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Is deal just start of IMG college play?
Published May 7, 2007
College marketing and licensing have typically operated on separate turf, but IMG’s acquisition of Collegiate Licensing Co. last week might be the first indication that a company is poised to bring all of those rights under one roof.
|CLC has the rights to 155 colleges and
universities, nine conferences, the BCS
and the Heisman Trophy.
CLC, the company founded 26 years ago by former Tennessee football coach Bill Battle, essentially created collegiate licensing, an industry that has grown to $3 billion in annual merchandise sales. CLC takes credit for about 75 percent of that.
But the merging of the considerable licensing muscle at CLC and IMG is just the beginning of IMG’s immersion into college sports, say industry analysts, some of whom anticipate the creation of a shop that’s capable of handling licensing, marketing, promotions and multimedia rights.
An important piece for IMG is teaming with Battle and his son Pat, CLC’s CEO, because of the wealth of university contacts they’ve made and doors they might open.
The acquisition, believed to be worth $130 million to $140 million, raises the question: What’s next?
“This is clearly IMG’s entree into the collegiate marketplace,” said Rick Jones, owner of FishBait Marketing, which represents the associations for college football and basketball coaches, as well as athletic directors. “I think this is the start to consolidate the market.”
For his part, IMG President George Pyne said his focus will be on merging the licensing assets of IMG and CLC.
“If other opportunities present themselves down the road, we’ll look at them at that time, but all of our energy is going into CLC and the licensing business,” said Pyne, who has compared the fan avidity and loyalty in college sports to NASCAR, where he spent 11 years in various executive roles.
Analysts agree that if CLC moves beyond licensing, as Pat Battle suggested last week, university multimedia rights would be a logical space to enter. Among the most prominent rights holders are CBS Collegiate Sports Properties, Host Communications, ISP Sports, Learfield Sports and Nelligan. They typically control the marketing rights for universities, distributing game broadcasts, selling advertising and forming corporate partnerships.
A school’s rights holder and the licensing agent usually don’t cross paths, said Bill Battle, and as a result “we’ve left a lot of money on the table.”
Often when CLC has attempted to move onto the marketing side with a promotional idea that involves licensing, it was seen as an infringement on the rights holder. For example, when CLC and Learfield have tried to work together on programs at the University of Oklahoma, “it’s been a struggle sometimes,” said Athletic Director Joe Castiglione. “I think one didn’t want to let the other on his turf.”
“The lines are blurred, especially when you’re talking corporate and promotional sponsorship,” said Kevin O’Malley, a TV consultant who assists with the Big 12 and Southeastern conferences, among others. “While colleges are better at getting their piece of the pie, they still have the biggest white space above them.”
That’s where consolidation of those rights might lead to better monetizing of university marks, especially in the area of promotional licensing. As Battle grew his business, he studied NFL Properties and saw how promotional licensing accounted for about as much revenue as merchandise licensing. The difference is that all of those rights are available at one place, whereas the fragmented world of collegiate marketing and licensing makes acquiring those rights sometimes frustrating and confusing, Bill Battle said.
Conference rights typically don’t include university or NCAA rights. NCAA rights don’t include conference or school rights.
“The job that’s been done licensing merchandise at the retail level is outstanding,” Jones said. “Promotional licensing is in its infancy, at best. You know, collectible cups, gift-with-purchase, a university mark on a bucket of chicken, there’s a lot of upside in that area.”
IMG’s strength in both licensing and media helped optimize events it owned, such as the Skins Game, and Pat Battle already foresees ways IMG and CLC can work together.
|IMG will focus on collegiate licensing.|
Battle envisions a made-for-TV golf event that pairs a PGA Tour player with a college player from the same university. Former Florida player and PGA star Chris DiMarco, for example, might team with a current Gator player and compete against other pro-am teams representing other schools.
“You look at the vertical operation IMG has and apply it to the fragmented college market … it generates the kind of ideas for the college market that we’ve never had before,” Pat Battle said.
If IMG ultimately decides to move in more of a marketing direction, it could create a rights-holder arm of CLC to acquire university rights or it could buy one of the rights-holder agencies. Officials at Host, ISP and Learfield all said that they had not been contacted by IMG and had no interest in selling. Learfield and ISP are private, while Host is public.
“Things like this always create a buzz,” said Ben Sutton, founder and CEO of ISP Sports, which holds the multimedia rights to nearly 40 universities, four conferences and two bowl games. “I’ve known George a long time and he’s expressed an interest in this space before, but that’s no different than 20 other people I could name you. I can tell you that selling is not on my radar.”
Atlanta-based CLC has the rights to 155 colleges and universities, nine conferences and 16 bowl games, as well as the Bowl Championship Series and the Heisman Trophy. Its university deals average seven years in length. Its lone collegiate licensing competition is Licensing Resource Group, which owns the rights to a handful of BCS schools, the Big East and Pac-10.
IMG’s purchase includes ownership of Licensing Partners International, which owns the rights to the PGA Tour, Churchill Downs, Canadian Football League and NASCAR’s Petty Enterprises. LPI President Wesley Haynes said it was uncertain if LPI’s name will change to IMG, which owns licensing rights to Wimbledon, Major League Baseball, the USGA and Tiger Woods.
Pat Battle will work with IMG’s licensing chiefs, Tim Rothwell and Bruno Maglione, but will report to Pyne. LPI’s Haynes will report to Rothwell and Maglione.
While many analysts wondered if the sale represented retirement for Bill Battle, 65, he says he’ll maintain an active role for the foreseeable future.