By Paul Birdwell (firstname.lastname@example.org)
In recent years college athletic departments have been taking in record amounts of revenue from both the long-running NCAA Basketball Tournament and the just started-up last year College Football Playoff, but postseason tournaments are only part of the story of the large amounts of money that is being generated and spent on sports teams on college campuses in America.
USA Today was out last week with their annual NCAA Finances database of the top 200-plus colleges in America which lists how much athletic departments raise and spend in fielding their sports teams, and not surprising the universities of Oregon, Texas, Michigan, Alabama and Ohio State are at the top with the Oregon Ducks athletic department taking in a gargantuan amount of almost $200 million dollars in 2013 - 2014.
The University of Texas has long been at or near the top of college athletic department revenue for decades now and in a recent piece in the Houston Chronicle reporters Mike Finger and John Tedesco used the state of Texas open record laws to learn about the inner-workings of how sponsorship dollars are raised by the UT athletic department which is a fascinating inside look at how the UT athletic department makes money selling sponsorships:
“Two years ago, on an afternoon in his final spring as the University of Texas athletic director, DeLoss Dodds attended two meetings. One was to discuss the Longhorns' foundering major sports teams. The other was with a group of executives from Chevrolet.
The conversation with Chevrolet led to a lucrative sponsorship for UT - $4.8 million in cash over three years from the automaker and a new Silverado HD pickup truck worth $63,885 that was dubbed "the official truck of Bevo," the Longhorn mascot.
The contract is one of 19 corporate sponsorships that will provide UT athletics and marketing partner IMG College with $16.4 million in cash, products and services this year, contracts obtained by the San Antonio Express-News show. Through 2021, the multiyear agreements add up to $98 million.
Dodds' successor, Steve Patterson, believes the corporate largess can help UT address those still-relevant questions about performance. As the nation's wealthiest athletic department shakes up its coaching staff and seeks a return to on-field glory, its quest is being funded in part by an impressive stable of private companies.
The corporate deals represent less than a tenth of the athletic department's total revenues, which Patterson estimates will be between $180 million to $185 million this year, including $12.5 million from the Longhorn Network. But the value of UT's sponsorships exceeded the 2013-14 total operating expenses of 100 different Division I athletic programs.
The deals until now have been kept under wraps, and UT and IMG fought the newspaper's requests to make them public. But the Texas attorney general ruled in December they generally are subject to open-records laws. After giving the individual companies time to challenge the ruling, UT recently released the documents.”
Yes, $17 million dollars annually and counting in sponsorship deals for the Texas athletic department is a stunning number, but that is still less than a tenth of UT’s entire athletic revenue from 2013 - 2014 with that other 90% mainly coming from the Longhorn Network and TV contracts associated with the Big 12 Conference and the postseason College Football Playoff which by itself has added over $200 million dollars in new revenue to college football last year.
For those in the sponsorship business it is interesting to note the growth of companies like IMG and Learfield Sports that work with and represent college athletic departments across America that then receive a cut of any monies generated by their sponsorship sales work and there is a section of this Houston Chronicle article on Texas athletics that goes into the details of those business relationships:
“As part of its UT contract, which also enables it to sell advertising, TV and radio rights, and signage at events, IMG keeps 17.5 percent of gross revenue it generates on the school's behalf. For that privilege, IMG pays UT a $2.26 million annual-rights fee.
Because IMG handles so many similar clients, it's able to consolidate deals with national brands to enable those companies to sponsor multiple programs. Chobani, UT's newest sponsor, signed on with the Longhorns and 16 other schools at the same time.”
Just doing some back of the envelope math using the above numbers IMG makes around $700,000 per year on their sponsorship sales deal with the Texas athletic department which is in the 4 to 5 percent range on sponsorships generated which is a little higher than the Roaring Fork Agency would charge for the same work, but pretty much in-line with sponsorship sales work commissions across North America right now.
There has been one constant of more and more money in the last three decades since the Supreme Court decided in the NCAA vs. Board of Regents of University of Oklahoma in favor of schools and conferences right to schedule and put together their own television contracts which has seen an explosion in the amount of intercollegiate athletics that is on TV and money that has continues to flow in ever increasing amounts to college athletic departments across America.
University of Texas Athletics - www.texassports.com
USA Today NCAA Finances - www.sports.usatoday.com/ncaa/finances
IMG - www.img.com
Learfield Sports - www.learfieldsports.com
If you have any questions about event sponsorship or venue naming rights contact the Roaring Fork Agency at:
San Francisco, California – 415 730 – 4854
Seattle, Washington – 206 920 – 3934
Bend, Oregon – 541 640 – 2221
Twitter - @RoaringForkAgcy