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OSU Athletics
OSU Stabilizes Marketing Revenue Stream and Finds Windfall in Deal with IMG/Radio Ohio
By John Porentas

Ohio State announced yesterday that it has outsourced much of its sports marketing to a partnership of Cleveland-based IMG and Columbus-based Radio Ohio, the current radio franchisee for OSU sports.

The deal will result in an increase of revenue that will amount to around 72 million dollars over the 10 year term of the deal. The Department of Athletics will realize approximately 3 to 4 million new money annually while the Schottenstein Center will benefit from 2.5 to 3 million of new money.

Director of Athletics Gene Smith said that current economic conditions did not force OSU to make this move, but eventually entered into the decision to make the change.

"That was not the impetus. but as our revenue streams became challenged over the last three months it became a part of our decision-making process. It wasn't the impetus to start it, but it became a part of our conclusion," said Smith.

Also contributing was uncertainty over future commitment levels of long-standing OSU sponsors.

"We were concerned as we moved forward over the next three years whether or not our corporate sponsors that we currently have and have to renew within those three years, whether or not they can renew at the same levels or higher," said Smith. "We were not sure of that so it was risky on our part to continue down that path understanding the economy."

The deal with IMG/Radio Ohio allows OSU to tap into IMG's national advertiser network while maintaining its traditional regional base of sponsors through Radio Ohio. The advantage of the deal over the current system in which the University did it's own marketing is that the income is guaranteed by IMG thus stabilizing OSU's revenue stream from marketing proceeds. OSU will realize the income whether IMG/Radio Ohio sells ad space or not. Smith says that IMG's national draw gives it more clout to sell space than the university could generate as an independent entity.

"We've always been unbelievably strong regionally. We haven't been as successful as we'd like to be nationally," said Smith.

"Being a part of IMG along with Radio Ohio gives us that national reach. We felt like we could shore up what we might lose regionally we hope that IMG can pick up nationally."

Not all of OSU's windfall in the deal will come from new revenue. It will also come from cost savings. Four OSU employees will lose jobs, but will be given the opportunity to interview with IMG thereby saving the Department of Athletics that payroll expense. Additionally, IMG will pick up numerous other expenses including the cost of tickets for important clients and other expenses associated with marketing.

"Those are tickets that they would buy at the request of our partners (sponsors)," said Smith.

"Historically, we've funded hospitality (tickets), travel to bowl trips for certain sponsors, and other things like that. Now IMG-College and Radio Ohio will absorb those expenses."

IMG/Radio Ohio will handle production and marketing of OSU radio broadcasts, game day programs, signage throughout OSU arenas and stadia, OSU-related promotional opportunities, coaches endorsements and coaches television shows.

The deal includes a budget of three million dollars for physical improvement to increase inventory. Under consideration is a LED ribbon screen for Ohio Stadium.

"Anything that we would do would require the university's approval and would respect the traditions and the history of this great program," said Tom Stultz of IMG.

"All those elements are very important. The LED would be great commercial inventory and would also is a great enhancement to the gameday experience.

"What you have to find out is does it work structurally and from a game day atmosphere standpoint does it fit with what the university wants to accomplish and what the stadium can accommodate. All that is being evaluated."

Stultz put the possibility of seeing a ribbon screen in Ohio Stadium this fall at 50-50.

"That would be really cool for that first night game," commented Smith.

OSU put the marketing rights out for bid last November and received four offers. IMG outbid Fenway, CBS College Sports and Front Row to obtain the rights. Certain marketing deals were exempted from the arrangement and will remain in place with OSU but outside of the IMG/Radio Ohio deal.

"Nike, our Infinity Card with Bank of America, Coke and Gatorade, all four of those deals are outside this contract," said Smith,

"Our licensing, trademark licensing is not part of this deal as well."

The total deal with IMG/Radio Ohio is for nearly 128 million over 10 years, 110 million of which is guaranteed.

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