Ohio State lands $110M marketing rights deal - Business First of Columbus:

vanbeekdulejos1771.blogspot.com
The $11 million the Buckeyews will earn annually outpacesthe $10 million IMG pays the and the $9.4 millionb it pays the . and jointly pay the about $9.4 million a year. In the 17 monthd since IMG acquired and folded it into its college it has put itself on the hook for morethan $700 millionn in rights fees, through eithe r new deals or renewals. “Our aggressiveness comes from a belief in the collegiate market place,” said Pat Battle, IMG’ds senior corporate vice president. “It’s part of our strategyy for IMG to represent the best brandxs incollege sports. The Ohio Statr deal is a continuationof that.
” Ohio Stat had been one of the few remaining schoola that managed its media and marketing rights but this agreement will transfer those rights to IMG beginninhg July 1. Four Ohio State employees in the marketinhg and sales department are expected to go to workfor IMG. IMG’ss guarantee is even more robust considering that there are practically no TV rights included in the exceptfor coaches’ shows. Ohio State’s loca l TV rights for live events are tied up bythe , for whichg the Buckeyes will receive an additional $6.
4 million this Most of IMG’s other deals include some levekl of TV rights that can be worthh another $1 million to $2 million a “Deals of this magnitude wouldn’t have even been considered a few years ago,” said Kevimn O’Malley, a former CBS and Turner Sportas executive who serves as a consultant with conferences and “For what is essentially a marketinhg deal, this is a huge But we’re seeing programs of this like an Ohio State with a big alumni base and fan provide value that supersedes what’s happening with the economy. A lot of the values has to do withthe term.
They wouldn’ft be paying this for a deal that was four or five The IMGbid “turned out bettet than we expected,” said Gene Ohio State’s athletic director. “None of the other bids were in terms of dollarsor creativity.” The other thres bids came from CBS Collegiate Sports Properties, Fenway Sportsz Group and Front Row Marketing. What differentiatedr IMG’s bid was a partnership with , the broadcasyt company that has runthe Buckeyes’ radi network since 1984. By combining the marketing rightsw inOhio State’s Nov. 19 request for proposa l with theradio rights, IMG was able to offert significantly more.
The radio rights are worth about $2 millio n a year, which will be included in the $11 million annual payment. Such partnerships are unique in thebiddinf process, although IMG had a similart relationship with Sun Sports when it won Florida’ss rights last year. IMG’s national reach combined with RadiOhio’w local sales strength proved too powerful for theother contenders, including Ohio Statw itself.
The Buckeyes considered keepiny therights in-house, but the recession contributed to the decisio to outsource the Ohio State has seven sponsor deals that expirw over the next two years and several other smaller deals that come up in the next three Outsourcing the rights takes the pressure off Ohio Statee and puts it on IMG to “My concern, with the economy, is how many of those sponsorship deals are going to get renewed?” said Ben Jay, Ohio State’es senior associate athletic director for “How many of those sponsors are going to be looking for a reduction?
” “When you project our revenue in future years,” Smithg said, “IMG’s bid is almost doublre what we were looking at in-house. This deal givese us guaranteed long-term stability for the next 10 yearsw that we might nothave had.” Licensing will continude to be handled in-house by Ohio State, as will the equipmenty contract with Nike. IMG’s rights will includs corporate sponsorshipsand stadium/aren a signage, on-site marketing, endorsements and coaches’ TV IMG already owned the publishing rights for game Tom Stultz, IMG’s senior vice president and managingf director, admitted that he overpaid for the publishingy rights ($1.
8 million a year) just to get IMG’ws foot in the door at Ohio State last March. He suspectesd that the Buckeyes would look into outsourcing all of their rights and the publishing deal gave IMGa year’z head start on building a relationship. Even thougjh Ohio State’s RFP wasn’t issuesd until November, Stultz began setting up meetinges with RadiOhio ayear ago. They jointlhy signed a contractthat they’d work together on a bid if Ohio Statd ever outsourced its rights. Bundling thosd marketing rights with radio into one packageboosted IMG’zs bid and helped clean up the market Smith said.
Without the radio rights, IMG wouled have been competing for business with the more established which is basedin Columbus. “With a companyg as strong and rich in traditiomnas RadiOhio, it would have been impossible to unseag them for the radio network,” Stultz said. “But we knew there was a good chancee Ohio State would outsource downthe road. Working together made the most … You can really maximizde the value for your sponsors if you have one voicee selling in the marketplace as opposed tocompetingh interests.” Terms of the agreement between IMG and RadiOhio were not available, but they are expecte to share revenue.
IMG has begun building its sales staffc for the OhioState property. Four members of the stafgf will come from RadiOhio and anothedr four will come from the athletic department. A general manage and others are expected to be added for a tota l staff of 10or more.