Los Angeles Superior Court rejected Under Armour’s attempt to dismiss a lawsuit brought by UCLA after the sportswear brand backed out of a 15-year, $280 million sponsorship deal with the school.
UCLA is seeking more than $200 million in damages, alleging Under Armour improperly reneged on its agreement for what was the most lucrative sponsorship deal in the history of college sports.
The court ruled that Under Armour failed to show it ended its contract with UCLA under “force majeure” — an event beyond the company’s or university’s reasonable control — despite the global pandemic.
Under Armour is in the midst of a significant restructuring that’s affecting several parts of the business.
- The company sold MyFitnessPal last November to Francisco Partners for $345 million, down from the $475 million it paid for the platform in 2015.
- It agreed to a $9.75 million buyout with the University of Cincinnati in December, exiting a 10-year, $50 million contract five years early.
- The company ended its on-field licensing contract with the NFL in February.
UCLA went on to sign a six-year, $46.45 million sponsorship deal with Nike and its Jordan brand in December. The institution will receive $43.45 million in product and $3 million in cash.
In what may be the start of a comeback, Under Armour generated $1.4 billion in revenue during Q2 2021, up 91% year-over-year.