A Los Angeles Superior Court judge has rejected Under Armour’s attempt to dismiss the lawsuit brought by the University of California, Los Angeles, in which it is seeking more than $200 million in damages after the sportswear brand terminated its sponsorship deal with the school last year.
Judge H. Jay Ford III yesterday gave Under Armour 20 business days to respond to his decision, setting the next court date for 23 September.
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UCLA sued Under Armour for breach of contract last year after the brand announced it was ending its 15-year, $280-million contract after just four years, citing the coronavirus pandemic and poor performances from the university's flagship sports teams, which meant it had not received unspecified marketing benefits that it paid for over “an extended period.”
According to the sportswear firm, the contract included a stipulation that allowed for such a move.
However, Ford wrote in his ruling that Under Armour failed to establish that its termination of the agreement was clearly permitted under a force majeure clause.
He wrote: “The judicially noticeable documents also do not clearly and affirmatively establish that the pandemic rendered it impossible or impracticable for Under Armour or UCLA to perform.
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By GlobalData“At best, they establish the existence of a pandemic and the public response thereto. They do not establish the impact of the pandemic on Under Armour’s or UCLA’s ability to perform under the agreement.”
Additionally, Ford determined that Under Armour did not clearly establish that it could end its partnership with UCLA because the university’s baseball team missed more than half of its games during the 2020 regular season.
The judge rejected an Under Armour attorney’s claim that UCLA was using force majeure as an excuse for not playing games while also disputing the company’s right to terminate its agreement under the force majeure clause.
Following the court decision, Mary Osako, UCLA vice-chancellor of strategic communications, said: “Despite Under Armour’s expensive legal manoeuvres, UCLA and fair play won today.
“The story of Under Armour’s corporate shenanigans and broken promises that left our student-athletes and the Bruin community out to dry is one that deserves to be told. We’re gratified that the court cleared the way for the case to proceed.”
Under Armour was paying $11 million per year in rights and marketing fees as well as contributing $2 million per year to aid in facility improvements. Under terms of the contract, the company was supposed to supply $6.85 million in athletic apparel, footwear and uniforms.
Its deal covered apparel and footwear for UCLA’s teams in various sports overseen by the NCAA, including American football and basketball.
After the termination of the Under Armour deal, UCLA signed a six-year agreement with NIKE and its subsidiary Jordan Brand.
However, that contract is understood to be worth less than half of its previous deal with Under Armour, with Nike paying around $7.7 million per year.
The long-term partnership with Under Armour was the biggest in US collegiate sports history when it came into effect in 2017 and paid the school around $18.6 million per year.
That contract also included a $15 million signing bonus, $135 million in rights fees and nearly $113 million in product.
