Learfield IMG College is refuting elements of a Friday story in the Wall Street Journal, saying that publication inaccurately portrayed the company’s measures to weather revenue declines amid COVID-19. WSJ’s story cited sources “familiar with the matter” as saying that Learfield IMG College is preparing for a financial restructuring and that it has hired law firm King & Spalding for advice on renegotiating its debt. Those claims are false, Learfield IMG College said. The story made the rounds over the weekend in college circles and Learfield IMG College executives were busy the last few days responding to aspects of the report they considered inaccurate. WSJ has not altered its story online.
TAKING EXCEPTION: Learfield IMG College also took exception to a line in the WSJ story that said it is “on the hook” to make the guaranteed annual payments to its school clients. That will not be the case with all of its schools, the company said. Learfield IMG College has been in talks with its nearly 200 school clients to create new deal terms that would account for the loss of games and the uncertainty around the college football season. The WSJ story did point out that “Learfield has been trying to renegotiate its arrangements with universities.” They have talked about reducing the amounts of the guarantees or adopting a revenue-share model that potentially could provide the company with a cost-savings. Kansas State AD Gene Taylor has said the Wildcats agreed to shift their deal from a guaranteed annual payment to a revenue-share. The WSJ story also cited this from FactSet: Investors price Learfield IMG College’s $475M first-lien loan at around 72 cents on the dollar, which indicates concerns about repayment. A $75M second-lien loan is trading at roughly 48 cents.
