Learfield and IMG College approach college sports mega-merger

Imagine if Coke and Pepsi teamed up for a merger to create one unified beverage-oriented company. Or if Disney and FOX put their differences aside to create the largest media conglomerate possible. As far as college sports media rights are concerned, the report of a merger agreement between Learfield and IMG College is essentially on that scale.

The two media companies have reportedly come to an agreement on a merger, according to John Ourand and Michael Smith of Sports Business Journal. The two companies will come together in a straight 50-50 split under the same umbrella, which will be led by Learfield President and CEO Greg Brown, according to the SBJ report. The merger is expected to become official in a matter of days, once the finer details of the agreement are put in ink.

This is truly a mega deal for the college sports world that will impact nearly every college sports program you can probably think of. The two companies control the multimedia rights to at least 200 schools. While the TV rights deals are negotiated by the conferences with companies like ESPN, FOX, CBS, and NBC, each school has the chance to sign their own media rights deal for radio coverage.

The schools sign these rights deals to allow Learfield and IMG College to take care of getting the football and basketball games heard on radio throughout the state and surrounding areas, while the revenue can be split between Learfield or IMG College and the school without having to distribute any revenue to other conference members.

Why is a merger between the two largest media rights companies a big deal? It could help make generating advertising revenue an easier and smoother process.

Until now, a brand that wanted a truly national college sponsorship had to execute multiple contracts across different agencies because rights were splintered among six major rights holders, Learfield and IMG College being the two largest. Merging the two businesses will create the closest thing to a one-stop shop the college space has ever seen and, theoretically, make the unified company a much more effective sales engine for college sports.

This merger could also lead to some cost-saving steps by Learfield and IMG College under the new arrangement. No job cuts once the companies formally merge their resources have been projected at this time, as the extensive client list between the two companies will still demand a healthy workforce to accommodate the needs of these relationships. Both companies employ an estimated 1,000 people. While no job cuts have been targeted as a focus of the negotiations between the two companies, it can still be a valid concern once the companies merge and establish a new work flow. For now, though, all jobs are said to be safe.

The formation of this merged company will also increase the number of outlets and partners the company can use to pull for advertising purposes, which could lead to higher revenue generated through advertising deals across the expanded network.

To the listener, it is very likely nothing will change. Those listening to a game in the car or on the go will see no difference. It is behind the scenes were the biggest changes will be noticed, as well as in the balance sheet for partner universities. There could be some more green heading to your favorite school’s bank account once the merger is completed.

[Sports Business Journal]