Difficult to ignore the announcement by the University of Kentucky that it has signed a 15-year, $210 million agreement with JMI Sports to promote UK athletics in exchange for the school’s athletics and campus multimedia marketing rights. The development is relevant here because Louisville Metro is considered a part of UK market.
The deal includes a $29.4 million signing bonus and allows JMI to sell and profit from the school’s stadium and arena signage, future naming rights, in-game promotions and coaches’ endorsements, among other things. It doesn’t include the most lucrative of all, the TV rights. Bully for UK on what they say is the second largest deal in the country that doesn’t include TV behind only Alabama, which has a 10-year contract with Learfield Sports. Notre Dame and Texas have higher deals that include TV.
Wildcat fans are joyous, including Tom Stulz, the Kentucky native from Greenup who is chief executive at JMI. A groundbreaking accomplishment, especially without TV rights. One would have to conclude it’s a major gamble for JMI and recouping a return on the investment could take a while. A few other thoughts:
- How would UK be able to wrangle a better marketing deal than say schools like UCLA, Southern California, Michigan, LSU, and Oregon who have traditionally been among the top 10 football programs in the nation? Kentucky’s primary claim to fame is basketball, with a following that pales in comparison with football. Possibly there are some much bigger deals forthcoming for schools in other markets.
- Why would UK rate such a contract when the Census Bureau lists the state’s population as only 4.7 million people? The school already owns most of the state outside of Louisville. How much potential for growth is there outside Kentucky for a basketball-centric school?
- Fifteen years seems like an extended period of time for a $210 million deal. Impressive but not overly so in an era of multi-million athletic contracts, especially when spread out over a decade and a half.
- UK says the deal is separate but Learfield Sports has the marketing contract for Rupp Arena Sports & Entertainment Properties and the adjacent Lexington Convention Center. The recently scuttled renovation of Rupp was estimated at more than $300 million. The lease expires in 2017. Construction costs never go down. If UK wants a 22,000-seat arena on campus, can they raise the money they need to outdo the KFC Yum! Center?
- The JMI proposal said UK should explore the possibility of creating its own radio station in Lexington “and expand coverage in Louisville.” Interesting because UK has already purchased the broadcasting rights for basketball and football on WHAS, the 50,000-watt station, and broadcasts its baseball games on WKLO-1080. They may have already maxed out in the Louisville radio market.
- JMI will “try” to “recapture much of the audience that has been lost to bloggers, other websites and media personalities … and, of course, we want to fully monetize these efforts.” One has to wonder what UK considers to be its audience and whether UK perceives some highly visible blog sites to actually be competitors. Most Wildcat bloggers would say they are supporters, but they may be in for a rude awakening.