SBJ/September 18 - 24, 2006/This Weeks News

Host buys Nebraska rights holder

Host Communications has acquired Pinnacle Sports Productions, which owns the University of Nebraska’s multimedia rights, in a deal expected to be announced today.

Pinnacle Sports Productions has a deal for
multimedia rights to Cornhuskers football
and other sports through 2011.
Gretna, Neb.-based Pinnacle sells, produces and distributes the radio broadcasts for the Cornhuskers’ athletic teams, as well as the coaches’ TV and radio shows and a weekly sports-talk show distributed statewide. Pinnacle’s contract with Nebraska, which will transfer to Host, was extended in 2003 and runs through July 31, 2011, at a total value of $28.4 million. Pinnacle and Nebraska have been partners since 1996.

With the acquisition, Host now owns the marketing rights to Arizona, Florida State, Kentucky, Michigan, Oklahoma State, Tennessee, Texas and the Southeastern Conference, in addition to the Cornhuskers.

“I think this is going to be great for us,” said Tom Stultz, Host’s president and CEO. “When you look at our lineup of schools, this fits perfectly. It’s a large school that dominates the state and the region. There’s an incredible passion for Husker sports and virtually no competition from pro sports.”

The deal marks Host’s first acquisition since the formation of its new parent company, Triple Crown Media Inc., nearly two years ago. Stultz said he and Paul Aaron, Pinnacle’s president, began talks in April that centered on shared business opportunities. The more they talked, the more Stultz quizzed Aaron on his exit strategy.

When Stultz discovered that Aaron wanted to spend more time on the 18 acres he owns at Big Sur on the coast of California, Stultz thought he might have a chance to buy Pinnacle.

Host acquires a network of 38 radio affiliates, 25 of which are in-state. In addition to the radio rights, Host picks up the rights to sell print ads in the game programs, advertising on the coaches’ shows and sponsorships on Nebraska games that are televised by FSN.

Stultz wouldn’t disclose terms of the deal, but he said the transaction included cash and Triple Crown Media restricted stock.

Stultz said he sought the blessing of Nebraska athletic director Steve Pederson before completing the deal, even though it was not contractually required.

“We wanted the green light from Steve,” Stultz said. “We wouldn’t have done the deal if he was reluctant. Our goal is not to be with Nebraska just for the remainder of this contract. We want to be there for the long term.”

Nebraska will become Host’s third- or fourth-largest revenue producer, Stultz said, but at the end of this contract he hopes to construct a new, more comprehensive deal that will bundle all of the rights, including corporate partners and signage. Within the last two years, Host has negotiated similar all-encompassing deals with Kentucky, Texas and most recently Tennessee.

Host plans to retain all of Pinnacle’s employees and talent, Stultz said.

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