IMG’s Acquisition Is Good For The College Business
CNBC Sports Business Reporter
Sports management firm IMG announced yesterday that it was acquiring ISP, a collegiate sports marketing firm that, like IMG, buys and then sells the marketing rights to the inventory for college sports teams.
The deal, valued at between $80 and $100 million, will give IMG’s college division the marketing control of more than 60 schools, including the likes of Duke, Notre Dame, Ohio State, Michigan and Florida, among others.
There are going to be some people who will argue that this blockbuster deal should not be granted federal regulatory approval because it puts too much power in the hands of one organization.
But in order to prove that IMG would violate antitrust laws one would have to prove that the sum of the new entity’s parts is a negative for business and that’s just not the case.
This is a good development for the business of college sports because, no matter what the NCAA says, schools battle all the professional sports leagues for their sponsorship dollars. Those leagues, at least for now, have the rights to sell big sponsorships across all their teams. So why shouldn’t IMG be able to allow a big company to take a checklist of all its teams and check the boxes of the schools it wants?
The efficiency of it all is why it makes sense for both IMG and the schools. Imagine the level of executive IMG can get to versus a cold call from someone in the marketing department at the University of Michigan. Imagine how much more quickly companies can sign off on deals if they buy Ohio State and Michigan in one conversation.
Sure, the schools that don’t have the power of IMG are at a disadvantage — they have to work harder. But they’re not legally at a disadvantage because technically these schools aren’t competing against each other for the same ad dollars. They’re competing against every other entertainment venue.
In order to push into the next era of business, schools can no longer rely on the local sandwich shop to be on the scoreboard. They need to have Fortune 500 companies pitching themselves to their fans. With IMG’s acquisition, that will happen sooner rather than later.
Questions? Comments? SportsBiz@cnbc.com
