A Missouri-based company will pay and save Texas Tech $31.7 million over seven years in exchange for the right to control advertising and other revenue-generating aspects tied to university sports, according to the terms of a contract approved Friday
Learfield Communications, Inc. will be able to sell TV and radio commercials for university games under the contract, with the exception of TV commercials for Tech football games, which are conference-controlled, Tech Deputy Athletics Director Bobby Gleason said.
Learfield also will sell space on marquees and signs at Tech sporting venues.
A Tech Board of Regents subcommittee approved the exclusive contract with Learfield during a Friday teleconference.
“We look forward to a really long and fruitful relationship with Learfield,” Regent Mark Griffin said.
Tech was the only Big 12 university that hadn’t yet outsourced its sports marketing, Gleason said.
“I think each school kind of has a different philosophy about (sports marketing), and we have grown our sponsorship dollars internally throughout the years and so things were going OK. I think this is … better,” Gleason said.
Tech’s recent basketball and football successes spurred the change, he said.
Traditionally, the athletics department has annually grossed about $2 million through its own sports marketing efforts, Tech Athletics Director Gerald Myers said. Learfield should be able to double that amount, he said. In addition, the athletics department anticipates saving $6.6 million in administrative costs over seven years by outsourcing to Learfield, a board document shows.
“This is a positive relationship that we want to enter into,” Myers told regents. “We feel good about it,” he later added.
It’s too early to know if any employees under Tech’s in-house sports marketing operation will lose jobs as a result of the Learfield contract, Myers and Gleason said. Six full-time employees were responsible for sports marketing.
Gleason told regents three people will be kept to manage 10 major sponsorships excluded from the Learfield contract – Coca-Cola, AT&T, PlainsCapital Corp., Barnes & Noble, Under Armour, Sodexho Concessions, Covenant Health System, JPMorgan Chase, Campus Design and CSTV.
Other employees will be able to interview for positions with Learfield, Myers and Gleason said.
The size of the marketing staff “will be based on what Learfield wants,” Gleason said.
The company is obligated to pay Tech at least $20.3 million over the life of the contract regardless of how much money it generates through the university, according to the board document. If Learfield makes more than that amount, a revenue-sharing clause will kick in, and they’ll have to share 50 cents of every dollar they earn in excess with the university. Also under the contract, Learfield has agreed to rent Tech basketball and football suites for seven years at a total price of $740,000. They’ll also give Tech an accumulative $1.7 million to add a new video screen for advertising on the south side of Jones AT&T Stadium and to invest in other advertising venues.
The university has the option to extend its Learfield contract for three years.
Gleason said his department is usually wary of signing contracts that extend beyond five years since conditions fluctuate over time. But Learfield originally asked for a 10-year agreement since company officials don’t believe they’ll immediately make a profit from the Tech contract.
They think they’ll have to build up Tech sponsorships over the years to make a profit, Gleason said.
Learfield Communications, Inc. is based in Jefferson City, Mo., and has sports marketing contracts with nearly 50 colleges and universities, according to its Web site, www.learfield.com.
Eight of those are in the Big 12, Myers said.
Learfield also represents all schools in the Big Ten.