Will Wisconsin Sever Ties with Adidas?

Author: Tyler Jamieson

A couple of weeks ago Cornell announced it was severing ties with Adidas over its labor practices.  Now it appears Wisconsin is looking to be next in line to do so, and Wisconsin is willing to put its money where its mouth is for the cause.

Wisconsin’s current deal with Adidas runs through 2016 and is worth approximately $2.5 million annually. The University also receives licensing royalties from Adidas that have provided hundreds of thousands of dollars for need-based scholarships for students outside of athletics.  However, the University is willing to sacrifice all that for its stance against sweatshop abuses in licensed-apparel manufacturing.

At issue is an Indonesian factory that was shut down by an Adidas subcontractor.  Over 2,800 factory workers were owed $3.2 million.  A small part of the factory produced Adidas apparel and some of that apparel was found to have Wisconsin logos on them.  Other companies such as Nike and the Dallas Cowboys, who presumably had items that were manufactured there, have provided financial relief for factory workers, but to date Adidas has not done so and factory workers are still owed $1.8 million.

Is Wisconsin’s cause a noble one?  Critics of the NCAA aren’t so sure.  It’s not uncommon to hear the term “slave labor” tossed around when referring to NCAA athletes.  Is it hypocritical for a big-time university like Wisconsin to take a stance on labor wages in the manufacturing of their apparel when it can be argued their returning 1^st team All American and Heisman trophy finalist running back, who led the team to a Rose Bowl berth last season, is grossly under-compensated?

To its credit Wisconsin is consistent with its belief. They pride themselves on being at the forefront of aiming to stop labor abuse in licensed-apparel manufacturing and they have the history to prove it.  This isn’t the first, second, or even third time they have ended license and apparel contracts over labor practice disputes.  In 2008, the University ended its license agreement with New Era over labor practices.  In 2009, the University ended its relationship with Russell over a closure of a factory in Honduras where it was alleged the factory was shut down as a hostile response to workers who were threatening to unionize.  In 2010, Wisconsin ended its licensing agreement with Nike due to a similar circumstance as Adidas – a Nike subcontractor closed 2 factories and was alleged to have owed workers approximately $2 million in severance pay.

For now, Wisconsin is keeping tight-lipped on the dispute with Adidas due to pending litigation.  Both sides agreed to mediation back in February, and after being unable to find a resolution the Wisconsin Board of Regents put the case in the hands of a court to decide if Adidas has met the Labor Code of Conduct term of their contract.  Should be interesting to see the outcome of this case and to see if other schools will follow Wisconsin’s lead.