This Is a Watershed Moment for Under Armour Inc.

Under Armour just agreed to the largest college sports apparel deal in history. Here's what investors need to know.

Jan 22, 2014 at 4:12PM

Under Armour will replace Adidas as Notre Dame's chosen brand. Nike also lost in the bidding process.

Under Armour has signed a 10-year partnership with The University of Notre Dame. Image source:

Heads up, all you Fighting Irish fans, because the gear used by your favorite collegiate sports teams will soon bear a new logo.

On Tuesday, after 17 years with Adidas (NASDAQOTH:ADDYY), The University of Notre Dame announced a fresh 10-year partnership with Under Armour (NYSE:UA).

Of course, that doesn't mean Adidas and Nike (NYSE:NKE) rolled over without a fight; both athletic apparel giants were said to have submitted bids for the deal, which begins July 1, 2014, following the conclusion of Adidas' most recent 10-year, $60 million contract with Notre Dame.

However, Under Armour ultimately agreed to what Notre Dame director of athletics Jack Swarbrick called "the largest financial commitment ever made by a brand to a university."

And while Under Armour's founding CEO Kevin Plank admitted, "This is a pinch-me moment without question," he also insisted that Under Armour will be able to successfully take the technology it's building for consumers and implement it to the benefit of Notre Dame.

Perhaps more important for Under Armour, Plank reminded that the agreement effectively offers Under Armour the opportunity to leverage its brand with the massive community behind both Notre Dame and its athletics program. To be sure, Under Armour will not only design and supply the footwear, apparel, training equipment, and game-day uniforms for all 26 of Notre Dame's varsity athletic teams, but also looks forward to integrating the university into its global marketing efforts, social media initiatives, and in-store promotions.

Why this partnership is different
According to the folks at ESPN, anonymous sources have stated that the deal is worth around $90 million. That's huge, but not a tremendous amount more than the $82 million agreement Adidas signed with the University of Michigan in 2008. Even so, given its intangible benefits and absent the release of specific financial terms, it'll be tough to accurately measure the effectiveness of the partnership for now.

We do know, however, that the landmark deal sports one particularly unique feature: According to Swarbrick, Notre Dame has the option of taking a portion of the deal's cash component in Under Armour stock.

And this isn't the first time Under Armour has extended an equity stake as motivation, either. Back in 2010, for example, Under Armour did the same thing to compel New England Patriots QB Tom Brady to leave behind Nike.

Why? With a market cap of "just" $8.9 billion -- which makes Adidas and Nike roughly three and seven times larger, respectively -- Under Armour obviously doesn't enjoy the same financial resources  as its huge competitors to finance such deals.

With this in mind, Under Armour can offer enormous growth down the road. In fact, nearly 94% of Under Armour's net revenue was derived from the U.S. last quarter, which means the company has barely scratched the surface of its global potential. As a result, it's sure hard to blame Notre Dame for its excitement to become a significant Under Armour stakeholder.

Better yet for investors, by ousting a huge global brand like Adidas from one of its well-established strongholds, Under Armour continues to make it clear that its eyes are set on nothing short of global domination.

Consider the six incredible growth stocks in this free report
I plan on holding my shares of Under Armour for decades to come, but that doesn't mean it's the only great growth stock out there. So where else should you look?

Consider co-founder David Gardner, who has proved skeptics wrong, time, and time, and time again, with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently, one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Fool contributor Steve Symington owns shares of Under Armour. The Motley Fool recommends Under Armour. The Motley Fool owns shares of Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information