university.”
Though the deal was announced Thursday, changes are set to take effect next year.
Through the two companies, OSU will continue to engage Ohio businesses as sub-licensees, suppliers, embroiderers and screen printers, according to the release.
United Students Against Sweatshops had repeatedly staged demonstrations and protests in recent months over OSU’s consideration of an exclusive apparel contract with Dallas Cowboys’ Silver Star Merchandising, a company accused of using sweatshop labor to produce their apparel. Thursday's announcement means Silver Star did not get the deal, but workers rights were addressed in the release.
“The new apparel model increases the university’s leverage to protect the rights of workers who are involved in the production of licensed apparel,” Kaplan said. “We will significantly decrease the number of factories we need to monitor for human rights issues from more than 800 to fewer than 20, making it easier to enforce compliance with Ohio State’s code of conduct.”
Kaplan also said OSU will partner with Verité for assistance with factory monitoring protocols, developing performance measures that align with OSU’s existing code of conduct and creating a framework for ongoing campus community involvement. Meetings with students concerned about labor issues helped shape the social responsibility program, according to the release.