Adidas’ newly announced $300 million partnership with Penn State University has quickly turned controversial, with trustees alleging exclusion from the negotiation process and questioning executive perks within the landmark deal.
Adidas’ newly announced 10-year partnership with Penn State University is valued at around $300 million (€277 million) in cash, merchandise, and NIL funding. The deal, which takes effect in July 2026, ends Nike’s three-decade tenure as Penn State’s apparel and footwear partner — and makes Adidas the official supplier across the university’s 31 varsity teams.
The agreement was described by both sides as “transformational”, with Penn State’s Vice President for Intercollegiate Athletics, Pat Kraft, calling it a landmark contract that would “set a new industry standard” for its integration of Name, Image and Likeness (NIL) initiatives. Adidas and the university emphasized that the partnership would prioritize high-impact NIL campaigns and brand collaborations across sports.
Reports: Nike offered over $30 million in upfront cash and Adidas contract includes a controversial clause
However, reports from Front Office Sports and U.S. media outlets suggest that the contract’s negotiation process has sparked outrage among several university trustees, who claim they were excluded from reviewing full details of competing offers. Although the board has no direct voting authority over athletic deals, members reportedly argued that they have a legal right to access the documents.
The reports allege that Nike had offered over $30 million in upfront cash, and that the Adidas contract includes a controversial clause granting Kraft an annual $500,000 (€460,000) product allotment starting in 2027 — separate from the athletics department’s existing $8 million merchandise allocation. Trustees are also said to be concerned about Kraft’s close personal ties to Chris McGuire, an Adidas marketing executive involved in negotiating the deal.
The university’s Board of Trustees leadership pushed back against what they called “rumors and misinformation.” In a joint statement, Chairman David Kleppinger and Vice Chairman Rick Sokolov said the Adidas contract followed a “value-driven review of competing proposals” and denied any wrongdoing.
Yet the situation escalated within a day when Penn State announced the dismissal of longtime head football coach James Franklin, following a string of losses in the Big Ten conference. His departure triggers a buyout of over $49 million (€45 million) — one of the largest in college sports history — further fueling criticism amid what many see as questionable spending decisions.
The deal was designed to strengthen Adidas’ presence in US college sports
Faculty and staff have publicly expressed frustration over the timing of these developments, particularly as the university is also closing seven regional campuses and proceeding with $700 million (€645 million) in renovations at Beaver Stadium. The uproar was compounded by last month’s 47 percent pay raise for university president Neeli Bendapudi, placing her among the highest-paid public university executives in the U.S.
For Adidas, the Penn State deal was designed to strengthen its foothold in US college athletics — a category dominated by Nike and Under Armour. The partnership’s early turbulence, however, highlights how U.S. college sports sponsorships have become increasingly complex, with NIL funding, transparency, and governance issues now integral to brand strategy and reputation management.
This text is based on information from SGI News in the US
