UM’s media rights outsourcing at issue Baldacci criticizes sports broadcast deal

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ORONO – Black Bear Sports Properties’ recent decision to broadcast University of Maine sports on Clear Channel radio station WVOM has many Maine residents and UM alumni, including Gov. John Baldacci, questioning the athletic department’s original decision to outsource its multimedia rights to a national company.

In March 2006, UM announced it would sign a six-year contract worth at least $2.95 million with multimedia rights management firm Learfield Sports, a division of Jefferson City-Mo., based Learfield Communications. Learfield created Black Bear Sports Properties on the UM campus and began evaluating the university’s multimedia contracts and corporate partnership efforts. Bangor radio station WZON-AM 620 continued to broadcast UM athletic events.

On March 15 of this year, WVOM-FM 103.9 of Bangor announced it had signed an agreement with Black Bear Sports Properties to become the flagship station for UM sports. WVOM will air hockey and football games, and another Clear Channel Communications Inc. station, WGUY-FM 102.1 of Lincoln, will be the home for men’s and women’s basketball as well as select baseball and softball games.

Black Bear Sports Properties will let its contract with WZON expire at the end of the current season.

WZON owners and famous UM alumni Stephen and Tabitha King expressed disappointment over the decision, and other alumni and local residents have questioned UM’s loss of control over the decisions of Black Bear Sports Properties.The controversy has captured the attention of Baldacci, also a UM alumnus, who is publicly questioning UM’s decision to go with Learfield.

“I am concerned about what is the University of Maine negotiating away in terms of their image, where will it show up and what will be the checks and balances of that,” Baldacci said in a telephone interview Thursday.

The governor said his staff is reviewing the UM-Learfield contract. A Baldacci staff member met Friday with UM officials and plans to meet with Learfield representatives in the near future.

The outsourcing strategy

The UM athletic department maintains that outsourcing its corporate sales department was a necessary financial strategy.

UM’s athletics administration must raise more than half of its revenue through ticket sales, sponsorships, multimedia arrangements and other sources, according to Joe Carr, director of university relations.

Carr says athletics is unlike other departments at UM in that less than half of its revenue is provided by the university.”That’s why it’s so important to maximize,” Carr said, referring to the revenues the department must raise.

UM is following a nationwide trend of outsourcing its athletic corporate sales department. At least 134 other colleges and universities have contracts with Learfield Sports, Action Sports Media, CBS Collegiate Sports, Host Communications, ISP Sports and Nelligan Sports.

Learfield has partnered with 34 schools. They include Oregon State, Penn State, Texas A&M and the Universities of Colorado, Minnesota, Wisconsin, Oklahoma and North Carolina.

In the six-year contract signed last October, Learfield agreed to pay UM $450,000, plus a revenue-sharing deal, for the 2006-2007 athletic year. Next year, the payment remains the same, but it will increase by $25,000 each year after 2008, totaling $2.95 million over the six-year period.Previously, UM handled its own radio and television deals and was responsible for arranging game sponsorships and printing signs and programs.

In the past five years, before signing with Learfield, the athletic department netted anywhere between $100,000 and $400,000 a year, according to Blake James, UM’s athletic director. With Learfield, the athletic department budget is firm and its income is reliable, he said.

“In order for athletic departments to continue to maximize their revenue in marketing and multimedia rights, this model has proved to be very successful,” James said. “As we looked at what we were doing, knowing the ups and downs of the market at any time, the ability to outsource and have a guaranteed income was to take what we were doing to the next level.”

Upon creating Black Bear Sports Properties, Learfield appointed Mike McCollum, former director of corporate sales in the UM athletic department, as general manager. McCollum said he now is able to take advantage of Learfield’s extensive experience handling promotional services at other schools.

McCollum said it’s too early to estimate the difference in revenue that Black Bear Sports Properties and UM will receive from the new radio agreement because the broadcasting and advertising rights have been rearranged.

Previously, WZON paid UM $10,000 a year for radio broadcasting rights. In addition, the station incurred all related expenses, such as the salaries of broadcasters, travel and other fees, which raised the value to “six figures,” according to program director Dale Duff.

Beginning with the 2007-2008 season, Black Bear Sports Properties has adopted a Learfield model of retaining and selling nearly all commercial “inventory,” the radio term for advertising time slots, and absorbing most operational expenses, McCollum said. Clear Channel will retain only some of the commercial time that airs during games.

Black Bear Sports Properties doesn’t know whether it will make more money with WVOM, but the advantage is that the company can offer packages of radio, television and print space to companies looking to advertise at UM games, McCollum said. UM stands to earn money if the station switch proves to be highly profitable; its contract with Learfield states that UM will receive 40 percent of the net annual revenue over $900,000. After the 2007-2008 athletic year, that threshold increases.

Black Bear Sports Properties could hit the $900,000 mark as early as next year, McCollum said.

Negotiations with WZON

Last April, McCollum told the Bangor Daily News that UMaine’s athletic department would be the leader in the bidding process with radio and television stations. While Learfield was granted the exclusive right to secure a station, James said he encouraged Black Bear Sports Properties to do everything it could to stay with WZON. But WZON rejected the Learfield model and Clear Channel accepted it, McCollum said.

Duff said earlier this week that it is not fair to say WZON rejected the model.

“We were negotiating a shared inventory model. We had a counterproposal that said we need to share a little more, and that’s when we never heard back from them,” Duff said.

Unlike WZON, WVOM is owned by a company with stations throughout the state. But last October, Clear Channel announced that it planned to sell its Maine stations. Larry Julius, market manager for Clear Channel Radio Bangor, said the contract with Black Bear Sports and Clear Channel will convey to new owners when the stations are sold.

The contract with Black Bear Sports Properties “enhances the value of the radio station, and prospective buyers have been very impressed with the addition of that programming,” Julius said.

James said Black Bear Sports Properties’ deal with Clear Channel would allow UM to expand its coverage area statewide while keeping the flagship station nearby.

“I imagine within a few years you’ll see more than just Clear Channel affiliates as part of our radio network. … There will be other stations that are part of the deal that maybe have no affiliation with Clear Channel,” James said.

In an interview this week, McCollum called suspicions in the community that Learfield favors Clear Channel stations “unfound[ed] and untrue.” Beau Stephens, manager of administrative and client services at Learfield Sports, agreed with McCollum’s assessment. So did a BDN examination of a few state universities that also have outsourced athletics advertising and multimedia management to Learfield.

The University of Iowa broadcasts its sports on 37 AM and FM stations throughout the state, two of which are owned by Clear Channel. Of the 25 stations on the University of Wyoming radio network, none is owned by Clear Channel.

“We partner with over a thousand stations. Honestly, without going contract by contract and school by school, I couldn’t even ballpark how many stations are Clear Channel and how many are not,” Stephens said. “I can tell you that we do not have a partnership with Clear Channel.”

‘We love the university’

Still, Black Bear Sports Properties’ decision to switch from WZON to WVOM has made many Maine residents and UM alumni question whether the loss of local control outweighs the convenience and financial benefits of outsourcing services in the athletic department.

Baldacci said the contract should be examined because it involves a state university that runs on public dollars.

“We love the university. It’s done a lot for my family and a lot of families. That’s why I think a lot of what happens there ripples through the entire state,” Baldacci said Thursday.

As stipulated in the UM-Learfield contract, Black Bear Sports Properties resides rent-free on the UM campus, which allows the company to communicate quickly and easily with the athletic department, James said. The company does pay its own office expenses.

“It just helps the working relationship to have them on campus. Obviously, it was an area we had to provide office space for in the past and it makes sense to have them here with us,” James said. There are other research and private companies housed on UM property, such as those residing in the Target Technology Incubator.

“Having been around a number of athletic directors even recently with the Frozen Four, … there’s a lot of schools of our size, I think, that are envious of the opportunity we’ve been given. I feel fortunate,” James said.

“On the other hand,” McCollum added, “we’re also very fortunate that we have very loyal people here who have sponsored us for a very long time.”