With JMI Sports partner Georgia Bulldogs playing in the College Football Playoff Championship Game, JMI Sports President Tom Stultz and Chief Commercial Officer Paul Archey spoke with Sportico’s John Wall Street about the commercial impact of the title game.
Here’s an excerpt from JWS’ column. For the full article, head to Sportico.com
“JWS’ Take: It’s obvious schools en route to the championship game would see multimedia sponsorship (think: radio broadcasts, digital assets) revenues grow. As Thomas Stultz (president, JMI Sports) said: “There [is going to be] a lift because [the two teams are playing] an extra two games. The more games you have, the more opportunities [there are] to sell advertising and to add value for your corporate sponsors.” JMI Sports and Learfield represent Georgia in tandem; Alabama is a Learfield client.
The JMI Sports president estimated a run to the National Championship is worth “a high six-figure lift or a low seven-figure lift [in sponsorship revenue] depending on the school. I’ve seen it at $400,000. I’ve seen it at $1.2 million.”
The incremental revenue realized is not all profit. Stultz noted that rights holders “tend to spend a lot of money on hospitality, entertainment, additional broadcasts, carriage fees to stations to carry the broadcasts etc…The net is an improvement, but it’s not a windfall.”
With Power Five schools typically retaining ~50-60% of net revenues, the rise in sponsorship revenue usually “adds up to 4-5% of what [the school] would do [annually] otherwise,” Stultz added.
The incremental sponsorship revenue gained is small in the grand scheme of things, in part because both of these schools have operating budgets in excess of $135 million. But the multiyear nature of many large sponsorship pacts, which often include exclusivity provisions, also limit the schools’ ability to strike when the iron is hot.
So, too, does the quick turnaround between the CFP semifinals and the championship game. As Stultz explained, rights holders “don’t know until a week out [which teams] are playing for the championship. So you don’t know what assets you have to sell until you have [that clarity], and it is not like sponsors are just sitting there with a whole lot of money to spend at the last minute.”‘