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PSU Contract #_| “ =~ wigeae | Vikings Department of intercollegiate Athletes Post otce Box 751 503-7254000 tel fortand, Oregon 97207-0751 503-725-5850 fx {15 Urvesty Center Bung 80087-0857 tal oe 52? SW Hal est ovis cm Fortnd, Oregon 37201, Date: March 20, 2012 To Monica Rimal, Vice President, Finance & Administration Dee Wendler, Associate Vice-President, Finance & Controller Fro Torre Chisholm, Director of Athletics wey Re: Sole Sourcing Athletics Sports Apparel Sponsor This memorandum will serve as reasoning and justification for awarding a contract renewal to NIKE as the exclusive provider for sports apparel to the Portland State University Intercollegiate Athletic program, Athletics will complete an existing seven-year partnership with Nike on August 31, 2012 During Winter Term 2014, NIKE presented me with a proposal to renew the partnership for an additional 7 years, The new proposal has a total value of $3,725,000 to Athletics compared to $2,710,000 on the previous agreement, representing a 37% increase. Due to the fair and reasonable renewal offer, as well as a variety of supporting circumstances, Athletics has elected to forego a competitive bid process and renew its partnership with NIKE. Informal conversations with NIKE’s primary competitor, Adidas, revealed that the company had no interest in an all-sports deal with Portland State, Additionally, my professional experiences, as well as those of ather senior Athletic administrators, confirm that the sponsorship offered by NIKE is very favorable. Most other institutions competing in the Big Sky or in comparable conferences, recelve pay- for-promotion agreements from the major sports apparel companies, where In the University must commit to a minimum-level of spending in order to secure complimentary product. Two relevant examples are UC Irvine and Northern Arizona, UC Irvine, similarly located in a major metropolitan region with a large student-body population, solicited bids for an exclusive sports apparel agreement, the best of which required $100,000 in purchases in return for $75,000 in complimentary product. ‘Northern Arizona, a fellow Big Sky member, recently signed an exclusive agreement with Adidas, the terms of which require the University to purchase $150,000 in product in return for $90,000 of complimentary product. NIKE has a long standing strategy of ‘owning’ its backyard, hence has partnerships with all four of Oregon's NCAA Division I institutions which are more lucrative than out-of- state partnerships they have with comparable institutions. PSU has been a significant beneficiary of this strategy and product provided by NIKE has alleviated $350,000+ in annual uniform and apparel purchases for the University. With the new deal, PSU can secure an additional seven years of apparel cost savings. Additionally, PSU Athletics’ relationship with NIKE goes much deeper than the terms of the contract. NIKE remains the #1 brand in sports apparel and our close relationship with the company creates a distinctive advantage for our student-athletes and for recruiting. The relationship creates access to NIKE World Headquarters for competition, training, and fund raising activities, Our student- athletes work with NIKE researchers on a variety of projects, including biomechanical analysis, product testing, and vision-Improvement programs. These are unique opportunities for student-athletes available primarily due to our close proximity to NIKE’s worldwide headquarters, Additionally, several student-athletes each year secure employment with NIKE, many of which continue with NIKE fulltime after graduation, Lastly, NIKE has been very financially supportive of PSU and PSU Athletics over time. To date, NIKE is credited by the Foundation for making gifts totaling $798,719 to Portland State, while the principal owner and Chairman of the Board, Phillip Knight, has contributed $849,349 to the University. ‘These gifts were not made as an enticement for the sponsorship agreement, but in support of the strong relationship between two institutions. I'm confident that PSU cannot attract a better sports apparel sponsorship than the one NIKE has offered and I'm even more confident that we cannot establish a more meaningful comprehensive relationship with a different vendor, For these reasons, Athletics has elected to move forward with renewing the NIKE sponsorship,

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