SBJ/December 5-11, 2011/Marketing and Sponsorship

Shamrock buys majority stake in Learfield

Too often in the last three years, Learfield Sports encountered new business opportunities that required resources it didn’t have.

Learfield, a pioneer in the collegiate marketing industry, wanted to fund a new Big 12 channel, expand into ticketing sales and create more digital content, but instead the company found itself limited by a business that demands huge guarantees to its schools against thin margins.

Needing capital to grow, and after searching for a buyer for more than a year, Learfield finally found it last week in Shamrock Capital Advisors, a Los Angeles-based private-equity firm that has agreed to buy a majority stake in the company. The deal was finalized last week and an announcement is expected this week.

Learfield owns the multimedia rights to 48 schools, most notably blue-chippers Alabama, North Carolina, Oklahoma and Penn State, as
well as the Big Ten and Missouri Valley conferences, making the company one of the two most prevalent college rights holders, along with IMG College.

The new capital from Shamrock will push Learfield to enhance its current lines of business while developing new ones, either through acquisition or its own initiative.

“It’s a substantial move for the company,” said
Learfield owns multimedia rights to 48 schools, among those being powerhouse programs at Alabama, Oklahoma and North Carolina.
Photos by: GETTY IMAGES (3)
Greg Brown, Learfield’s president and CEO. “We’ve been in business and essentially had the same ownership for 40 years, so this is an important step for the company. From a practical standpoint, this will provide us with the resources that we wouldn’t have had otherwise.”

Terms of the sale were not released and it’s uncertain what percentage of the company Shamrock controls, except that it’s a “significant majority,” according to Brown.

ISP Sports, a company with similar college rights, sold for $100 million last year to IMG College. In a separate deal in 2007, IMG College bought Host Communications, a smaller rights holder, for $74 million.

There had been some discussion about Learfield and IMG College merging to form an even greater national college sales platform, but those talks never progressed to a serious stage, according to industry sources.

Brown will remain president and CEO, and other senior managers will continue in their current roles. The company intends to specifically grow its national sales staff, and no reductions are expected, Brown said.

Learfield properties

Alabama
Army
Boise State
Bowling Green
Chattanooga
Clemson
Colorado
Fresno State
Idaho
Indiana
Iowa
Iowa State
Kansas State
Louisiana Tech
Maine
Memphis
Miami (Fla.)
Minnesota
Mississippi State
Missouri
Montana
Montana State
Nevada
New Mexico
New Hampshire
North Carolina
Northern Iowa
Northwestern
Oklahoma
Oklahoma State
Oregon State
Penn State
Purdue
San Diego State
San Jose State
South Carolina
South Dakota
South Dakota State
Southern Illinois
Stanford
Texas A&M
Texas Tech
Toledo
Tulsa
Utah State
Wisconsin
Wyoming
Xavier

Shamrock Capital investments

Harlem Globetrotters
INgrooves
K2 Towers
Learfield
Media Storm
Mojiva
Publishing Group of America
Screenvision
Thought Equity Motion
Triad Broadcasting

The sale, which was announced to employees late last week, culminates an 18-month re-evaluation of the company by its ownership group, which included founder Clyde Lear and partners Roger Gardner, Andy Rawlings, Stan Koenigsfeld and Brown.

The biggest change is that Lear will go from being a majority owner to a significantly smaller stake.

Lazard Middle Market advised Learfield on the deal and Chris Bevilacqua, who also has worked with the Pac-12 on its new network, consulted as well.

Learfield also worked with Tim Irwin, an author and business consultant, on a strategic plan for the company’s future. Irwin wrote “Run With The Bulls Without Getting Trampled” and “Derailed.”

A five-person board will be formed to oversee the company’s management, with three of the positions going to Shamrock, one to Learfield’s Brown and another to an independent director. At least one of Shamrock’s board positions will be occupied by Will Wynperle, a partner with the firm.
In his message to the 400-plus employees in Learfield’s sports division, Brown emphasized that there would be minimal disruption and that no offices would be closed because of the sale.

“It was critical for us to maintain the culture of the company and the leadership,” Brown said. “We’re going to have that luxury, kind of like having your cake and eating it, too.”

Learfield, which was founded in 1972, was a pioneer in cultivating the collegiate marketing industry. It began by broadcasting college games on the radio and eventually moved into the sale of sponsorship, signage and promotional rights at its client schools.

Over the years, Learfield broadened its college business into concessions in a partnership with Levy Restaurants and naming-rights sales with its Team Services division. Learfield also owns the rights to inventory at Rupp Arena in Lexington, Ky., and the KFC Yum! Center in Louisville, Ky.

But as schools looked in recent years to outsource more of their business, such as ticketing sales and other new media initiatives, Learfield couldn’t accommodate the business opportunities that could conceivably grow its business.
Learfield, which owns the rights to seven of the 10 schools still in the Big 12, had been involved in talks with many of the schools about forming a conference channel, minus Texas and Oklahoma. Texas has its own school-branded channel already and Oklahoma is planning to launch one in 2012.

But subsequent defections by Learfield schools Texas A&M and Missouri to the SEC have thrown those plans onto the back burner. Brown said there remains a keen interest in developing more content, which could run on school digital channels, like those at Kansas State and Missouri, or on a TV channel like the one being planned at Oklahoma.

“We need to be able to monetize the content that we have access to,” Brown said. “Day-to-day changes in the company will be subtle, but looking through a longer lens, this new financial bandwidth will provide more opportunities to develop digital content, expand our national sales team and further develop ancillary businesses. An organization like Shamrock provides the financial resources to grow those businesses.”
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