The University Record, May 8, 2000

Nike terminates contract negotiations

By Jane R. Elgass

Nike Inc. on April 27 terminated negotiations for the renewal of a six-year agreement with the University that would have provided funding and Nike footwear, apparel and equipment for the U-M’s 25 varsity athletic teams through April 2006. The current contract has been worth about $7 million.

In a press release, Nike claimed surprise that a modified agreement “contained specific new parameters compelling the company to comply with the University’s undefined and still evolving labor standards and human rights policy. Nike has been consistently clear that the proposed language is inconsistent with our partnering standards,” said Kit Morris, Nike’s director of college sports marketing.

In response to Nike’s termination of negotiations, the University said in a statement that, “Nike has chosen again to strike out at universities committed to finding appropriate ways to safeguard and respect human rights,” referring to the U-M’s Anti-Sweatshop/Human Rights Policy adopted in March 1999 and its conditional membership in the Workers Rights Consortium (WRC), announced in February.

“Michigan has kept Nike fully informed of all its actions and plans as Michigan and universities across the country seek an appropriate forum to address labor conditions in apparel manufacturing. In taking this drastic step, Nike is abruptly cutting off discussions and breaching our understandings. Despite Michigan’s long relationship with Nike, it appears that for the third time Nike is trying to make an example of a university. Michigan remains committed to its premier athletic program and respect for international human rights.”

In March, Nike broke its contract to supply hockey equipment to Brown University and on April 24, Nike chairman Phil Knight said he would stop giving money to his alma mater, the University of Oregon, because of its WRC membership.

The contract termination puts additional pressure on an already tight budget at the Department of Intercollegiate Athletics, and will make it particularly difficult to arrange for uniforms and equipment for fall sports.

As a result, on April 28 President Lee C. Bollinger announced a one-time transfer of $3 million from the President’s Unrestricted Gift Fund to the department.

“We are part of one university community,” he said. “When people try to punish Michigan for acting with honor, we will stand behind those who are harmed.”