USATF - Nike Deal I'd Like to Hear from People Who Think It's a Good Deal

We've got 2 articles on the homepage from 2 people who believe the Nike-USATF deal is not a good one. One from former USATF CEO Doug Logan

http://speedendurance.com/2014/05/01/shin-splints-2014-future-shock/

and one from David Greifinger USATF's Former Counsel to the board

http://trackandfieldnews.com/index.php?option=com_content&view=article&id=1899

We also had this thread on LRC

http://www.letsrun.com/forum/flat_read.php?thread=5743718

discussing the NPV of the deal and it wasn't that incredible.

I'd like to hear from those of you who think the deal is a good one and why. Either post away or email me

wejo@letsrun.com

if you want it published on LetsRun.com.

One more I didn't realize.

1) The deal also gives USATF exclusivity to being the provider of USATF's running routes.

Also, David Greifinger indicated he thought the deal would only be good for USATF if there was low inflation or deflation. I just assumed in deals like this over 26 years there are out clauses and indexes for inflation/deflation. Otherwise it's really just a bet on future economic assumptions.

Two more questions.

1) Does the USATF board have to approve this?

2) Does the USOC have to approve it?

We don't know the details of the deal? USATF could have out clauses. If USATF and Nike signed a deal for 26 years with no out clauses/indexes for inflation my assumption would be Nike got the best of it. Personally, I don't see the need for a deal 26 years into the future for a non-profit like USATF. Am I crazy to think there are out clauses for USATF and/or Nike?

Why not just sign a 10 year deal but bring some competition into the mix when you negotiate it.

Good question. Before jumping to any conclusions about whether this is a good or a bad deal, we'd need to first answer a lot of unknowns. Until we actually see the deal and know more about Nike and USATF's respective plans, I don't think we can draw any solid conclusions. You pointed out the possibility of escalators, opt-outs, early terminations, etc., in the deal. Those would have a huge impact, obviously. Other unknowns that would have a big impact:

* To what extent did USATF try to solicit other offers before signing this deal, if even through back channel ways? Personally, I don't think any other company would pay anywhere close to what Nike is in the near-term to sponsor USATF, and has probably been over-paying for years now (thanks to Phil Knight's personal interest in the sport). Nevertheless, we can really only assess the deal if we know what others would be winning to pony up, and how valuable the length of the term was to Nike.

* Does this deal mean Nike is going to make a big push to develop T&F in this country? IF Nike were considering making a big (additional) investment into developing T&F in the US, I could see them wanting a guarantee before making further investments that the Swoosh is going to be on national team singlets for a long long time. Total speculation, of course. But if this deal was the necessary condition to a much broader investment by Nike to advance the sport in the US, it could be a good thing.

* What other plans does USATF have cooking? IF (and again, BIG IF)USATF has some good, big ideas they want to get off the ground, having a locked-in revenue stream until 2040 should open up some capitalization options now.

USATF - Nike Deal I'd Like to Hear from People Who Think It's a Good Deal

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