Thurow, R. Wall Street Journal. "Shoe companies, tongues out, buy up college teams wholesale" Shoe Companies, Tongues Out, Buy Up College Teams Wholesale From the frontlines of world war shoes comes this battlefield update from the Reebok International Ltd. camp. "Michigan State, head-to-toe Reebok, defeats Michigan," says a company lieutenant. "Northwestern, in our shoes, defeats Penn State. Two Reebok programs knock off two highly touted Nike programs. A big weekend." The foot soldiers have stormed the ivory towers of academia. Actually, they've walked right in, with college administrators, squeezed by stingy state legislatures, holding the gates wide open and welcoming the gravy train of corporate sponsorships. During the current football season, a few schools have sold their home games to sponsors who then took the contest on the road to more lucrative locations. A few schools, like Southern Methodist University in Dallas, have peddled the title of individual games , as in the Cadillac SMU-Texas game. Most notable, entire college athletic departments, from volleyball football, have gone corporate, signing for millions with either Nike Inc. or Reebok to provide shoes and apparel. What began years ago as standard discount deals by shoe companies-buy one pair, get one free-to get their sneakered feet in the door of hugh college sports market, and later escalated into lucrative deals with individual coaches, now engulfs complete universities. Nike, of Beaverton, Ore., signs up the University of Southern California; Reebok of Staughton,Mass., gets the University of California at Los Angeles, Nike grabs the University of Alabama; Reebok takes the University of Texas. Nike, being the biggest competitor and first off the mark, so far has nine schools on its roster, also including Colorado, Florida State, Illinois, Miami, Michigan, North Carolina and Penn State. Reebok boasts two complete university deals, and recently locked up a contract to supply the shoes to than 80 teams in the 10-school Southern Conference. These two companies, as well as other outfitters like Germany's Adidas AG, Champion Products Inc., a division of Chicago based Sara Lee Corp., and Russell Corp., Alexander City, Ala., generally share the outfitting of other universities. These days, the college try is getting as logo-laden as a Indy car. Universities, of course, have never been shy about accepting corporate funds. But while an endowment of the physics department may be laudable, outside money flowing into college athletics brings suspicion as well as support. Through the years, a number of high profile teams have been tainted by scandals involving illegal payments and inducements to players. Corporate sponsorship risk sweetening the pot of temptation and feeding the argument that college football and basketball players, the performers in the two big revenue sports, should get paid for enriching their schools. The recent moves to sign up whole departments might have gone relatively unnoticed if Nike hadn't put its trademark Swoosh prominently on the front of its football jerseys. Before this season, manufacturers mainly stitched their logos into less prominent places - on a sleeve or down by the waist, for example. But anonymity is not the Nike way. "For us," says Nike spokesman Keith Peters, "the bottom line is that there is a great deal of exposure, whether it is on the shoulder of a Penn State football player or the feet of a women's soccer team." So it has come to pass that the only identifying mark on the blue and white uniform of Penn State's football players this season, others than their numbers, is the Nike swoosh above their heart. Under coach Joe Paterno, no frills traditionalist, the uniforms are devoid of players' names and even logo of the Nittany Lion mascot. A novice, seeing Penn State for the first time, could be excused for wondering if they are the "Nike Lions." For $2.6 million over three years, the Penn State athletic department sold not only its soles but a bit of its soul, too. "I've heard Joe say that he's enough of a realist to know that if people are making an investment into an organization, they're entitled to a return." says Budd Thalman, Penn State's associate athletic director. For most universities it is well worth it, from a dollars - and - cents standpoint, at least. At the same time state governments are cutting back on university funding, the federal government is demanding that schools spend more money on women's sports programs to balance the tradition heavy spending on men's athletics, particular football and basketball. According to a 1993 survey by the NCAA, the athletic departments at the more than 100 division I-A schools that play big time football ran an average surplus of $660,000. If institutional support is subtracted, that changes to an average deficit of $174,000. And the old truism that football is a cash cow funding all of a school's sports is no longer so true. In 1993, one-third of division I-A football programs were losing money, at an average of $1 million per school. At the NCAA's 800 member schools, spread over several competitive divisions, the red ink is flowing even more heavily. The marketing attitude at most athletic departments is "pretty much go out and get what you can," says Kathryn Reith of the NCAA. Several athletic conferences, emulating the Nike and Reebok deals, are considering pooling the collective rights of member schools and signing up "official" conference sponsors for rental cars, express delivery service and airlines. The NCAA tries to keep at least a loose leash on the commercialization of its schools - a manufacturer's logo can cover no more than 2 1/4 square inches in area on a uniform, for example - and attempts to control its own marketing urges. For instance, while the organization collects vast sums from sponsors of the Final Four men's and women's basketball tournaments, it bans logos from the playing floor area to keep them out sight of the television cameras. "We don't want players out on the field where their uniforms are covered with corporate logos," Ms. Reich says. But after Nike positioned the swoosh on the front of the football jersey, can its competitors, or purveyors of other products, be stopped from doing the same thing - turning college athletes into running, jumping, tackling sandwich boards? "If schools allow this to continue, then everybody is going to want to play. And everyone will want to use the same billboard," says Donna Lopiano, executive director of the Women's Sports Foundation. "It's perfectly fine to have a sign on the scoreboard. We name rooms and buildings for corporate donors. But we name students." As a former director of women's athletics at the University of Texas, Ms. Lopiano applauds corporate funding for college sports. But, she worries, it could eventually endanger the universities' not-for-profit tax benefits. In accepting money for the prominent display of logos on uniforms, are colleges behaving any different than professional athletes? "The more [schools] act like paid entertainment...well, they better be real careful," she says. But it is difficult to walk away from new revenue, even for the most prosperous of athletic departments. Florida State University in Tallahassee, for instance, is a school that annually harvests money from postseason football bowl games, has a generous booster club and operates a $25 million athletics budget, which can be counted on to produce a surplus of some $2 million to transfer into general university use. Still, when Nike contracts with the football and basketball coaches came up for renewal last year, new FSU president Talbot D'Alemberte figured the school itself could do better. He heard that Michigan had signed a six-year, $7 million contract with Nike covering the entire athletic department. "It seemed like a better deal for the university," Mr. D'Alemberte says. "It gives you a chance to even out the support you give to all your athletic programs. We know that in the marketplace, our women's softball team doesn't have much bargaining strength, even though it's one of the best teams in the country. Getting more out of Nike became the top priority for new athletic director Dave Hart. "You don't negotiate a significant contract without leverage," he says, smiling - knowing that a football team that annually battles for the top national ranking and a basketball team that plays in the high-profile Atlantic Coast Conference give him plenty of that. After several weeks of negotiations in September, Nike was willing to put up $6 million over five years. As part of the arrangement, Nike agreed to supply FSU's intercollegiate teams with shoes, uniforms and practice gear, valued at $400,000 a year, and contribute about $1 million in cash over the five years to be used at university discretion for women and minority programs and degree-completion programs for former student-athletes. Nike's relationships with some individual coaches were also included in the contract. In addition to exposure, Nike gets the right to market the "authentic" gear of FSU teams (through a myriad of companies are able to sell other things bearing FSU logos). The university collects the standard 7% royalty on all Nike-FSU stuff the company sells. For a school that has had its share of dark publicity while competing for the national football title in recent years - the NCAA has been looking into alleged violations centered around shopping spree in 1993 (the year FSU claimed the top spot) where several players received merchandise paid for by sports agents - FSU administrators weren't deterred from the Nike deal. They believe the school's insistence on Nike contributions to general university programs, as well as the oversight of the president's office, balances any charge of extreme commercialism. "You can't sit in the role of a CEO and be driven by a fear of perception," says Mr. Hart. "The reality is that it has become a marketplace issue. That's the world we live in." He chooses his words carefully: "Everytime I say this publicly, I can see people cringe: Athletics is a business. But it is!" Nike attaches some altruistic motives to its business. "The revenue generated [from the Nike contracts] can be spent on other things than equipment, like scholarships." says Mr. Peters. "It allows more men and women to compete on the collegiate level." Down the road in Tallahassee, Florida A&M University, a considerably smaller school than FSU, wouldn't mind a piece of that largesse. The school's annual athletic department budget is about $3 million and a number of sports aren't able to full scholarships. "Our teams don't have national exposure, so, naturally, when the Nikes and others come to us, we get the scrapping," says Florida A&M athletic director Ken Riley. The best deal Mr. Riley has heard from Nike and the other outfitters is the one he's been hearing for years: Buy one pair, get one free. "I'm not crying, though," he says. "I'm happy for the schools that get the deals. But, hey, help us, too."