The University Athletic Department has signed a ten-year, $67.1 million agreement with a national communications firm for marketing rights of University sporting activities.
The University announced its future collaboration with IMG Communications last February, saying the deal would guarantee the University $56.2 million in cash over ten years. The contract was signed by all parties in June.
IMG Communications will be collaborating with Oregon Sports Network, which ran University sports marketing for the 2007-2008 year, said Tim Roberts, OSN president.
“The partnership between OSN and IMG College provides the university with the service and existing partnerships of a long-time local partner, combined with the strength of a national and international sales and management leader,” Athletic Director Pat Kilkenny said in a news release.
IMG will start its partnership by giving the University $4 million next year for capital investment in video boards and signage in the proposed basketball arena, Autzen Stadium and in the new baseball park, according to the release.
“Our company and IMG can put more resources into marketing than a state institution can,” Roberts said. “We can run (marketing) better than the University can.”
IMG together with OSN will have rights to all Oregon sports broadcasts on television and radio, advertising and licensing video boards and signage.
“In addition to selling advertising in the stands, they also have rights to the product – the broadcasting of Oregon Athletics,” University spokesperson Phil Weiler said.
IMG will also sell the naming rights for the new baseball park next year, Weiler said.
The University is retaining OSN because it wants to keep the Oregon Sports brand intact, Roberts said.
“To most people, we (OSN) look and act like we work for the Oregon Athletic Department,” Roberts said. “And that’s how UO wants it.”
Before last year, the University’s sports marketing was run by ESPN Regional, but ESPN exited the sports marketing business, Roberts said.
IMG’s multimedia rights division represents 11 major universities and the NCAA.
The deal with IMG is one of several ventures the University is making to help the Athletic Department remain self-sufficient – as the deal will more than double the money made from the existing contract with OSN – with the overall goal of becoming self-sustaining.
Weiler said the Athletic Department became self-sufficient when the University expanded Autzen Stadium in 2002 and the department was able to sell more tickets to sporting events.
“It also created those skyboxes for corporate sponsors to rent,” Weiler said.
The proposed new basketball arena will be sustained through ticket sales, Weiler said.
Kilkenny said in a press release that the increase in broadcasting and sponsorship revenue from the IMG deal will be used to help finance the construction of the new $200 million basketball arena.
“It makes good sense to not have athletics be a drain on the institution,” Weiler said.
Roberts said that universities initially began selling the rights to their sports marketing for tax reasons. The government began taxing athletic marketing programs because it did not see them as fulfilling the non-profit mission of a university.
However, when a university is paid “rights fees” by an independent company, it is not considered taxable, Roberts said.