Illinois State University Athletics recently outsourced its comprehensive multi-media rights to Learfield Sports Inc. The Plano, TX based company will pay ISU $19.8 million dollars over 10 years for the rights to manage, market and sell Redbird athletics signage, digital, radio play-by-play and coaches shows.
The partnership breaks down to a cash and trade agreement that escalates in payments over the ten year contract. In the first year, Learfield will pay ISU $1.2 million dollars in cash, and in-kind gifts totaling $375,000 dollars.
The cash amount is just under $300,000 more than the department is currently bringing in. ISU Athletic Director Larry Lyons said the in-kind amount is a baseline figure, matching ISU's current sponsorship and trade agreement dollar totals.
Over the life of the 10-year deal, Learfield is banking on its ability to bring into its own coffers much more than the average $2 million dollars per year it is giving ISU.
"And above that ceiling there are sales, where we'll split that. Now that's not going to happen in the first few years. Their goal is to drive the business so that they get to that, which means they're profitable, we're profitable, win-win for everybody that way. And every year is different because of the stair-step" said Lyons.
Illinois State is the eighth of what had been 10 Missouri Conference schools to partner with Learfield (Wichita State will join the American Athletic Conference this fall). Lyons said the school's ability to sell its multi-media athletic rights well on its own, especially over the past five years under Director of Corporate Partners Andrew Bond, made them reluctant to outsource those rights. Now that ISU has reached what it consider a sales ceiling under its current structure, it was time to move. And Lyons said because Bond was able to nearly double sponsorship and other media rights over the past five years, ISU was in a much better position to negotiate with companies including Learfield.
"I think the one thing that helped us was being patient," said Lyons. "Had we done this six, seven, eight years ago, the values we were producing were lower, so the contract for us might have been lower. Now that we have produced higher values locally on our own, I think we've seen that return come back to us in this contract. Also, the brand name of Illinois State has gotten stronger over the last several years."
Lyons said Learfield will be able to tap into accounts other than local powerhouses State Farm Insurance and Country Companies that ISU and most schools aren't able to access on their own. Learfield will also have three employees embedded in Redbird Arena.
"So in essence, they are with us every day of the week, even though their job is to work for Learfield and sell Illinois State through Redbird Sports Properties. We will make sure the relationships with our local current sponsors are solid and make sure the transition goes well. And Learfield's going to come and say 'let's try something.' And we'll say 'great let's try it,' or 'maybe we don't want to do that' because of the impact it would have on a current sponsor. So we'll be able to have those kind of dialogs with them moving forward." said Lyons.
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