Russell royalties no big loss

The severing of UNC's licensing contract with Russell Athletic will damage the manufacturer's reputation and business but will not lead to an overwhelming financial loss for the University.

During the last fiscal year UNC earned $61274 in royalties from the Russell licensing agreement. The royalties are calculated as a percentage of what it costs for Russell to make the goods.

This number is small relative to the more than $3.6 million of net revenue the University received from its trademark licensing program in the same period.

Chancellor Holden Thorp decided March 6 not to renew the University's contract with Russell Athletic because of violations of UNC's labor code which requires that licensees allow unions and provide adequate working conditions.

Independent oversight groups said Russell fired 145 workers in Honduras who tried to unionize and later closed the plant eliminating more than 2000 jobs.

The contract also was hotly disputed by members of Student Action with Workers in a rally at the licensing committee's Feb. 19 meeting.

 About 20 schools — including Duke and Penn State universities — have also ended their contracts.

Russell claims that the plant closing was a result of the poor global economy" and that the universities are buying into a ""blatant misinformation campaign" spokeswoman Catherine Gammon said.

These false allegations have damaged the reputation of our company" she said. The Carolina blue is a color that we take a lot of pride in manufacturing with UNC marks.""

Money from licensing contracts" which includes more than 500 companies goes to student scholarships.

The decision not to renew the Russell contract will not have much of an impact on UNC's Student Stores said John Jones" director of Student Stores.

""From our point of view" it really is not that an important of an event for us" he said. It's much more important for the licensing side of the University as a statement of the University principles.""

Jones said there are many brands that are as popular or more popular than Russell.

Student Stores will continue to sell whatever inventory it has but will not reorder any merchandise from the company.

The contract" which ended Tuesday ends a continuous licensing relationship with Russell that dates to 1993.

After 60 days any remaining inventory of UNC-licensed products in Russell's possession must be destroyed or surrendered to UNC's licensing agent the Collegiate Licensing Company.

Russell will not be compensated for the loss of this inventory. The company can apply to reactivate its license with UNC in a year.

The company would need to provide information on how it has established compliance with the University's labor code said Jack Evans chairman of UNC's Licensing Labor Code Advisory Committee.


Contact the University Editor at udesk@unc.edu.