Nike Inc. has agreed to extend by one year its licensing agreement with the University of Michigan, which will buy uniforms and equipment from Nike for the next academic year.

The deal, reached in May, came two weeks after Nike abruptly called off talks on renewing a contract to provide money, footwear, and apparel to all 25 of Michigan men's and women's varsity athletics teams, arguing that the university had made unreasonable demands. The university has conditionally joined the Worker Rights Consortium, a student- and laborled organization.

The interim one-year contract apparently has nothing to do with a change of heart, but everything to do with logistics. Michigan had already placed an order with Nike for equipment and apparel for the next year, on the assumption that the current contract, which expires in August, would be renewed.

Cheryl McCants, a company spokeswoman, said "we are committed to the principle that even though talks between us broke down, the athletes will not suffer."

Michigan will pay Nike $760,000 for uniforms and equipment for the upcoming year, a far cry from the expiring contract. Under its terms, Nike pays Michigan's athletics department $590,000 per year in cash, in addition to providing about $930,000 worth of products at no cost. Nike also will continue to make apparel for the retail market with the university's name and logo for another year. Nike pays Michigan a royalty under the agreement for each piece of Michigan apparel that it sells.

William C. Martin, Michigan's interim athletics director said the university would "continue to explore its options."

-MARTIN VAN DER WERF