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Volume 21 No. 1


Learfield Sports, one of the first companies to mine the collegiate multimedia rights business and the last major competitor to IMG College, has hired several outside agencies to raise capital for new projects, among them a Big 12 channel.

The aggressive push by Learfield to beef up its financial position reflects the company’s charge to grow into new revenue-generating areas and combat IMG College, which has built the largest multimedia rights company in the space through nearly $300 million worth of acquisitions since 2007.

Learfield could take on equity investors in the company or, if the offer’s right, sell the company outright. While ownership insists that selling the company is not the first option, no scenarios have been taken off the table.

“We’re looking at all of our strategic alternatives to expand the company,” said Greg Brown, Learfield’s president and CEO. Clyde Lear, 67, who founded the company in 1972, remains the majority owner, while Brown and three other executives also have a stake.

To help Learfield explore the marketplace, it hired Lazard Middle Market, which specializes in working with mid-cap companies on mergers, acquisitions and restructuring, and KPMG, another advisory firm, to raise capital and determine the value of the company.

The consultants are evaluating whether major media players — Comcast, Time Warner, Fox — or private-equity firms might be interested in investing.

Learfield has several initiatives that need funding and are central to the growth of the company, including a Big 12 channel, expansion of Learfield’s national sales force, development of its digital team and new concession projects on some of the campuses where it has rights.

In addition to Lazard and KPMG, Learfield has brought on media consultant Chris Bevilacqua and Evolution Media Capital, the firm formed by CAA to work with media companies on raising capital and restructuring. Bevilacqua and EMC are teaming with Learfield to create the plan for a Big 12 channel, which probably would involve eight of the 10 teams in the conference.

Texas will launch its own network this fall with ESPN, while Oklahoma is working on its own channel as well.

If Learfield Sports’ ownership changes, it would again shake up the college marketplace, which has undergone significant consolidation since IMG entered the space in 2007 and then acquired Collegiate Licensing Co., Host Communications and ISP Sports in separate deals to form IMG College.

A private company with corporate offices in Plano, Texas, and Jefferson City, Mo., Learfield engaged in negotiations with ISP in 2009 about a merger, but those negotiations didn’t produce a deal and Learfield remains the main rival to IMG College in the multimedia rights business. Learfield, with a staff of nearly 200, maintains that its college business is profitable in an industry that demands heavy guarantees to its client schools and returns a low margin.

If the company did decide to sell, industry insiders say it’s hard to know what the asking price would be, but IMG bought ISP for $100 million and Host Communications for $74.3 million, which provides something of a gauge for interested parties.

Learfield has agreements with about 50 universities, most notably Alabama, Oklahoma, Penn State and North Carolina, as well as three conferences (Big Ten, Missouri Valley, WAC), Rupp Arena and the Louisville Arena Authority. It is especially strong in the Big Ten and the Big 12, where it owns the rights to the majority of those schools.

IMG College owns the rights to more than 80 schools and has aggressively been building a national sales team to exploit those rights. Upon its acquisition of ISP last year, IMG College said it had the critical mass of schools to form a national sales team and sell across all of its collegiate properties.

Whether IMG would want another 50 schools through the acquisition of Learfield is unclear and could depend on Learfield’s price, industry insiders say, but they all agree that IMG will talk to Learfield about an acquisition at some point, if it hasn’t already.

Between Learfield and IMG, they have nearly all of the schools from the six power conferences.

CBS Collegiate Sports Properties (LSU, Maryland, Virginia, Utah) and Nelligan Sports (Louisville, Marquette, Rutgers) are the other players in the multimedia rights space, and it’s uncertain if either would have an interest in Learfield.