I woke up yesterday to read the latest article in the Sports Business Journal on the outcomes of the potential IMG and Learfield merger (‘Anything You Want in College’) where they address the many different questions currently on the table for sponsors, fans, and schools. Many of these topics were addressed last week in our article on CollegeAD.com, but they brought up some interesting aspects as to what brands and media buyers may experience from a Super Rights Holder.
They offered a quote from Adam Dettman who stated the merger should overall help brands, but from the feedback, I have been given and the perception from brands I have spoken with over the last six days, it couldn’t be further from the truth!
Since the announcement was made, I have spoken off the record with multiple leaders who are responsible for national and local media buying market around the collegiate sponsorships space. These brands and agencies total annual spend is north of $100 million annually and NOT ONE OF THEM IS EXCITED FOR THE POTENTIAL MERGER!
Although these brands and media buyers acknowledge a ‘one-stop shop’ will make their front-end negotiation process theoretically easier, they have voiced the following concerns about the setup of a Super Rights Holder:
Lack of Negotiating Power
If the Super Rights Holder merger goes through, they will label themselves as the ‘one stop shop’ for everything college as eloquently mentioned today by the Sports Business Journal.
However, is this a good thing for brands?
In the past, a brand could negotiate with National Sales at Learfield or IMG to cherry pick what locations and schools they would receive for the best price.
Now if the merger is approved, there would be one person controlling these negotiations and may be inclined to develop a take-it-or-leave-it offer to brands.
If the Super Rights Holder requires brands to negotiate with the National or Regional sales offices as opposed to local schools they will be the only dog in town. They can force a brand to buy multiple brands at the exclusively level when they may only want one.
For example, BRAND X may be forced to buy the exclusive Luxury Auto Category at both Michigan and Ohio State when the brand only wanted Ohio State. This category would most likely be between $1-1.5 million dollars annually at a POWER 5 top tier program and can drastically affect spending for a brand.
This practice is already being attempted by regional sales, but with local General Managers worrying about their individual schools, this tactic has been less effective. Currently, a brand could just negotiate with one school as the focus of a strong local General Manager is generating top dollar for their school’s goal. If what was mentioned in our last article occurs in the form of consolidation of property leadership, this leverage will be limited and prices will surely rise. What the Potential IMG and Learfield Merger Could Mean for Schools.
Problems with Activation
Unlike a national partnership with a professional league or national governing body, there are major limitations on college campuses as to what level activation can occur. In another recent article in Sports Business Journal, it highlights how the University of Notre Dame does not use their video board for any advertisements. If Notre Dame ends up being a part of the Super Rights Holder (Yes, I know they are still working through the 13 month RFP processes to name a rights holder, but just giving an example), how would our Luxury Auto Category partner above activate in the same manner as they are doing at University of Alabama or UCLA or Ohio State? What replacement or make-good sponsorship assets would need to be offered? Would they be interested or still be forced to buy Notre Dame with limited activation options?
College athletics offers such a unique activation process that truly selling national deals is very difficult due to the lack of uniformity on every college campus.
In addition, all schools are different on what you can even do for activation. Do they have TV viewable signage? Do they have a fan-fest area for activation? Do clients activate in stadium? Do they allow in-game promotions? Do they even allow tabling or car displays?
Selling a complex national partnership requires the right mix of sales navigation on campus and ability to understand activation opportunities on each campus.
During my time as a sponsorship buyer, I had the pleasure of working with some great national salespeople, but not one of them offered the amount of personal activation received from working directly with the campus sales team. From that model, we were always able to receive higher customer service and activation opportunities that went above the letter of the contract. This leads to longer term deals and better relationships moving forward. Fighting with a national or regional sales person who is not tied to the local property can cause a poor relationship and ultimately lose a deal.
How does a national seller from Chicago care or know if a partnership is being activated properly in Manhattan, Kansas without the help of the local team? Why not just go to the direct team to ensure the activation works better for your brand?
Lack of Local ROI or Campus Business back
Many categories are very complex and require a deep integration on the campus level for not only activation but for work within the procurement process. College athletics is unlike professional in many ways, but the most prevalent is many of the schools must work within a state procurement procedure and cannot just dictate a direct business back.
This is where the best local General Managers and rights holder can thrive! Categories such as Banking, Pouring Rights, and Telecommunications that require a significant amount of business back are going to be difficult to almost impossible to manipulate from a nationally focused structure. All of these categories require an integrated approach to the school’s procurement process to ensure the needs of the client are met. If the local sales team diminishes, how can you maximize the revenue from these categories that are typically your top five spends in college athletics?
This is going to be the biggest sell for the rights holders who are not part of the Super Rights Holder. OutFront Media, Fox Sports, Van Wagner and JMI Sports are going to preach the importance of the individual and local model and stress how they will over service locally compared to the Super Rights Holder.
Greg Brown is a master of relationships, one of the best to ever do it, and he and his trusted staff will ensure his athletic directors that nothing will change on the local focus. I truly hope it doesn’t, but that is going to be very hard as they look to maximize revenue for their Venture Capital leaders with 200 properties.
This one area will be the biggest determinant in how well the Super Rights Holder model will work. If they can ensure the local relationship with procurement and campus will remain solid to enable business back, it will be a juggernaut!
Increased Cookie Cutter Options
Lastly, one of the biggest fears of the national brands I have spoken with is the increase of cookie cutter options. They are worried that once the Super Rights Holder finds a system that works across campuses they will try to replicate for decreased costs of activation and efficiency.
It makes sense.
But, will the brand truly receive the best value is the buyer’s concern. When schools had to service individually, the customization level was increased as they needed those dollars. Not only for the property but for the local seller’s commission check! My concern as a person who once bought and sold national sponsorships would be the customization of a national deal, and if I was truly maximizing my local presence. The days of slapping a logo on a website and putting up a sign in stadium are long gone. The need for a truly complex local and national integrated platform that is customized to individual brands is essential in growth. There are a lot of great salespeople out there who can handle this, but they need to ensure the ties with local sellers to keep the customized elements for clients.
In closing, a true national platform offers many positives in terms of simplifying negotiating with an organization and having access to multiple brands, but it does not truly answer the questions and concerns that have come up from my talks with major players in this space. They are concerned about the issues that arose from IMG and Learfield’s recent attempts at national sales. The new Super Rights Holder must ensure the local ROI is received, the plans are truly customized for the partnerships and have full buy-in from the campuses for activation. If these needs are not met, the Super Rights Holder model will not work and the market is prime for JMI, OutFront, Fox Sports and Van Wager to swoop in and preach local partnerships for revenue generation!