28.Aug .2020 16:56

UCLA sues Under Armour for ending a $280 million sponsorship deal

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UCLA is suing sportswear company Under Armour for ending a $280 million sponsorship deal.

The suit, filed Wednesday in federal court in Los Angeles, alleges that Under Armour was struggling before Covid-19 and that it used the pandemic as a reason to get out of the deal. The school is seeking more than $200 million in compensation, the suit says.

The 15-year sponsorship deal, signed in 2016, was the largest in the history of college sports at the time. In exchange for the $280 million, UCLA's student-athletes and personnel would wear and use Under Armour (UA)-supplied products exclusively.

Under Armour said in June that it "recently made the difficult decision to discontinue our partnership with UCLA, as we have been paying for marketing benefits that we have not received for an extended time period."

UCLA's lawsuit alleges the deal had become too expensive for the sportswear company and cites other issues at Under Armour, such as financial troubles such as a federal probe of its accounting practices.

The suit also argues that the company could deliver on its promises.

"Under Armour is perfectly capable of providing the products that it promised to provide, and making the payments that it promised to pay," the lawsuit said. "Under Armour, in fact, has intermittently provided some of the promised products during the COVID-19 pandemic, though it has intentionally withheld others and delayed deliveries in an effort to cause more harm to UCLA."

Under Armour said in a statement that it was disappointed with the UCLA lawsuit and plans to vigorously defend itself.

"We sought and remain open to working out a reasonable and appropriate transition for the university, and most importantly for the student-athletes," the company said in a statement provided to CNN Business. "In fact, at UCLA's request after the termination of the agreement, Under Armour continued to deliver athletic products for the 2020-2021 school year because we support athletes, even as it remains uncertain when sports will resume."