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Michigan's apparel contract could help set market for Texas

The iconic swoosh logo will replace the three bars of Adidas on Wolverines apparel. If Nike broke operating policy to pay big for Michigan, Texas could stick with the sportswear giant, too.

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Mark J. Rebilas-USA TODAY Sports

The Michigan Wolverines are the latest high-profile program to change apparel providers following a report from the Michigan Rivals affiliate that the Wolverines could bolt from Adidas to ink a major deal with Nike.

A Monday release from the school confirmed the news.

"After careful consideration, the right partner for the University of Michigan was Nike," said interim athletic director Jim Hackett. "This decision, this partnership is about more than Michigan athletics; at the core, it is about our University community and it is about two great names reuniting for an opportunity that speaks to more than uniforms and apparel.

"Nike is a recognized leader in its field when it comes to product innovation and we look forward to future collaboration."

The deal should help set the market for the Texas Longhorns as athletics director Steve Patterson continues to weigh whether to stick with Nike, the industry leader, or opt for upstart Under Armour, which is reportedly considering an offer worth as much as $150 million over 10 years.

Long a key brand in the Adidas portfolio after leaving Nike in 2007, Michigan is a giant among college athletic programs -- it still features the second-most lucrative apparel deal nationally, pulling in $8.2 million per year, behind only Notre Dame, which reportedly makes around $9 million from its new Under Armour contract.

Yet, is it possible that Michigan left Adidas for less money from Nike? The Tennessee Volunteers did exactly that, making the same switch for 50% less cash per year and less apparel.

So there are no guarantees that the Wolverines will receive more money than the Fighting Irish by signing with Nike -- this may not the landmark deal it has the potential to become, so the July 13 release of the financial information will represent a telling moment for the Longhorns.

When perusing the list of top apparel contracts as of December 2014, there's a brand noticeably absent from the top five -- Nike's highest-paid college program is the Florida State Seminoles at No. 6 nationally. So if Phil Knight's company is willing to pay close to $10 million or more to brand Michigan ahtletics, it would represent a major change in operating policy.

More likely is a deal similar to the one struck with Tennessee, which raises the question of why an athletic department would take less money and less apparel for a brand with more cachet -- it's not like the Volunteers are looking for Oregon Ducks-style uniforms. Patterson definitely isn't taking less money, so some "product innovation" isn't going to trump dollar signs.

If Nike does match or exceed the previous Michigan apparel deal, it could signal an increased willingness to spend more money to keep major programs wearing the swoosh. If the Wolverines followed suit in taking less money as the Volunteers did, the Horns will likely kick off the 2015 season wearing Under Armour unless Nike makes a major burnt orange exception.