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HUSKER ATHLETICS

The reasoning, risks and rewards of Nebraska Athletics moving its multimedia rights operation in-house

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Illinois vs. Nebraska, 11.21

A worker waits to release balloons after the first Nebraska touchdown against Illinois on Nov. 21, 2020, at Memorial Stadium. 

The Nebraska Athletic Department is stepping into a new world July 1 when it will bring its entire multimedia operation in-house after more than a decade of working with Learfield/IMG.

For most fans, the changes will not be noticeable on a day-to-day basis. Nebraska football games will still be broadcast on the radio, "Husker Sports Nightly" will still air and there will still be signage dotting Memorial Stadium, the Devaney Sports Center, Pinnacle Bank Arena and other venues.

You might hear an extra women’s basketball game or soccer match on the radio and the programming could change in other ways over the longer term, but it's likely that most changes are minor.

The difference will be that, rather than having a partner like Learfield/IMG do most of the selling — and paying NU a big guarantee every year — the job will fall to the Athletic Department itself to secure those branding and partnership agreements with sponsors.

Why now? What are the risks? And how about the opportunities? Here is a general guide to multimedia rights and Nebraska’s venture to the vanguard of in-house operations.

First things first, what are we talking about? 

“When you think of multimedia rights, of course it includes radio, but the simple way to think of it is sponsorship sales,” said Jordan Bloem, a senior vice president for client strategy at Navigate Research, a firm that works with colleges in multimedia rights strategy. “That’s signs in stadiums, that tent outside the stadium where they’re giving out keychains and doing brand activation, there’s all kinds of digital assets.”

Nebraska has been paid handsomely over the years by Learfield/IMG — $72 million in the past six years, to be exact — in annual, guaranteed chunks and likely would have decided to continue that arrangement were it not for the coronavirus pandemic.

Instead of paying annual guarantees, though, Learfield/IMG and its competitors are moving more toward revenue-sharing models because of the increased economic uncertainty of the past year.

“Their stance was pretty consistent toward the end of March, early April, that the guarantee model that we enjoyed in the past was no longer available,” Nebraska senior deputy athletic director Garrett Klassy said. “If it was available, it would have been available to us since we’ve consistently been a top-five property in the country when it comes to revenue.”

In the current environment, it’s more challenging to hit sales targets and, in some cases, to collect from sponsors because of reduced schedules and the lack of fans actually attending events.

“There has been a lot more shift toward revenue share models, which have aligned incentives between the school and the (multimedia rights) player," Bloem said.

The pandemic only accelerated the shift. Enter the in-house model.

“If you’re not getting a guarantee and you’re moving to a revenue share, I feel like 100% of the risk is back on us as the school, and if the risk is back on us, why don’t we try to get more of the upside from this?” Klassy said.

“We didn’t want to go out and sign a long-term deal with no guarantee on the table. It’s the equivalent of, if you own a $2 million home and the economy is bad, you’re not going to sell it for $1.2 million just because the economy is bad. You’re going to rent it out for a year or two and figure out what the best move is moving forward.”

It is a big bet to make. NU is planning to hire a staff of about 12 — Klassy called the exact number a “moving target” — including a sales team. 

Klassy said a number of elements lined up to make Nebraska "true free agents," meaning NU is likely going to be able to hire experienced people right from Learfield/IMG and pay them in a manner comparable to what they were already making. 

Nebraska will be the only Power Five school to be entirely in-house. Stanford and Arizona State both do most of their work internally, as does Central Florida at the Group of Five level. Michigan State was in-house until 2016 when they decided to rehire a partner.

“To take it in-house, it’s a big risk,” Bloem said. “The risk with schools is that they understaff or they think doing it is easier than it actually is and there’s a steep learning curve and probably expensive startup costs where you’re hiring an entirely new team of maybe eight to 10 people to sell and service all these partnerships." 

There is also potential upside, though.

“If you can make that big commitment, you understand what it takes, you structure your team smartly, you hire experienced people; the advantage, of course, is you get to keep all the profit and you’re not sharing any of it,” Bloem said. “As always, there’s benefits on both sides, you just have to be willing to take a risk and jump in both feet.”

The other protection is that there’s no long-term contract involved in running operations internally. If it doesn’t go as planned, NU could go back to a multimedia rights partner down the road.

“We want this to be a long-term solution, but we want to be nimble, we need to be flexible (right now),” Klassy said.

Some of the newly unlocked flexibility NU has includes increased control over the programming on its radio network. It also gives the department flexibility to be creative as name, image and likeness developments continue at the national and NCAA level.

“We believe name, image and likeness is going to greatly benefit the University of Nebraska and our student-athletes, and we want to make sure we can stay out ahead of everything and do it better than everybody else,” Klassy said. “The one thing we can control is, can we stay nimble and make changes as the picture becomes clearer? We want to control that inventory. We don’t know what the future holds and we’re going to operate within the confines of the rules that are put in place, but we won’t have to go to corporate partners and then they have to go ask. We’ll be able to do it in an instant.

“I think that will be important for us moving forward.”

Contact the writer at pgabriel@journalstar.com or 402-473-7439. On Twitter @HuskerExtraPG.

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