Pros, Cons of Negotiating an Exclusive Apparel Agreement

One of the most time-intensive jobs of a high school athletic director is to work with coaches and sponsors to procure uniforms, equipment and coaching gear. As most athletic directors know, the cost of these items can be quite high, and limited building or district funds can impact the ability to purchase the desired items.

Schools often require additional funding from fundraisers in order to meet the financial threshold necessary to purchase these “needs.” Pursuing “wants” is typically not an option. One way that schools and multi-school districts have been able to meet their “needs” and even “wants” is by entering exclusive agreements with sporting goods companies and major brands.

Schools or school districts contemplating an exclusive apparel agreement must consider the pros and cons and be prepared to provide information for decision-makers and stakeholders. The schools or district must also have a strategy relating to the consideration of such agreements, and what questions need to be answered while pursuing such agreements.

Cons

Existing Relationships
In schools with 20-plus head coaches, both new and veteran, chances are there are already relationships built between the coach and a sporting goods/uniform vendor representative. Also, those relationships are likely long-standing and have proven to be effective and meaningful. The representative may have been very responsive to urgent needs and has gone the “extra mile” to ensure a coach, player or team has what they need. This goodwill is critical to both parties and the school. After all, many athletic directors are even willing to pay higher product costs because the trust level is so high with the representative. The possibility of the demise of this type of relationship, by entering an exclusive arrangement, can be disconcerting and must be considered.

Brand Loyalty
Some coaches simply want a particular brand due to superstition, a history of success, the longevity of the product or pure preference. Most athletic directors are aware of this and know that having an exclusive agreement with a brand that any coach does not prefer, runs the chance of creating low or no support for the agreement.

Aversion to “One Brand Fits All” for a School in a Multi-High School District
“We’ve been buying from ‘Chet’s Sporting Goods’ for 40 years! Chet graduated from our high school, and his kids went here. He’s been a loyal booster and has donated money to us. We are not going to leave him hanging!” This represents the uniqueness of high school sports and certainly is a legitimate concern. If Chet sells Brand A only, and the school has successfully used Brand A for 40 years, who can blame the parties for mutual loyalty? It matters not that a sister high school just buys the low-bid apparel; schools want the option to build meaningful relationships that are reliable over time with community stakeholders.

Pros

Reduced Prices
Most agreements allow for significant discounts to be extended to the school, school district or both, most times up to 40 percent off retail. This amount is significant for schools and allows for a school’s funds to be further stretched to provide more for less. Considering the cost of outfitting 100 football players with football equipment and uniforms, a 40 percent discount could yield savings in the thousands of dollars, which is significant.

Upfront Money and Rebates
Typically, exclusive agreements allow for other incentives, including a percentage of sales being returned to the school, school district or both in the form of rebate money and an amount of “upfront” money that is a form of credit to be used for a variety of equipment, uniform styles and apparel. In multi-school districts, over the lifespan of the contract (typically 4-5 years) total incentives between upfront money and rebates can be in excess of $100,000. This all represents “free” money that otherwise would not have been made possible for the school or school district to use without the exclusive agreement.

Considerations When Pursuing an Exclusive Agreement

When considering whether to pursue either an exclusive school-wide or district-wide agreement, gathering input from all stakeholders is not only key, but essential to determine the best fit. Once an agreement has been signed, many people will be impacted. Student-athletes will have access to uniforms and equipment, community members and parents will have access to various ways to secure spirit wear, and coaches and staff will have a larger pool of apparel to showcase their school spirit and pride in programs. Because a district deal impacts so many people, athletic directors must collect input.

This may be as simple as surveying coaches to inquire what their priorities are regarding equipment, uniform and spirit wear offerings, or it could be a committee of the interested parties listed above; however, there MUST be input. Considerations should be centered around preference for equipment quality, features and even customization. The brand is only one factor and should not be the only factor when considering an agreement.

As indicated previously, it will be difficult to meet all coaches’ favorite or preferred brands when selecting one brand to build the agreement around. This is not a negative factor, but rather an opportunity to maximize your school or school district’s brand. By allowing your athletic programs to be under one brand, you strengthen that brand and further allow your stakeholders to have a simpler experience following and interacting with that brand. It also looks and feels extremely professional while taking school spirit and pride to an all new level.

Questions to Consider While Pursuing an Agreement

The questions (a start – many more will come to mind) below should be considered when the decision is made to pursue an exclusive agreement. These are not comprehensive. There will be others when a group is convened to consider pursuing an agreement.

• What are the uniform needs, and how often will the replacement uniforms be necessary?

• How will the upfront and rebate money be used?

• Does the current budget meet the needs of the uniform and equipment replacement cycle?

• How will spirit wear be offered to stakeholders - will it be program-by-program, school/district-wide, or a combination?

• Will the agreement apply to game-day apparel only, or will it apply to practice gear?

• Will the agreement apply to shoes and other footwear?

• What happens if a school or team violates the agreement?

All of these questions are important to consider when partnering with stakeholders involved in the process.

Though a significant potential financial upside clearly exists with an exclusive apparel agreement, it also presents many challenges. Each school and school district has unique needs. The decision to enter into an exclusive agreement should not be taken lightly; however, schools and school districts do have a unique opportunity with an exclusive agreement – the ability to leverage their spending power.

Conduct research on exclusive agreements, seek input from stakeholders, analyze the needs of your school and school district, and determine what partnership is best. There are many organizations waiting for the opportunity to serve and partner with schools. It is incumbent on the athletic director to consider this financial option to bridge the money gap faced by schools and school districts.

In the end, this is a leadership test for the school or district athletic director. There will never be a 100 percent consensus on this topic for the myriad of reasons already articulated. However, if the athletic director believes the pursuit of an exclusive apparel/ equipment agreement is the right thing for the community and stakeholders, it is the duty of the athletic director to pursue execution of such an agreement. This is an effective alternative that help schools or school districts to save money and use funds much more efficiently, and in the end, will make it a bit easier for many in the community to participate in high school sports and activities.