Sports Business Profile: Learfield Sports

Scott Kitun/The Medillian

Scott Kitun/The Medillian

Sitting in a small office affixed to Ryan Field, on the campus of Northwestern University, is a staff comprised of just one marketing executive and a handful of interns wholly responsible for maximizing the school’s athletic department revenues.
Working within the large Chicago market, Wildcats have an advantage that most schools do not, media access. But, with few people to work the phones and negotiate sponsorships, it is increasingly more difficult to capitalize on all of the opportunities that media access provides.
“It’s just impossible for a one or two-man crew to keep up with what it takes to compete in today’s sports environment,“ said Danny Spataro, Northwestern Sports Properties general manager.
That was before 2009, when the school hired Learfield Sports to assume all of its sports marketing responsibilities.

Launched in 1975 by Clyde Lear and Derry Brownfield, Learfield Sports has grown into a collegiate marketing outsourcing company that employs more than 250 people and manages sponsorship, media, and marketing inventory for 54 university athletic departments and counting.

“Our primary mission is to maximize collegiate athletic program revenues by the development, sales and implementation of national, regional and local sponsorships,” said Jennifer Duncan, Learfield Sports spokeswoman.

By connecting brands with the tradition and passion of college sports, Learfield offers rights packages that typically include radio, television, digital content, online and social media and signage.

Some of the schools now partnered with the company includes: Alabama, Illinois, Indiana, Missouri, North Carolina, Northwestern and Texas A&M.

With the increased popularity of at-home viewing, college athletic departments depend on brokering TV and radio deals with local affiliates to broadcast their games and sell advertisements.

According to a recent National Collegiate Athletic Association report, Football Bowl Subdivision [FBS] programs have increased their operating budgets by an average of 11 percent year-over-year, since 2009.

In fact, only 23 FBS schools, half of which are partnered with Learfield, made more money than they spent last season.

And, only six of those 23 programs have been able to replicate this for five years in a row, according to the report.

Top-tier schools, on average, lost around $11 million in 2010, a 27 percent increase from the $9 million reported in 2006.

Given the effects of an economic recession and reduced budgets, athletic programs are looking towards sponsorships to increase their financial resources.

And it’s showing up in lots of places. “I’ve been going to Notre Dame and Purdue football games my entire life and I never remember seeing ads on everything like they have now,” Purdue alum Peter Lee said.

It may seem new but the history of college athletics and sponsorships dates back 160 years.

In 1852, Harvard and Yale competed in a rowing meet on Lake Winnipesauke in New Hampshire. Always a rivalry, students from both schools would frequently attend such spirited events, sometimes with as many as 300 onlookers. However, this time would be different.

According to Guy Lewis, author of “The Beginning of Organized Collegiate Sport”, the New England Railroad Company financed and promoted the event. The railroad company selected a popular tourist destination, in order to promote its schedule of train trips to the lake.

The impact of the partnership was over 1,000 event attendees.

This regatta emphasizes that since the origin of intercollegiate athletics, businesses partnerships with college athletics can be lucrative.

Enter sports marketing companies like IMG College LLC and Learfield Sports.

In December, Learfield partnered with University of Illinois, its eighth Big Ten Conference member, as the Division of Intercollegiate Athletics (DIA) exclusive athletics’ marketing partner and multimedia rights holder.

It created “Fighting Illini Sports Properties” in Champaign, Ill. to directly oversee the majority of the school’s athletics’ media rights – including signage, sponsorship, corporate hospitality, event marketing, radio production and sales, and television coaches’ shows and official athletic website advertising.

While Learfield declined to comment on their annual revenue, Hoover’s estimates that their offices in Jefferson City, Mo and Plano, Texas earned $480,000 and $380,000 respectively.

“Learfield Sports is a leader in the collegiate space, and a dominant presence in the Big Ten landscape,” said Mike Thomas, University of Illinois Director of Athletics.

The new partnership will result in a 50 percent increase in net sponsorship value, with significant annual increases each of the following years of a 10-year agreement.

“This new partnership is also a wonderful addition to our portfolio of Big Ten schools and further enhances our relationship with the conference,” Greg Brown, Learfield’s President and CEO, said in a press release.

The increases are mostly due to a financial guarantee, ticket and hospitality purchases, in-kind support, and direct cost savings, specifically in ticket sales.

IMG College and Learfield Sports are also being used by schools to outsource ticket sales.

“This joint venture just makes sense, and we’re pleased to be an equal partner in its growth and development moving forward,” Brown said.

Schools benefiting from this joint venture, such as University of Tennessee, have already reported generating more than $2 million in new ticket sales in just eight months, as well as nearly $500,000 in donations generated for the university as a result of the new season ticket holders.

The school’s athletic department will realize more than $1 million net increase in value compared to last year, according to a press release. Much of this gain can be attributed to Learfield assuming the department’s radio and television production costs.

Throughout the 10-year agreement, the Champaign-based division will generate more than $60 million from all external sponsorship and multimedia rights activities.

On average, these planned partnerships will help the department secure an additional $2 million annually.

On top of the other revenue, Learfield Sports has committed funding to help finance future video board and scoreboard enhancements at Memorial Stadium and Assembly Hall – a major corporate marketing attraction.

Learfield also established a joint venture with Chicago-based Levy Restaurants in 2010, named Learfield Levy Foodservice. This service is already serving more than 100 locations, including stadium concessions at Mizzou, Purdue and Iowa State.

In addition to partnering with more than 50 academic institutions, Learfield has also partnered with two conferences, Big Ten Conference and Missouri Valley Conference, where it focuses less on localized markets and more on national sponsorship.

“We work as the macro version of say, Northwestern Sports Properties. We are more cross-platform in that we [properties] can share data and ideas,” said Scott Bailey, Big Ten Sports Properties General Manager. “With our end-game being that we’re securing national sponsors for our Big Ten Championship events.”

For companies like Learfield and IMG College, partnerships are capital, the more roles they can fulfill the more valuable they become to their potential clients.

The imagination of the schools and the capabilities, entrepreneurship and inventiveness of third parties, such as Learfield Sports, are the only partnership limitation.

“Learfield extends its multi-platform support system throughout its 50-plus partners,” said Danny Spataro, Northwestern Sports Properties General Manager.

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