In what had to be considered a pretty shocking announcement to most, Michigan ended one of the longest standing relationships between a college athletic program and a corporate sponsor today when it announced a eight-year deal with adidas starting with the 2008-09 season. The contract includes a $6.5 MM signing bonus and a $3.8 MM in cash annually, and that's not even mentioning seven figures worth of equipment and royalties on a yearly basis.
What makes the agreement so shocking is that Michigan, in addition to its standing as one of the top brands in college sports, has been in business with Nike for so long and made one of the first landmark deals between a college and an athletic supplier. (If you want to read more on that, read here)
While few will ever know for sure why the deal was made, you would have to think that it mostly comes down to the fact that adidas, looking for more high profile schools to bring into the fray, was willing to spend more than Nike, which has the lion's share of the top money makers in college sports (Texas, Florida, Ohio State and Southern Cal. to name a few). However, you would have to think that Nike put up some sort of fight to keep such a high-profile asset.
This is just another reminder of the fact that Division I college sports are truly a business.