The Bay Area is a crowded sports market and competition for share of mind and wallet gets even tougher when teams are becoming world champions, stars are being born, MVP's named, a new stadium opening, arenas being planned and teams thinking about moving.
How is the business of collegiate athletics going to shoulder it’s way to the front of the revenue line? Right in our own backyard the Pac-12 is rearranging the business of collegiate athletics.
At the recently concluded Pac-12 meetings, the conference announced the creation of an internal sales and marketing division that will be responsible for multimedia rights for those institutions that choose to opt in. The multimedia rights umbrella is usually defined by stadium/arena signage, corporate partnerships, radio, digital and other types of new media to come.
Individual schools and conferences have had structured deals for third party rights sellers for many years. Companies such as IMG College, Learfield, Nelligan, JMI, Fox Sports, CBS Collegiate Sports, Actions Sports Media and others are the major players in the reselling of collegiate sports rights.
Locally, Stanford is represented by Learfield and Cal by IMG College. These marketing companies contract with the school’s athletic departments who might receive seven-figure deals annually on these types of arrangements. The third parties use their expertise and professional sales forces to negotiate corporate deals and guarantee the school a negotiated figure. If that guarantee is exceeded, the upside is shared between both parties on a pre-agreed percentage. If the number falls short the third party takes the loss. There are some conference wide partnerships like AT&T Wireless that include all Pac-12 schools
Beginning with the 2015-16 academic year, many FBS schools will begin paying athletic cost of attendance stipends which could add a million or more dollars to next season's athletic department budget.
The business of collegiate athletics is becoming more sophisticated every day and the Pac-12 has recognized that they may be able to generate a multimedia rights upside by putting together their own sales and business operations groups. Pac-12 schools could see an increase of over 20 percent in revenue from this new structure by eliminating the middleman.
The Pac-12 Network is trying to build subscriptions and revenue in an extremely crowded market. Conferences such as the SEC and Big Ten are generating significant piles of cash from their TV revenues.
Pac-12 Commissioner Larry Scott is a bold thinker and understands that new revenue must be found at home and around the ever shrinking world of sports. The Pac-12 is trailblazing in China through its partnership with Alibaba, the world’s largest online and mobile commerce company. If you want to see your Washington Huskies men’s basketball team live on November 14th book a ticket to Shanghai. The Huskies will be hosting Texas. This game will become the first U.S. sports league, collegiate or professional, to host a regular season game in China.
The Pac-12’s game plan for controlling it’s own business growth will be studied by many schools and conferences to see if it’s time has come.