SBJ/April 21-27, 2014/CollegesPrint All
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The University of Alabama is set to capitalize on its success over the last five years by signing one of the nation’s most lucrative multimedia rights deals with Learfield Sports worth at least $150 million to $160 million over 10 years.
The extension of a long-term relationship between the Crimson Tide and Learfield will now run through June 30, 2024. Alabama,
College writer Michael Smith and Executive Editor Abraham Madkour talk about Alabama's lucrative deal with Learfield Sports, as well as Northwestern Mutual's presenting sponsorship with the Rose Bowl.
The new financial terms of $15 million to $16 million a year double Alabama’s guarantee previously and put the Tide among the top three schools in multimedia rights revenue behind Texas and Notre Dame, both of which have unique TV arrangements that boost their overall figure.
“A lot of things have changed since the last time we negotiated a deal,” said Bill Battle, Alabama’s athletic director. “This option gave us a chance to look around the marketplace and see how things look now versus five years ago. Alabama has been on a pretty good roll since then.”
The Tide has won three of the last five college football national championships, which drives up the value in Alabama’s property and provides the rights holder the opportunity to develop additional inventory.
“We’ve been there a long time,” Learfield CEO Greg Brown said of the relationship with Alabama. “In the early days of the relationship, football wasn’t as good and there were some challenges. But even then, the business did very well and we’re very confident in the long-term strength of the brand. When you think about Alabama’s stability and continuity, it’s almost unlike any other in college sports.”
Alabama decided to keep its contract with Learfield virtually the same, except for the increase in the annual guarantee. The only significant difference is that Learfield will not have rights to Alabama’s third-tier football and basketball games, which now are controlled by the SEC Network.
One of the reasons the deal is so valuable compared to other schools is because Learfield controls several rights that are not typically included in multimedia agreements. Those rights include concessions, pouring rights, isotonic beverage, seat rentals and merchandise, which combined can account for 25 percent to 30 percent of the revenue from the property.
Pouring rights, concessions and isotonic are usually sold by the school, not the rights holder. Learfield sold pouring rights to Coca-Cola, isotonic to Gatorade, and concessions to Centerplate, and those deals will continue, Brown said. Learfield’s other rights include traditional multimedia inventory like radio, corporate sponsorship, hospitality, print, signage and other advertising. The Tide does not plan to add alcohol sales inside the stadium, Battle said.
As part of the renegotiation, Alabama will make improvements to its concession areas and point-of-sale signage in Bryant-Denny Stadium by adding TVs and possibly some LED signage in the concourses. Those electronic additions will provide Learfield with new advertising inventory.
“That will make it look better,” Battle said. “The concessions under the stadium look pretty archaic. If you’re out there for any length of time, you lose touch with what’s going on with the game. The TVs will help that.”
Alabama football has won three of the last five national championships.
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Texas led the nation in 2012-13 total athletic department revenue at $165.7 million. Texas, which has its multimedia rights with IMG College, makes $15 million annually from ESPN for the Longhorn Network, while its more traditional multimedia rights generate close to $10 million, for a total of $25 million a year.
Notre Dame’s rights are splintered — NBC has home TV football, IMG College has radio, and its corporate sponsorship is sold internally. The Irish’s total multimedia revenue is believed to be in the range of $25 million to $30 million annually.
Comparing multimedia deals is difficult because what rights are included can vary from one deal to the next, but among schools with traditional multimedia rights deals and no network affiliation, Alabama’s new deal will make it the clear leader. Ohio State and Georgia each make close to $11 million a year from IMG College, but neither deal has as many rights as Alabama’s.
“Alabama was able to stay with its rights holder and got full market value,” Stultz said.
Learfield shares the Alabama contract with IMG College in a joint arrangement, but Learfield owns majority share of the deal and controlling interest.
IMG College has brought in a veteran Westwood One sales executive to spearhead its first national radio sales campaign.
Eddie Quagliariello comes to IMG College with 23 years of experience in national sales. As vice president of national radio sales, Quagliariello will be based in New York and report to Andrew Judelson, IMG College’s senior vice president of national sales.
College news: SBJ writer Michael Smith and Executive Editor Abraham Madkour talk about Northwestern Mutual's presenting sponsorship with the Rose Bowl, as well as Alabama's lucrative deal with Learfield Sports.
Sales have been handled locally by each school’s property in the past, IMG College said. Quagliariello will direct the company’s first effort to bundle that radio inventory and sell it nationally.
Each school property will continue to sell locally as well. It’s uncertain just how much of the ad inventory will go to national sales.
“IMG is looking to develop assets in college football and basketball, and it’s something where they already have the infrastructure in place,” Quagliariello said. “My job is to sell on a national level and to create a national advertising platform from this inventory we have.”
A national radio sales division is not unlike the national sponsorship sales unit IMG College created in 2011. Since then, IMG College has signed the likes of Lowe’s, Hershey, UPS, Hyundai, Keurig and MillerCoors to national sponsorship deals.
While radio inventory is often part of those national sponsorship deals, having a dedicated national radio sales executive will position IMG College for more radio-centric deals, Judelson said. Creating these types of national radio advertising deals is nothing new to Quagliariello. At Westwood One, he sold inventory from the NCAA, NFL, Olympics, Masters and other properties.
With the national ad network Quagliariello can create from IMG College’s 79 schools, he can deliver “frequency and tonnage,” he said. Judelson added that Quagliariello’s experience “developing new business through packaging radio inventory” will help IMG College create its first national radio sales platform.