DRC: UNT's deal with Learfield to bring in more than $1 million annually

[Brett Vito]

DRC:

http://www.dentonrc.com/sports/mean-green/2017/10/25/unts-deal-learfield-bringing-1-million-first-year

[Hunter Green]

I'm glad that UNT is starting to take its self seriously and that our AD is acting like a real Div. 1 program. I really like the progress we're making both athletically and academically.

GO MEAN GREEN!

 

[Wag Tag]

1 hour ago, Hunter Green said:

I'm glad that UNT is starting to take its self seriously and that our AD is acting like a real Div. 1 program. I really like the progress we're making both athletically and academically.

GO MEAN GREEN!

 

And financially ! GMG

[Grant.UNT]

I'd like to know more about how this streamlined the operations. Did it save us money in headcount? I hope we start looking at our licensing model to get more merch in more places.

[outoftown]

23 minutes ago, Grant.UNT said:

I'd like to know more about how this streamlined the operations. Did it save us money in headcount? I hope we start looking at our licensing model to get more merch in more places.

I think the good part is that Learfield will take care of the second part. They have every incentive to do so.

Overall this looks to be a fairly decent deal money-wise for UNT as I think the price is quite fair for the next two three years.

I am however a bit concerned about the details of the contract. Particularly that increasing threshold seems concerning. That means that as that deal progresses, it gets more and more beneficial for Learfield and UNTs revenues from the deal are likely to decrease as it progresses unless UNT and Learfield manage to increase the return from Learfields rights by more than 50%.

Edited October 26, 2017 by outoftown

[DentonLurker]

25 minutes ago, outoftown said:

I am however a bit concerned about the details of the contract. Particularly that increasing threshold seems concerning. That means that as that deal progresses, it gets more and more beneficial for Learfield and UNTs revenues from the deal are likely to decrease as it progresses unless UNT and Learfield manage to increase the return from Learfields rights by more than 50%.

I think Vito didn't really explain the guaranteed rights fee very well. That number increases in this model too (I'm assuming by half the threshold amount). This deal is basically a 50/50 split, as long as Learfield hits the threshold. UNT gets the first $1.15M, Learfield gets the next $1.15M, and anything over $2.3M gets split 50/50. In a scenario where Learfield does not exceed the threshold, UNT gets the $1.15M no matter what. Learfield only gets whatever they exceed $1.15M by.

52 minutes ago, Grant.UNT said:

Did it save us money in headcount?

I know there was a sponsorship sales position that reported to Hank that I don't think got rehired, at least as a sponsorship sales position. I think that was Matt Phillips' old position.

 

[Censored by Laurie]

1 hour ago, DentonLurker said:

I think Vito didn't really explain the guaranteed rights fee very well. That number increases in this model too (I'm assuming by half the threshold amount). This deal is basically a 50/50 split, as long as Learfield hits the threshold. UNT gets the first $1.15M, Learfield gets the next $1.15M, and anything over $2.3M gets split 50/50. In a scenario where Learfield does not exceed the threshold, UNT gets the $1.15M no matter what. Learfield only gets whatever they exceed $1.15M by.

I know there was a sponsorship sales position that reported to Hank that I don't think got rehired, at least as a sponsorship sales position. I think that was Matt Phillips' old position.

 

That is actually really good business.

this also explains away my confusion when listening to the kntu broadcast why Dave and Hank were calling the game from some place called Lear Field

[untjim1995]

Remember the old days, when our broadcast revenue was ESPN giving the Sun Belt about $100k and the equivalent of a few sandwiches per school? Seems like a long time ago, now...

[MeanGreenTexan]

It was THAT EASY to turn around and make over $1mil?

So we'll never need to play a 'paycheck' game again, since that extra $mil/yr is covered?

Or, are we budgeting that money somewhere else to use immediately, and still play the paycheck games after the RV-scheduled games end in 2021?

[untjim1995]

4 minutes ago, MeanGreenTexan said:

It was THAT EASY to turn around and make over $1mil?

So we'll never need to play a 'paycheck' game again, since that extra $mil/yr is covered?

Or, are we budgeting that money somewhere else to use immediately, and still play the paycheck games after the RV-scheduled games end in 2021?

I’m sure we will ride that Bodybag gravy train for as long as possible...it’s easy money, with the potential for more media and fan coverage if you play tough.

[dmaxel]

7 minutes ago, untjim1995 said:

I’m sure we will ride that Bodybag gravy train for as long as possible...it’s easy money, with the potential for more media and fan coverage if you play tough.

I'm thinking the same.

"Either give us a home-and-home, or pay well for us to come visit."

[aztecskin]

5 hours ago, Grant.UNT said:

I'd like to know more about how this streamlined the operations. Did it save us money in headcount? I hope we start looking at our licensing model to get more merch in more places.

The licensing model is pretty standard right now. I took a quick peek at it -- Its through IMG.

Really short and super summarized version: IMG says it is a long process that requires a significant outlay and that often companies abandon the application process. You have to be really committed.

I think one reason that we do not see more merch in more places is the simplest: the outlets do not think they'll get enough return on the investment. You can get shirts and things printed or ordered online but its much more expensive for a retail outlet to stock it and use up shelf space.

 

--

I think the standard royalty is 12.5% to NT after an initial $500 or so fee or something.

[cdizzle86]

Maybe instead of scheduling the Alabama's, Oklahoma's, and Georgia's we can afford to schedule more Iowa's, Indiana's, etc.

[PlummMeanGreen]

Impressive.  

[DentonLurker]

4 hours ago, MeanGreenTexan said:

It was THAT EASY to turn around and make over $1mil?

So we'll never need to play a 'paycheck' game again, since that extra $mil/yr is covered?

Or, are we budgeting that money somewhere else to use immediately, and still play the paycheck games after the RV-scheduled games end in 2021?

The part I would be curious to see and wonder why Vito didn't cover it is to see what our total sponsorship money looked like before they signed this deal. I'm assuming it must have been close to $1M if Learfield was willing to guarantee what they did. If that's the case, I guess the proof will be in the pudding for where this thing ends up down the line. I'll be interested to see what the incremental increase looks like.

[tmjerm]

I like it.  These guys are very well respected and will bring us along to the modern age much better than if we kept all of this in house. 

[SteaminWillieBeamin]

It's a good headline, but it is just moving around. If the previous office that internally handled it managed to get $1M a year, then this deal to outsource the merchandising is just a lateral move. The only difference would be if this company somehow managed to earn $3M over a year and then UNT would be splitting the profits after $2M... as I see. We potentially could be losing out on that extra $1 (to get to $2M) -- assuming that is even possible for a school like UNT. 

So really, this company is betting they can do that and pull in some profit. Time will tell. 

So unless we know how much the previous positions pulled in under RV, then we can't judge this move accurately. 

If RV's staff pulled in $500k and this deal is up to $1M -- then it has the potential to get us $500k. If they sell $1.5M of license/merch, then we still only get that $500k, no more. 

Either way, it is really inflated numbers and I hope this company lives up to their expectations. 

[outoftown]

I guess the potential win here is, that Learfield has every incentive to make north texas a brand whose merch you can find everywhere as that is the only way they can make real money out of this. And if they fail, UNT till has some guaranteed money.

That is provided DentonLurkers explanation of the deal is correct.

Edited October 27, 2017 by outoftown

[Censored by Laurie]

15 hours ago, SteaminWillieBeamin said:

It's a good headline, but it is just moving around. If the previous office that internally handled it managed to get $1M a year, then this deal to outsource the merchandising is just a lateral move. The only difference would be if this company somehow managed to earn $3M over a year and then UNT would be splitting the profits after $2M... as I see. We potentially could be losing out on that extra $1 (to get to $2M) -- assuming that is even possible for a school like UNT. 

So really, this company is betting they can do that and pull in some profit. Time will tell. 

So unless we know how much the previous positions pulled in under RV, then we can't judge this move accurately. 

If RV's staff pulled in $500k and this deal is up to $1M -- then it has the potential to get us $500k. If they sell $1.5M of license/merch, then we still only get that $500k, no more. 

Either way, it is really inflated numbers and I hope this company lives up to their expectations. 

anything past $2.3M (if Lurker's numbers are right) gets split. I'd be shocked if UNT merchandising was anywhere near that range when the deal was inked.

I'm going to (optimistically) bet that the math was worked out on this pretty well and that we, prior to Learfield, were in the $1-1.25M range on merch...thus the $1.15M target number..."this is what we can do on our own, now go beat it" kinda deal. even if Learfield only brings it right to that $2.3M figure, UNT has a zero-sum gain (and loss) to basically double it's visibility and regional footprint.  that might be a slight overpay, but I think the long term benefits of more UNT gear out and about is worth that investment

[DentonLurker]

I don't think Learfield's deal has anything to do with licensing/merchandising. Last I checked, UNT uses CLC to handle that stuff. I think this is a separate deal for just the stadium signage, coaches shows, radio ads, etc.

[SteaminWillieBeamin]

1 hour ago, Censored by Laurie said:

anything past $2.3M (if Lurker's numbers are right) gets split. I'd be shocked if UNT merchandising was anywhere near that range when the deal was inked.

I'm going to (optimistically) bet that the math was worked out on this pretty well and that we, prior to Learfield, were in the $1-1.25M range on merch...thus the $1.15M target number..."this is what we can do on our own, now go beat it" kinda deal. even if Learfield only brings it right to that $2.3M figure, UNT has a zero-sum gain (and loss) to basically double it's visibility and regional footprint.  that might be a slight overpay, but I think the long term benefits of more UNT gear out and about is worth that investment

 Yeh - that is effectively what I was saying too. This is not a gain of $1M -- it is a potential gain -- but historically we never even come close.