In July 2015, Indiana University signed an extension through 2024 with apparel giant Adidas for a total of $53.6 million, or about $6.7 million per year. At the time, this was one of the top five largest college apparel and shoe deals ever. The lucrative extension affirmed the power of IU’s brand and their legacy as a blueblood in the world of college athletics.

Indiana’s contract was also the result of great timing. IU’s previous deal was up on the heels of Adidas losing powerhouse contracts with Tennessee and Michigan, as both jumped to Nike. As a result, Adidas was heavily incentivized to keep up in the college apparel arms race by not losing another major brand. Thus, Indiana was the beneficiary of what at the time was considered a dream deal. While other apparel and footwear deals in recent years have since eclipsed Indiana’s contract, the Hoosiers agreement with Adidas still remains one of the most lucrative in the country.

Beyond the eye-catching compensation numbers, most aren’t aware of the quirky and interesting clauses that can make up a college apparel deal. So, let’s strip away the legal-ese and take a closer look at Indiana University’s contract with Adidas.

IndianaHQ obtained the deal as a result of a public records request.

1. Different Types of Compensation

While the total value of the contract is widely disseminated to the public, the actual breakdown of the compensation is often overlooked. Typically, in apparel deals like Indiana’s, compensation will come in a variety of forms, including (1) base compensation payments, (2) actual product and merchandise, (3) marketing support, and (4) incentives.

In the deal, Adidas pays Indiana a base compensation payment each year, ranging from between $1.425 million to $1.65 million. Then, Adidas additionally provides a hefty amount of the company’s products for university student-athletes and coaches/staff. Under the agreement, Adidas supplies between $3.6 million to $3.95 million per year in Adidas products. These are supplied at no cost to the University and delivered free of charge. Accompanying the apparel, Adidas provides a $200,000 additional merchandise allotment per year. Along with the merchandise comes a stipulation that Indiana must wear its alternate basketball and alternate football uniform at least once per season. The third form of payment comes as marketing support. Adidas pays Indiana $300,000 per year that is earmarked for “mutually agreed upon” marketing activities that are intended to boost game attendance and increase ticket sales. However, Indiana does have the option to reclassify this payment to be used for products/merchandise, if the University so chooses.

Finally, the agreement also includes several performance incentives that Indiana can meet to increase their compensation. These incentives cover both men’s and women’s sports.

Incentives include:

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– $500,000 for winning the College Football National Championship

– $250,000 for winning the College Basketball National Championship

– $50,000 for winning the Women’s College Basketball National Championship

– $50,000 for winning a National Championship in the Olympic sports

– $50,000 for winning the Big Ten conference in football or basketball

– $150,000 for being named College Football Coach of the Year and $75,000 for being named Big Ten Football Coach of the Year

– $100,000 for being named College Basketball Coach of the Year and $50,000 for being named Big Ten Basketball Coach of the Year

– $50,000 per being named Women’s College Basketball Coach of the Year and $35,000 for being named Big Ten Women’s College Basketball Coach of the Year

2. Severe Penalties for NCAA Infractions

Under the contract, if IU is placed on probation by the NCAA and that probation results in a loss of televised basketball or football games, Adidas has the right to reduce their base compensation by one half. Thus, this would be a loss of between $700,000 and $825,000 per year during the probation.

There is also a bit of an odd clause that says that if Indiana is “no longer part of the Power 5 (or its successor)” then Adidas has the right to “equitably reduce” the base compensation payments for loss of exposure. This line in the agreement may seem very peculiar from an outsiders’ perspective and, I’m sure as you are reading this, you are probably thinking why would Indiana ever leave the Big Ten? And, if the Big Ten ever broke off from the NCAA to form a new collegiate sports platform, this reduction likely would not apply because that new platform would be considered a “successor” to the Big Ten.