JACK SWARBRICK KEVIN PLANK

Transcription

1 January 21, 2014 An Interview With: JACK SWARBRICK KEVIN PLANK JACK SWARBRICK: Thanks to all of you for being here. Thanks especially to Kevin Plank and the members of his team from Under Armour for being here today. Our purpose is, of course, to confirm what has already been reported in many circles, and that is at the expiration of our current apparel deal, University of Notre Dame will partner with Under Armour. We couldn't be more excited about this opportunity, and by any measure, it's the largest deal of its kind in the history of collegiate athletics. It's 10 years in term. It applies to all of our teams and all of our programs, and it carries a very unique feature, which represents the depth and level of commitment, and that is of the cash component of this, which is the largest any school has had. The merchandise component is also the largest any school has ever had. But of that cash component, at Notre Dame's option, we can take a portion of it in Under Armour stock. Again, an opportunity to reflect our belief that we can help build Under Armour, continue the rocket ride it's on, and Under Armour's belief that they can have a major impact on the University of Notre Dame. To quote the great American philosophy Ferris Bueller, "Life moves very fast, and you'd better be careful or you'll miss it." That has never been more true in my view of our industry than it is today. What is ahead of us in college sports is a period of change unlike any of us have ever lived through or had to try and navigate. In recent years here at the University of Notre Dame, we have focused on building the platform, the foundation to navigate that sea change. It involved, of course, the BCS restructuring into the College Football Playoff, navigating conference realignment, and getting ourselves in league with what we think is the best conference in the country, the ACC; developing the future football schedules so that our commitment to independence, our commitment to being national, and our commitment to playing at the highest level could be demonstrated in a very specific way; and getting the media foundation in place; continuing our extraordinary partnership with NBC/Comcast; and building in the past two years Fighting Irish Digital Media, a critical piece of our foundation for the future. But the ability to build off that base and navigate the future depends on four things: It depends on a very strong identity, an identity that allows you to separate yourself from the clutter; Resources: We will continue to be great stewards of our resources. We will continue to be a University that doesn't spend at the top echelon of our business, but you need resources to compete and to compete effectively, and we'll do what we need to do to make sure our student athletes and coaches have those resources; You need committed partners who share your vision, and you need a competitive edge. Since we believe that those are the foundational elements, the critical tasks of our future, when we embarked on this process to pick our partner in this critical area, those were our four primary criteria. No one could meet those criteria in anything approaching the way that Under Armour has. Strong identity: Under Armour has built a brand which in recent years has become more present more quickly in more segments of our population than anything I've seen. It was interesting for me to travel this month, and I've done a lot of it, and in every airport and at every venue I went to, Under Armour is there. Its ability leveraging its brand in combination with our brand is critical to us keeping J. Swarbrick, K. Plank

2 Notre Dame positioned at a different level, at a level where our identity remains unique in the collegiate market landscape. Resources: I've already said this is the largest deal of its kind in the history of collegiate athletics. It reflects a belief in each other, but it also reflects a belief that in order to achieve the things we want to achieve, we need those resources. For us to be hoisting National Championship trophies in Under Armour gear takes resources, and Under Armour understands that. And on an apparel front, an equipment front, a cash front, they're prepared to make that available to us. Committed partners who share our vision: The deal reflects the commitment, but it is really the sense of how this partnership would knit together at the end of the day that was for me the most deciding factor. Notre Dame is rich in tradition. What we are not as rich in is an entrepreneurial culture. For us to marry our tradition with one of the great entrepreneurial stories in recent time in this country is exciting for me. I think that we will impact our culture in direct ways, make us more creative, inventive, allow us to move more quickly and to be fundamentally entrepreneurial. And finally, the fourth factor in navigating that future is obtaining a competitive edge. I think in the hyper-competitive world in which our student athletes compete, the next decade of success beyond great coaches and great facilities is going to be driven by science, the science of nutrition, medical science, strength conditioning, data management, all of those things that turn a fourth-place finish one-thousandth a second later into a first-place finish. We have been so impressed with Under Armour's commitment to technology. They started as a performance company with a unique technology component, and they've never lost touch with that. So when you watch those speed skaters skate to gold in the Olympics in Sochi, or as you watched Auburn in the National Championship contest in football, think about the technology that goes into driving that success, because that was a big part of what we're excited about, and it's the ability to be a partner in developing future technology. We want Notre Dame, our coaches and our student athletes, to be an Under Armour laboratory, a proving ground for new technologies. We're committed to helping them do that, and they're committed to using us for that purpose. Those four things were our focus throughout this process, and Under Armour hit every one of them on the nose. Now, in noting how perfect we think the fit is with Under Armour and as we head to a transition, I also want to thank Adidas, a great partner for many years who contributed to the growth of this athletics department and helped make us better. Our movement to a new time, a new generation for Notre Dame athletics is just that; focused on the future. It is not focused on the past or any shortcomings of it. As I said, on the contrary, it has been fantastic. But as I challenge our student athletes and our coaches to get even better, we had to find a partner to help you do that, and in Kevin Plank and the remarkable team he has assembled and the company he has built, I'm certain we have. So it's a great honor for me on behalf of Father Jenkins and the University of Notre Dame to introduce our new partner, Under Armour and Kevin Plank. KEVIN PLANK: Thank you so much, and good morning, everyone. This is a pinch-me moment for me without question. I would just like to, first off, just begin by thanking you, Jack, and the vision that you showed through this process and giving this opportunity, and on behalf of the more than 7,000 teammates that I have at Under Armour, just explaining to the entire Irish community what a big deal this is for us and how excited we are about taking this on. I'd also like to thank Father Jenkins and John Affleck-Graves amongst others and the entire Irish community for welcoming Under Armour into your Notre Dame family. We're going to run hard and we're going to do a good job for you. Partnering with one of the world's most respected and admired universities, it's really a game-changing event for our company. It puts us on a completely different level, and frankly we are ready for that level. This being our 13th deal, we've done this before, but we know which direction we're going in, and we think this we have an understanding of what this University needs and the role that we can play to making it more successful. We've got our work cut out for us because this is going to happen very quickly. We look at Under Armour and we think about our company's J. Swarbrick, K. Plank

3 journey as a story. With this groundbreaking partnership that we're just embarking on, we've started a very important new chapter in that story for our company. Our investment reflects, first and foremost, the belief that we have in the Fighting Irish's global significance in the cultural landscape and our dedication to the next generation of athletes. What makes this special, though, is that it marks the beginning of a shared journey with the Notre Dame administration, everyone in the athletic department, the coaching staff, the student athletes themselves, the alumni, and that incredibly powerful fan base. I've gotten so many s on this thing, it's been incredible, and I've not been able to respond until we made it official, but the ink is still a little bit wet, but it's official, and we can now be very excited about this. But at the core relationship that we have are the common goals that we have to empower student athletes and to give them that little bit of an edge that they need in order to perform and compete. But with our proven technology, our proven innovation, and most importantly I believe our incredible passion that we have, the passion that we have to simply make athletes better. You know, this community, this school, this University has a championship pedigree second to none that goes back to the 19th century, and our job is to ensure that we uphold that legacy and move it forward. We're also incredibly excited about the collaboration that's going to lead to a new era in the look and feel of the Fighting Irish brand. We believe there's an opportunity to present a cohesive design story across all of the programs of Irish athletics, and that story is going to come to life when the athletic season kicks off this summer and we begin to outfit and present the new uniforms. These are only mocks. These aren't the real ones yet, so give us a chance to do that and do that the right way. First and foremost, a look and feel that will honor the rich tradition and history of Notre Dame, and put very simply, we want people to know we're looking for clean, bold and consistent looks, and I think there's a great history of that here already, so I don't think we have to do anything out there. As we do that, I've got a jersey that I'd like to present to Jack in a minute, but first just a personal story about being back here, back on this campus and what this means to me. My first time on this campus was all the way back in 1997, and some perspective of someone who grew up a Notre Dame fan with a Sports Illustrated centerfold of Mike Stonebreaker on a goal-line stand versus the University of Southern California Trojans right above my bed and looking at that every night, going to college and waiting for the phone to ring and the Irish never called, I'm thrilled to be here today and to have that opportunity to be a part and to wear the Notre Dame brand, as well. So moving up to 1997, the first team that we outfitted at Under Armour was Georgia Tech, and if you remember '97 was the rededication game that you played versus Georgia Tech. The opening game was September 6th. Georgia Tech being our team and coming to the game, I had the opportunity to go to Notre Dame, and so the equipment staff invited me to come. So I got in my Ford Explorer and I drove from Washington, D.C., to South Bend, and a hotel room wasn't an option on opening game weekend. So sleeping in the visiting team locker room was where we ended up staying for that night. I've seen the movie "Rudy" and I know you don't prefer people sleeping in your locker rooms, but it worked out okay for me that night, and I got a sense of what it meant. Looking back on the history of our brand, in 1997 we did $110,000 in revenues, and looking and thinking for me at this pinch-me moment of the ability to reflect on what's happened over the last 16 or 17 years, since that day, first we live in an incredible country, and it's one of those only-in-america things where you can't even afford a hotel room, and to be here to have the opportunity to outfit this, first and foremost, it's because of the incredible team that we've put together at Under Armour that has us in this position to outfit this University and student athletes with products second to none of anyone in the world. We are going to compete and we are going to run like crazy for the University of Notre Dame, and we are absolutely humbled, honored, privileged and thrilled all at the same time to take this on. So within that, today is a good day. Today is a good day. I appreciate all the welcomeness, and frankly all the openness that we've had since word of this has started to leak out. In any event we're thrilled, and if I could, Jack, I'd love to present you with a ceremonial jersey that is not the J. Swarbrick, K. Plank

4 actual one but gives you an indication of how we're thinking. Q. You touched on this a little bit, Kevin, but with respect to the football uniform, can you talk about your intention in terms of keeping the classic look, what you guys are willing to do or not willing to do? And Jack, how important that was to the discussion, what that looks like? KEVIN PLANK: You know, the break of the term of this deal was a little unusual. We've actually done it a couple years ago with Northwestern, so ending a contract in January and finding out now, to be uniform ready in time for August or September when the season kicks off beginning with football and the balance of the teams, all the fall sports that we have, that's a tight time frame. We have been working on this for frankly years, and so we have a pretty consistent idea, and the first thing that I think I've learned along the way is listening more than you talk, and so we have some listening to do. We're not anticipating doing anything unusual, crazy. We need to honor and respect the history of the University. We believe that less is more, particularly in the early days, and as we get comfortable and I think as our team and our team of designers and our innovation teams, as we get comfortable first and foremost, these uniforms will be reflective of the latest and greatest technology we have. Now, the look and the esthetic of them is something that will be pretty consistent, and I don't think any one will be tweeting photos. We're going to stay pretty consistent in year one to get things going. JACK SWARBRICK: I suppose the short answer is to say that I so enjoy the mail I get each week after the Shamrock Series game that there's little chance that I would extend any more of that. You know, I think the thing that's most important to me relative to that question is we didn't talk about it for a long time in our discussions. What we talked about was your approach to the partnership. What are your goals? What are you trying to do? And as Under Armour talked to us about the importance of Notre Dame tradition, about using that to be the foundation of what we built as we move into higher performance areas, that was what gave me the greatest comfort. Now, we did go into the specifics, and of course talk about those questions, and they offered a pretty compelling example. If there's a school that changes its uniforms less than we do, it's Auburn. They don't make any modifications to their uniform, and Under Armour has been very comfortable with that, has been a great partner with them and obviously this year proved they can be a great partner with them. We've proved we're very comfortable in that regard. We will control the look and feel of the uniforms. We're going to focus on how those uniforms enhance performance as much as we're going to focus on what they look like. Q. Jack, you talked about a 10-year contract and you said it was the largest in college history. Can you be a little more exact on financial terms? JACK SWARBRICK: Of course not. But it's a situation where that information is readily known about the other agreements, in part because of public records, laws. Our degree of confidence in making that representation is very high. We know what the other deals are out there, and we fit in that category. But consistent with all our agreements, we won't be providing any of the specific details. Q. Kevin, can you talk a little bit about -- I think your company has a reputation of being the underdog, and a lot of the teams that you've equipped before have been teams that aren't among the biggest schools, although Auburn obviously this year was. How does this change your company's reputation and how you go about doing things? KEVIN PLANK: Yeah, well, first of all, I want to be clear. We've had a great stable of teams as a part that have frankly put us in this position to be able to take this opportunity on. You don't come out of the box in our industry and sign Notre Dame. At the same time the partners that came out and invested with us early because of a lot of things with timing and giving us that opportunity. Beginning with the University of Maryland to Auburn in 2006, these are teams that we've had long, rich history and tradition. At the same time I think the conversation that we used with Jack was the term game-changing. You heard it in my script earlier. J. Swarbrick, K. Plank

5 And I think that's something that Notre Dame is one of those, wow, that's one of the elites, and I think all of our programs are terrific, but this is a -- this just has a different angle and a different twist to it. So what we won't do is we will ensure that all of our teams, of course, get the best service and everything else, but we also look to hopefully ideally treat all of our partners unfairly, and that is something that I think I pushed on Jack very much is that we expect to treat you unfairly and give you that competitive edge and advantage as you look out during the year. At the same time, another great deal, and just a comment, I'm very proud, I think, of the effort that Under Armour has put forth just in the first couple weeks of the year. Last year we named the Naval Academy as entering into a partnership there, and how big of a deal that is for us, and then now having Notre Dame. Somebody sent me an the other night and said, "Congratulations on being able to cover both God and country." I think I echo that sentiment, and I'm pretty excited about that, too. JACK SWARBRICK: I would just add to that, obviously we're doing our due diligence. We're talking to those other schools, and those were great conversations for us. Great conversations because they reaffirmed what a good job Under Armour was doing for those institutions. But it reminded us of the family we were joining. They are schools with whom we, by and large, have very long and important relationships: Boston College, Northwestern, Naval Academy, the list goes on. So that was a nice sort of side element of it. One small fine point I want to make sure we're clear about: The agreement takes effect July 1st. That's when our current contract expires. So you won't see anything different in our teams through the remainder of this competitive season. It will be July 1st when you start to see the evidence of this change. Q. When you entered into negotiations did you enter into it with the idea of them being a supplier or did you know it would lead to a partnership? How did it all blossom to this point? JACK SWARBRICK: We absolutely approached this as an opportunity for partnership. With all of the businesses that support Notre Dame athletics, that's the way we try and build them. We think they're much more effective that way. We went through a formal process with this. We talked to all of the companies who might be logical suitors, and we made clear in the materials we distributed that we were looking for a very comprehensive partnership. Q. Does the deal include any signage in the stadium or the arena or anything like that? JACK SWARBRICK: No, there will be no change to our approach to signage with regard to any of our facilities, so no, it does not. Q. In talking to your coaches and athletes, what kind of questions, feedback have you had from them throughout this process? JACK SWARBRICK: Well, a lot of them are here today, but I have been gratified by the enthusiasm that has surrounded this as we worked through is it. They all called their peers and talked to them and got information. Kevin was nice enough to meet with the coaches on an earlier visit and talk to them. On a sport-by-sport basis we'll have specifics we'll have to work our way through. That's the nature of a relationship like this. But we, and by we I mean student athletes, coaches and the administration, are very comfortable that this puts us in a position to continue to compete at the highest level of college athletics and to have even more success. Q. You mentioned that the science aspect is really important to you. Is that strictly in the gear and the type of clothes they'll be wearing, or what kind of investments or development do you hope to do there? JACK SWARBRICK: No, gear is part of it, and it's an important part of it. The science of the football jersey in recent years is a great indicator of that. That's one of the things we talked to our peers; we want to know how does that jersey perform because that offensive lineman doesn't want to be able to have the defensive lineman hold onto that jersey. So we were specific about that. While that's the roots of the company, what I'm most excited about is the broader approach to sports science, the data they collect when they engage in research, the things we can do to try and figure out -- they made an investment in a technology company recently, which sort of is J. Swarbrick, K. Plank

6 a harbinger of that future. Getting better information, building databases that allow us to really tailor our approach to athlete preparation, and I think this partnership, of all the places it'll pay dividends, I suspect over the term of this agreement that's going to be the biggest one. KEVIN PLANK: I think from a technology standpoint, Jack references the company MapMyFitness we recently bought this past November, and their CEO Robin Thurston. This is a connective fitness community of more than 22 million people now. It's a site that signed more than 400,000 people the first week of January. And so understanding, having that data on over 20 million athletes and growing at a quick rate as to how we can help them, understanding how they work out and perform, and the team system that we have that we really pioneer with our Armour 39 technology at the NFL combine all the way back in 2011 that has led to this whole concept of werewolves and other things, and we were an early adopter in this space. I believe there's a safer, healthier way for us to be able to exercise our student athletes, and we are, I think, at the forefront of that process with the athlete themselves, and that's what we expect to use Notre Dame at the highest levels of competition that you have here with the ability to implement that and really change the way that people have thought about it. These things, and Jack referenced, as well, the speed skating suits, but the things that we can do that's available with science and technology, it matters to us. I think the question about this being a deal of what is this deal and checking with the peers and the reactions and other things, I want this community to know that we are ready for this deal. We want this deal, and we want these 26 varsity teams that we're going to do a great job for them and we're going to advantage them in every way that we can, and we believe we are the best positioned company and we're the best partner for Notre Dame and Notre Dame's entire community in order to perform with that because I know what matters, and it means championships and doing things the right way. We're going to do that in every way that we can, and whether it's Coach Kelly on the football field or Muffet, and congrats on the big win last night in basketball, or Coach Brey, and I think we're related at some level, myself and Coach Brey, so it was an easy conversation when we had that introduction. But there's a sense, I think, that we can help hopefully, and this is not a place that needs help, but I think we can bring additional benefits to it and take some of the technology, I think, that we are building anyway for our consumer and that we can implement here for Notre Dame and the benefit of all of Notre Dame athletics and hopefully the University as a whole, as well. When we looked at this deal, and frankly the size and the impact of what this means, there is such a large community here, and I'm talking about the leverage of the brand and doing it in places where you'd expect to see it and obviously not things like signage in the stadium and some other places like that that compromise some of the history, but I believe there's so much opportunity in this deal. As we reference things like the economics for this deal, I think this is going to prove to be what sounds like the largest deal in collegiate history is absolutely a fact, but more importantly it's then our job to see what we can do to make that a great deal for ourselves, as well, and we trust and have great faith obviously in the entire Notre Dame community that that'll be a reality for us, so we're thrilled. JACK SWARBRICK: A little insight into how his mind works: I got a text from him right after midnight mass saying, "I was just sitting here thinking about how many Catholics there are that we can sell to." KEVIN PLANK: And Irish. FastScripts by ASAP Sports J. Swarbrick, K. Plank