The evolution of IMG College

Since WME’s acquisition of IMG College in 2014, the collegiate marketing powerhouse has been all about transition — transition in leadership, in faces, in message and in approach.

The IMG College of George Pyne and Ben Sutton, the architects who built the college division, has shifted to the IMG College of Jason Lublin, a relative newcomer to the college space, and Tim Pernetti, a former athletic director now on the other side of the table.

The evolution over the past 28 months has begun to show some dividends, with a mix of high-profile extensions at blue-chip schools rubbing against the loss of multimedia and licensing rights at several colleges. The uneven business results have taken chunks out of the bottom line, leading to an inability to grow its profit since 2013.

A look at the company’s performance in 2016 reflects the challenges in a changing and increasingly competitive college marketplace. During a stinging five-week stretch in February and March, IMG College lost the multimedia rights at longtime partner Auburn, rapidly growing Central Florida and Villanova, which a month later won the men’s basketball national championship. Auburn and Villanova opted for Fox Sports and its growing portfolio of schools, while UCF took its rights in-house.

More recently, California chose not to renew its deal, signing instead with IMG College’s chief rival, Learfield, and Brigham Young decided against a long-term extension for now as the school determines whether it will bring its rights in-house. On the licensing side, IMG’s Collegiate Licensing Co. has endured similar setbacks.

The loss of rights and corresponding revenue raised questions about IMG College’s fitness under WME’s ownership to maintain its position as one of the two industry leaders against an expanding field of competitors, ranging from Fox to JMI Sports to Van Wagner Sports & Entertainment. While Learfield has been aggressively adding schools and acquiring complementary businesses, IMG College at times has struggled to keep the rights it has, as schools look for richer deals or different in-house models.

In recent months, however, there have been signs that IMG College has stabilized, signing long-term multimedia rights extensions at big-brand schools such as UCLA, Georgia, Oregon and TCU, among several others.

Now, as it enters its third college football season as a WME business, IMG College’s leaders say they have refined their message to athletic directors with an emphasis on the entertainment and talent assets that are core to the Hollywood agency. And they’re discovering new ways to work together, like the Brad Paisley concert series, that go beyond the traditional multimedia rights.

Some industry insiders say the new-look college division will only get better as it discovers innovative ways to differentiate itself with WME’s entertainment assets. Others simply look at the results — specifically the loss of rights at a handful of major schools — and see a tough road ahead.

But those challenges haven’t changed WME’s bullish stance on the college business, which was the centerpiece of the IMG acquisition in 2014.

“We have evolved as a company throughout the integration process,” said Lublin, who carries the dual titles of IMG College president and WME-IMG global COO. “I feel really good about our senior management team and the culture we are creating. People are starting to look at our college business differently. I think part of that is the WME influence and part of that has been our focus throughout the integration on making sure the school relationships come first.”

If Lublin and Pernetti have their way, they’ll redefine the meaning of multimedia rights. That’s the change in message and value they’re trying to bring to the collegiate marketplace.

By making the assets from WME available to its college clients, Lublin and Pernetti say IMG College can move beyond being a rights holder to being a programmer for weekends on college campuses, where it is uniquely positioned to leverage the latest trends in entertainment and events.

If it can do that, IMG College reasons, it will benefit from creating deeper relationships with school partners.

“It’s a very different company, by way of evolution,” said Pernetti, IMG College’s president of multimedia and a former AD at Rutgers. “We’re two-plus years later and the college division has evolved into something better. It was in a great place and doing well when it was acquired, but now we have evolved and a lot of that has to do with access that we have with WME.

“As we look at what’s changed, we have a lot more to offer, not just as a sales company, but as a solutions provider.”

Country performer and WME client Brad Paisley made a stop at Auburn as part of his nine-campus concert tour last season. He’ll do another tour this year. Photo by: BEN ENOS

At Baylor, WME-IMG is working with the school to create a free pregame concert series. WME acts will perform 2 1/2 hours before kickoff just outside McLane Stadium. WME is playing a similar role at Florida State for the school’s long-running Friday night block party by booking the performers.

WME also is working with its IMG College clients on one-off concerts as well, such as an Eric Church show at East Carolina and a coming Tim McGraw show at Air Force.

These events are in addition to the second annual Paisley concert tour on college football weekends.

Creating these entertainment events also gives IMG College more premium inventory to sell. Frontier Communications bought the presenting sponsorship to Paisley’s tour, and in the process added sponsorships at 10 schools.

“Schools are looking for more,” Pernetti said. “A broader offering than just multimedia rights will help us in the long run. Schools are not just looking for someone to sell. Having the access we have to WME makes our value proposition completely different. We have access to things our competitors don’t.”

The new messaging from IMG College has resonated with athletic directors like TCU’s Chris Del Conte, who recently extended the Horned Frogs’ deal five years because he wants to tap into WME’s entertainment expertise. He was influenced by WME-IMG’s aggressive moves to acquire the PBR and UFC.

“They’re making big, bold decisions and I love that,” Del Conte said. “There’s a huge entertainment component to what we do — we run a business based on people’s passion and emotion. I can go to WME-IMG and ask them how to approach certain situations. They’ve got the pulse of the entertainment industry and we’ve got the pulse of our fan base. What they do is open our eyes to a lot of things.”

Many ADs, though, still see multimedia rights as the radio network, the corporate sponsorship program and signs in the venues, the kind of hard inventory on which IMG College and Learfield built their businesses and which typically drive rights fees for the schools.

Oregon is one of several schools to extend with IMG this year, but AD Rob Mullens said the entertainment options were secondary in his thinking to the core multimedia rights.

“There will be other opportunities to build on the core rights and we did talk about that,” Mullens said. “But it didn’t weigh heavily in our decision. Concerts are ancillary things. Sponsorships really are the core.”

IMG College’s rival in the space, Learfield, has gone through its share of changes as well.

At some point this fall, Learfield likely will be sold by its primary owner, Providence Equity, for more than $1 billion, based on 2017 projected earnings before interest, taxes, depreciation and amortization of $100 million. Learfield has made 10 acquisitions in the past two-plus years, picking up businesses that gave it new competency in areas like digital, LED signage, licensing and branding.

The acquisitions also sparked unprecedented growth at a time when its rival was struggling. IMG College has not grown its profit since 2013 EBITDA reached $66 million.

The side-by-side comparison doesn’t tell the whole story, according to IMG College. It can be argued that the different direction in earnings is understandable, given that one company — Learfield — was boosting its numbers in preparation for a sale, while the other — IMG College — was going through a merger.

WME-IMG would not disclose its current financials, but the company said the college division remains one of its largest businesses. While the merged WME-IMG “is bigger and clearly more diversified, we continue to look for ways to leverage what we have — music, food, fashion, comedy, etc. — in college,” Lublin said.

Jason Lublin (left), with WME-IMG Co-CEO Patrick Whitesell, has redefined IMG College’s business. Photo by: WME-IMG

The restructuring of WME-IMG also has led to changes in personnel.

Earlier this year, Kelli Hilliard, Mike Wolfert and Janeen Lalik left, taking 53 years of experience and relationships in the college space with them. Roger VanDerSnick, the chief sales and marketing officer, also departed, as did Hunter Nickell, formerly senior vice president for partnership marketing.

Just last week, Bruce Siegal worked his last day as CLC’s general counsel, ending a 30-year career with the licensing agency as WME-IMG restructures its legal department.

The transformation of the company isn’t complete, either.

Lublin, a WME veteran, isn’t expected to be IMG College’s president for the long term. The original plan called for Lublin to shepherd IMG College through the integration into WME. What happens after that remains to be seen — there’s no clear timeline on how long he’ll stay in that chair, while also overseeing WME-IMG’s day-to-day business as global COO.

Most industry insiders believe Lublin will hand the reins to Pernetti when the time comes, but there’s nothing definitive planned yet. For now, both are working on all aspects of the college business.

IMG College, meanwhile, brought on a noted dealmaker, Dan Shell from Fox Sports, in February to work on everything from school relationships to sponsorship sales. Shell was part of IMG College until 2012 when he moved to Fox, where he led it to big multimedia rights wins this year at Villanova, Michigan State and Auburn before rejoining IMG.

While the faces have changed and the architects of the original IMG College have departed, the current leadership says its recent string of extensions shows the company’s new message is working.

Despite 2016 getting off to a rocky start, IMG College recovered with extensions at Oregon, Tulane and UCLA earlier this year, and more recently reached agreements to extend Air Force, Georgia, Wake Forest, Western Kentucky and TCU. An extension at South Carolina is in the works, and St. Mary’s (Calif.) is a new IMG College property.

The extension at Georgia was negotiated by IMG and JMI Sports as part of their new joint venture.

Oregon and Tulane, specifically, were thought to be lost causes, industry sources said, but Lublin and Pernetti were instrumental in getting both schools to stay with IMG College. The Ducks took a long look at partnering with the Pac-12’s new multimedia rights business before signing with IMG College for six more years.

Meanwhile, Tulane’s new athletic director, Troy Dannen, came from Northern Iowa, where he had spent eight years working with Learfield. But Dannen liked what he heard from IMG College and agreed on a new deal that will pay the Green Wave a 50 percent increase in its annual guarantee.

“From my perspective, I see IMG College doing things right,” Dannen said. “I see them making investments in our property and treating us very much like a partner instead of a client.”

Oregon’s Mullens was able to get the rights holder to agree to a six-year extension instead of the 12 years IMG initially wanted.

Lublin teamed with a colleague, seasoned TV executive Karen Brodkin, formerly of Fox Sports, to negotiate with the Ducks. It marked one of the first times that Brodkin, president of IMG’s business affairs, got involved in a traditional multimedia rights deal. California, her alma mater, was the other.

Those shoestring catches at Oregon and Tulane indicate that IMG College is correcting its course and clarifying its message, industry insiders say, as Lublin gains a greater understanding of the college space.

Mostly, they show the company is willing to pay for big brands, something that didn’t appear to be the case at Auburn, Cal or Villanova.

Losses like that are hard to take, not only because of their impact on the bottom line, but also because it used to be extremely rare for schools to change rights holders. When Kentucky shocked the collegiate business world by dropping IMG College and going with JMI Sports in 2014, it marked the first time a school from the power five had switched rights holders since 2009.

“Look, this process has been a learning experience, but I really think our message is resonating,” Lublin said. “We don’t ever want to lose a school, but we also have to do what’s right for our business. … We’re in this for the long term; we’re long-term operators and builders, and you’ll continue to see us being very active.”