Pitt basketball was no shoo-in for success when adidas called
Pitt's invitation to join the more financially lucrative Atlantic Coast Conference, raising the profile of its athletic department, has its origins 15 years ago when athletic director Steve Pederson made two pivotal decisions, one involving a basketball coach and the other a shoe.
After the Panthers play in their final Big East Tournament this week at Madison Square Garden, their move to the ACC next year will net $17.1 million annually, courtesy of a 15-year, $3.6 billion television contract. Compare that to Pitt's smaller take from the Big East, which recently completed a six-year, $200-million TV deal.
Part of Pitt's prominence on the college basketball stage can be traced back to a shoe contract that Pederson negotiated with adidas shortly after his arrival. The contract provided free uniforms and other equipment, freeing up revenue to spend on improving facilities, recruiting and salaries.
Pederson's next big move was hiring relatively unknown basketball coach Ben Howland.
All Howland did in his four years at Pitt was win two Big East regular-season championships, capture the school's first Big East Tournament title and guide the Panthers to two straight Sweet 16 appearances. When Howland left for UCLA in 2003, his top assistant, Jamie Dixon, took over and guided Pitt to the NCAA Tournament in each of his first eight seasons.
“We have built what is widely acknowledged to be a truly elite men's basketball program and have been a factor in other sports for decades,” chancellor Mark Nordenberg announced Jan. 20, 2012 regarding Pitt's new conference affiliation. “We need to make certain that we have a secure, long-term home for all of those sports.”
The success of Pitt's nationally ranked basketball program was a major impetus in the school securing a new shoe deal with Nike in 2009, which added millions of dollars in outside revenue and strategically positioned the athletic department to officially join the ACC two years later.
“We've had some pretty exceptional years in a row in basketball, which just elevates everything in your program,” Pederson said. “I don't know if there's many places that basketball plays as important a role as it did here. Basketball was probably the key driver in everybody's desire to make a deal with us.”
Former shoe executive and Trafford native Sonny Vaccaro was even more emphatic in crediting basketball with Pitt's success.
“The basketball program saved the University of Pittsburgh athletic department,” said Vaccaro, who as adidas president brokered the original deal with Pitt. “What it brought was 2013 and a multimillion dollar deal with Nike in another conference. Nothing's changed in 15 years at Pitt other than a shoe company and more money.”
Connecting the dots
Pederson arrived in October '96, a season in which Pitt tied for second in the Big East and played in the National Invitation Tournament for the seventh time in school history. Pitt hadn't played in the NCAA Tournament since 1993.
The Panthers struggled the next two years under Ralph Willard, going a combined 25-32 and creating an atmosphere for Pederson to consider hiring a new coach.
Pederson's choice: Howland, a surprising selection for a program seeking to excite the masses. Though he lacked big-name appeal, Howland was 79-59 in five seasons at Northern Arizona, which nearly beat favored Cincinnati in the 1998 NCAA Tournament. Howland arrived with an impressive stamp of approval.
Howland went 13-15 in his first season, including an 11th place finish in the conference. Over the next three years, Howland transformed Pitt into a national power with 76 wins in 101 games.
“I owe so much of my career to Steve Pederson for taking a chance on me,” Howland said last month.
Along the way, adidas signed Pitt to an exclusive deal to outfit all of its athletic teams. Pederson and Vaccaro did not divulge the terms of the agreement, but in 1997 North Carolina agreed to a five-year, $7.1 million contract with Nike. In 2001, Vaccaro's relationship with new Louisville coach Rick Pitino resulted in a four-year deal, providing the basketball program with $150,000 annually in equipment. Pitino, who won a national championship at Kentucky, earned $250,000 annually, making him adidas' highest-paid coach. Howland, on the basis of his association with Vaccaro, also was compensated by adidas; however, at a fraction of Pitino's take.
“At the time, adidas had UCLA and Tennessee and had signed Notre Dame. Pitt was one of the first,” Vaccaro said. “There was a major, major infusion of money.”
“Adidas didn't have that many coaches in the Big East. John Thompson, Jim Boeheim — they all signed with Nike,” said Vaccaro, who signed those coaches when he was at Nike. “The Big East was an unbelievable conference. They were winning championships, had a great television deal. Pitt basketball drove Pitt athletics and the shoe endorsements.”
Taking a chance
“Adidas took a chance on us,” Dixon said. “It made us a major player in the equation because we didn't earn it. They took a flyer on us in a lot of ways. The shoe affiliation is a big part of college athletics. It made us feel legitimate. It got to eight or nine years later and we had a number of shoe companies fighting over us.”
When Pitt signed a multi-year deal with Nike in August 2009, the Panthers had just completed the best season in school history: Pitt fell one game short of the Final Four while finishing with a 31-5 record.
Financially, Pitt was the No. 14 most profitable college basketball program in the country during the 2009-10 athletic year, netting $7.1 million, according to Department of Education statistics. The Panthers finished ahead of UCLA and Howland ($6.1 million), Kentucky ($5.2) and Kansas ($5.1). Pitt's football program netted a $5.1 million profit.
Pederson, who left for a five-year stint as Nebraska's athletic director, returned to Pitt in 2007 and parlayed the success of the basketball program into a new deal with Nike.
As a reference point to what Pitt received, Connecticut signed a 10-year, $45.5 million contract with Nike in 2008.
“The more successful your program, the more interested everybody is,” Pederson said. “We had a lot of companies interested, but we narrowed it pretty quick to Nike and adidas. We made the decision to go to Nike.”
Basketball success influenced the ACC's decision to add Pitt, Syracuse and Louisville, the Big East's three top money earners in the sport.
““What I heard from coaches and administrators in the ACC, people that knew the inner workings of the expansion, they wanted to expand with the intention of improving and growing their basketball conference,” Dixon said. “The ACC thinks of themselves as a basketball conference. We provided them an opportunity in their minds to improve the conference.”