University of Kentucky Athletics has renewed and expanded its long-term partnership with Fanatics, extending the agreement through 2038.
Fanatics Licensing Management, which has served as the University’s trademark licensing representative for more than a decade, will continue to oversee the core of the school’s merchandising, including the operation of the UK Team Shop and distribution of licensed apparel through major retailers such as Kroger, Walmart, and Dick’s Sporting Goods.
Fanatics will continue to operate the core of Kentucky’s merchandising business, operating the UK Team Shop and serving as the primary apparel licensee partner, distributing team merchandise across major retailers, including Kroger, Walmart, and Dick’s Sporting Goods, among others.
The more notable shift, however, comes in the NIL space.
As part of the expanded agreement, in a first-of-its-kind agreement, Fanatics is making a “significant” commitment to NIL initiatives for select athletes across all programs and teams, with more high-major schools to follow.
Beginning this spring, Fanatics will roll out a two-pronged marketing strategy for select student-athletes.
UK student-athletes will have the opportunity to launch and curate their own personalized storefronts with team gear they select, fostering a connection with fans who want to support both the individual athlete and the program. In addition, through a more traditional marketing approach, student-athletes will be commissioned to promote product collections across digital e-commerce platforms and brick-and-mortar retail partners.
“NIL in its truest form”, one representative told Kentucky Insider. “Driving retail sales so student-athletes can benefit.”
It goes without saying that this is an opt-in agreement, allowing student-athletes to still pursue NIL deals with third-party merchandisers — such as local brand Kentucky Branded — if they choose. However, a partnership with Fanatics gives athletes the ability to pair their personal brand with official Kentucky branding, which can significantly increase sales potential, and is an option many third-party merchandisers avoid due to the cost of UK marks.
As Kentucky looks to recruit the top athletes, this is also a way to provide above the cap NIL dollars, money exceeding the school’s annual revenue-sharing cap, to build NIL competitive compensation packages. While specific percentage splits are not available, it will be a beneficial figure for the athletes.
“We’re not going to enter into deals that are going to prevent us from being competitive and competing for players on the open market,” a spokesperson said.
On one hand, an athlete’s NIL compensation package can include a projected range of money, incentivized by performance and connection to the fanbase. On the other hand, or in addition to, there can be a set amount of compensation for product promotion.
Given the turbulent landscape of collegiate athletics, it’s important to note that the long-term deal is also designed with flexibility in mind. No numbers are fixed, meaning that figures and percentages will change and incentivize growth.
Furthermore, a lot of this strategy is built post-House settlement, which requires NIL deals to be legitimate business transactions rather than pay-for-play, with the NCAA auditing giant Deloitte hired to vet deals. To be able to lean into an industry leader like Fanatics in that regard is an advantage for the University.
How do we get the best players to want to play for our teams?
That is a question Kentucky Athletics continuously asks itself when evaluating, and that served as a basis for this extended partnership. Extending an already strong relationship, UK has added a sustainable way to deliver legitimate NIL compensation above revenue-sharing limits for years to come, all through one of the largest and most established merchandisers in sports.
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