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.

Sweetness!

Scott Kitun/The Medillian

Scott Kitun/The Medillian

Each year St. Patrick High School, in Portage Park, and St. Viator High School, in northwest suburban Arlington Heights, compete to see who can collect the most toys for the annual Walter and Connie Payton Foundation Christmas Party.

This year is no different.

St. Patrick has outdueled St. Viator in the annual Christmas toy drive two of the past three years.

“Having played for St. Viator and competing against St. Pat’s and coach Galante, I am truly appreciative for everything they have done for my family and our foundation,” said Jarrett Payton, son of the Chicago Bears’ legendary running back Walter Payton.

Known by the nickname of “Sweetness,” for his graceful running style and generous personality, Walter Payton was well-known for giving back to the community and especially to the children, his son noted.

Following his passing in 1999, Connie and their children, Jarrett and Brittany, established the Walter and Connie Payton Foundation to carry on their father’s legacy of sweetness.

By hosting toy drives over the past decade, the foundation has provided Christmas joy for thousands of underprivileged children throughout the city of Chicago, Jarrett Payton said.

“I just remember as a little kid my dad letting me go to the toy store and fill up a cart with anything I wanted. Then he would pull into a poor neighborhood and just pop the trunk and I would look at him like he was crazy,” he said. “Then, he would look at me and explain what it meant to be blessed and how to bless others and we would give all the toys away. That’s how it all started.”

For the past four years the Gary family, of 686 Buena Vista Dr. in Glen Ellyn, has hosted an annual Christmas party for the Walter and Connie Payton Foundation.

Last year alone, St. Patrick’s helped to collect over 300 toys for the annual toy drive and already this year according to St. Patrick Principal Joe Schmidt, they are on pace to collect even more, having collected over 250 toys to date.

“The foundation is very dear to our hearts and this party is a thank you to all of those who get involved,” Christy Gary said Saturday evening at the party.

The growth of the foundation has relied on the effort of families such as the Gary’s and on schools such as St. Patrick High School and St. Viator, where Jarrett was a star football athlete at quarterback and running back before his pro days in the Canadian Football League and the NFL.

“We always had to face Jarrett and St. Viator in sports and I got to know Walter over the years. I grew to have such respect for him that we retired his jersey, number 34,” St. Pat’s Athletic Director, Brian Glorioso said.

“Actually, each year the boys that do the most community service get to wear number 34 for the day,” he added. “That’s the kind of respect we have for the Payton’s.”

Local bar brings South Bend to Notre Dame grads

Scott Kitun/The Medillian

Notre Dame enters this Saturday’s rivalry game against University of Southern California ranked number 1 for the first time in the BCS era.

This game marks a reversal of fortune for both teams. Southern Cal, now unranked, began this season ranked number 1 in the preseason polls, while Notre Dame remained unranked.

Here at The Temple Bar, an official Notre Dame Chicago bar, located at 3001 N. Ashland Avenue, Irish fans are lined up out the door, clad from head-to-toe in blue and gold.

“The USC game is always the biggest of the year for us, but given that a win here puts us into the title game, makes this the biggest game of my life.” Logan Square resident, Tim Madden said.

The Irish and Trojans have played 82 times dating back to 1926. The Irish currently lead the overall matchup with 43 victories in the rivalry. However, the Irish have managed just one win, in 2010, against the USC Trojans over the past ten meetings.

Headlined by their Heisman Trophy candidate linebacker, Manti T’eo, the Irish are competing against a Southern Cal team that is currently unranked and playing without their star quarterback Matt Barkley, who is out with an injury.

Prior to kickoff, Irish fans huddled around the TV monitors singing the school song and cheering on the players as they entered the field.

The Temple Bar manager, George Zak described his experience at the bar as “the tale of two bars”. Temple is typically a low key Irish pub, but football Saturday, it turns into a real college bar.

“Its like this every weekend. These fans are rabid. You would swear we are at the game live the way these guys are screaming.” Zak said.

“I think we are always a little worried when we go against teams like USC,” Notre Dame graduate and Bucktown resident, Chase Riddle said.

“It’s like we aren’t entirely confident, until the defense gets a stop or we throw some point on the board.”

With a score of 16 – 10 at the half, Irish fans are really beginning to get into the game here at Temple.

This is the last game of the season for Notre Dame and their faithful understand that a win here today will most likely result in the Irish maintaining their number 1 BCS ranking, which would ensure that they play in the Discover BCS National Championship in Miami, Fla. on January 7.

“Trust me. We all know what this means, we all hear the overrated chants and this would be a loud response by the Irish. Undefeated and number 1, baby.” Madden said.

After a second half push by the Trojans, quieting some of the Irish fans at Temple, the Irish finally began to pull away in the fourth quarter with a barrage of field goals.

“I always get a little nervous in the second half. It’s like we can’t just lock the door. We always leave it a little bit open.” Riddle said.

After waiting 19 years, the Notre Dame fans couldn’t wait another minute. Shots began to pour and sounds of “Victory March”, the school’s fight song, rang out with minutes still on the game clock.

While Notre Dame will have to wait until BCS Selection Sunday on December 2 to punch their official ticket to Miami, today’s 22 – 13 win over USC makes Notre Dame a virtual lock for the BCS National Championship.

“Notre Dame is back. We earned it and now we’re number 1.” Riddle said.

Crab cakes and football

Hold your criticism Big Ten fans. This week when Big Ten Commissioner Jim Delany announced the addition of Rutgers and Maryland to the conference, there was an immediate backlash across the Twitter universe.

The general sentiment being that while conferences such as the SEC are adding championship caliber teams like Texas A&M to their conference roster, the Big Ten doesn’t seem to be adding much with their recent additions.

The fact is, most Big Ten fans were hoping for a Notre Dame-like team, if any, was to be added to the conference.

There is no question that the Big Ten Conference is feeling a pinch as the top tier teams are defecting for the SEC. Delany is doing everything he can to avoid falling into the same traps that the Big East Conference did.

That means strategically selecting teams to bolster the conference roster and not just grabbing defectors on the cheap, as the Big East has done.

Delany is very attuned to the conference building process. After having seen the Big East crumble, despite having numerous championship level basketball teams and great mid-level talent across the conference, it wasn’t enough.

To be a competitive college conference in the future, you must have strong football teams with at least two powerhouse teams, like Southern Cal and Oregon or Alabama and Louisiana State.

Undoubtedly, the Big Ten will always hang its collective hat on the University of Michigan, one of the most profitable athletic programs in the country.

Ohio State, Wisconsin and Michigan State also contribute a lot to the conference but more is needed if the conference wants to continue to compete for titles and media dollars.

Conference commissioner Delany is not going to admit that the major contributing factor to adding Rutgers is the East Coast media shares. Obviously, football and basketball championships aren’t exactly selling points for Rutgers.

College fans do not want to hear about media shares when it comes to conference expansion. In fact, it is probably the worst part of college sports, the inevitable eclipse of sport and business.

That said, I believe the Big Ten may have acquired the next gem of college sports, in Maryland.

Say what? Maryland? Yes. Maryland.

Maryland developed NCAA championship credibility in basketball under coach Gary Williams and as the Wedding Crashers movie-line goes, “Crab cakes and football. That’s what Maryland does.”

Over the next decade, I believe that we will be talking about Maryland football as a perennial power.

How? Think Oregon. Oregon since the mid 1990’s has become a true football powerhouse in addition to five Pac 8/10/12 Conference titles in basketball.

Ever since Oregon alumnus and Nike founder, Phil Knight, established Nike as the premier sports brand and began to funnel millions of dollars into Oregon athletics with the Knight Labs, Oregon has been a recruiters dream.

Between the state-of-the-art facilities and Nike’s brand identity, Oregon has been able to recruit blue chip talent that has translated into record success.

When I see Maryland, I see a budding Oregon. Maryland is the alma mater of Under Armour founder, Kevin Plank.

According to Forbes as of August 2012, Under Armour is a $10 billion corporation. They actually have gained on Nike in the North American market over the past four years.

Now, comparatively, Nike is a $50 billion corporation. However, Nike earns two-thirds of its revenue overseas, whereas Under Armour earns 95-percent of its revenue in the United States and Canada.

This might not matter to sports fans, but to those in the know, this is a huge deal. Market analysts at Market Watch, are predicting that if Under Armour can increase its global market-share by just 15-percent, you could be looking at an honest competition for Nike.

For the Big Ten, this means big games and big money. There is no secret that Nike and Oregon capitalize on the brand’s recognition when it comes to recruiting.

Under Armour is rapidly becoming the biggest equipment brand in college athletics and professional football. Under Armour has spent millions of dollars establishing athletic camps around North America, including hosting the premier high school football preseason camps.

Under Armour founder Kevin Plank currently sits on the Board of Trustees at the University of Maryland and has already committed millions of dollars to their business and athletic funds.

Between the improved facilities and brand identity, Under Armour is setting Maryland up for similar success to that of Oregon.

And, if things play out the way many market analysts predict, I think the future of the Big Ten Conference rests on Michigan and Maryland.

Geaux Tigers!

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Geaux Tigers!