A look inside Arkansas' $137 million agreement with IMG

Arkansas play-by-play radio announcer Chuck Barrett, left, and color analyst Quinn Grovey broadcast during a practice Saturday, April 29, 2017, in Fayetteville.

— As the target audience for college football changes, so has the research into what causes fans to buy — or not buy — tickets.

Nationwide attendance fell at college football games for the sixth consecutive season in 2016. Arkansas has been one of the outliers to the trend, though, increasing its total home attendance last year for the third consecutive season.

Still, Arkansas officials are cognizant of the fact that a number of criteria could change their good fortunes, ranging from a bad season to bad amenities.

In an effort to keep up with consumer demands, Arkansas recently signed a 10-year extension to its multimedia rights agreement with IMG. The new contract guarantees Arkansas $137 million over the course of the agreement, but most notably, it also includes a $6 million investment from IMG to install a comprehensive wireless Internet system at the Razorbacks’ three largest venues — Donald W. Reynolds Razorback Stadium, Bud Walton Arena and Baum Stadium.

IMG will pay the costs to install Wi-Fi infrastructure at a midpoint on Razorback Road, most likely the basketball arena. The Razorbacks are in talks with Dallas-based AmpThink to develop such a network. AmpThink has installed similar systems at 25 professional sports stadiums, including the new Mercedes-Benz Stadium in Atlanta where more than half of the Wi-Fi access points are located underneath the fans’ seats.

Currently, the only ways to access the Internet at a Razorbacks home game are through the University of Arkansas’ password-protected Wi-Fi network or by using cell phone data — both of which can slow considerably on game days because of bandwidth constraints.

“Fans say it’s not the highest thing on their list, yet the IMGs and we all believe it is important because fans are constantly on their phones, on their iPads, they want highlights and want replays — all those things like Facebook, FaceTime, tweeting,” said Jeff Long, Arkansas’ athletics director. “A game is a social situation and they want to share that social experience.”

Long said IMG approached Arkansas about adding Wi-Fi because it is important to in-stadium advertising sales.

“The Wi-Fi piece is a major investment by IMG and was a focus of ours,” Long said. “We knew this would be the best way to get WiFi into those stadiums, to build the expense into this IMG contract.”

The high volume of social media use on sites like Facebook, Twitter, Instagram and SnapChat are at the crux of the Wi-Fi demand, said Chris Freet, senior associate athletics director for external affairs at Arkansas.

“It takes very low bandwidth to send a text message, but it takes four or five times that to post a picture and 10 times that to post a video,” Freet said. “That can grow even further upon how long the video is or if it’s a live video. Part of the sports experience nowadays for most of our fans — and certainly for every one of our students — is sharing their experience on those platforms.”

Creating a network to service close to 80,000 spectators at the football stadium will be the most challenging aspect of the project, Freet said. The network should be in place by the 2018 season when Arkansas’ stadium expansion is completed.

“Quite frankly, basketball and baseball could play together every single day and it wouldn’t meet the bandwidth expectation we’ll need for football,” Freet said.

The Wi-Fi component might help enhance another key element to in-stadium satisfaction: cellphone coverage.

Arkansas partnered a few years ago with AT&T to create a Distributed Antenna System — or DAS network — at the football stadium. Other wireless carriers, such as Verizon and Sprint, pay AT&T — the market leader in Northwest Arkansas — for time on the DAS network.

Freet and Long said the DAS network has improved cellphone quality for all carriers at the stadium, but there still are slowdowns. Because so much of cellphone communication involves text messaging — and text messages can be sent using Wi-Fi — the strain on the DAS network could be alleviated with an improved Wi-Fi network.

“AT&T continues to invest in that network, but you’re not going to be able to get omnipotent coverage,” Freet said. “The plan and the goal with Wi-Fi is to assist in that demand. At no given time would you want everyone to be on the cell network or the Wi-Fi network. What you want is for them to balance the other out and relieve the stress upon either one so that both can perform at a high level.”

Partnership

The agreement with IMG is the culmination of a three-year negotiation between the parties that began in 2014, just more than halfway through the initial contract.

Arkansas signed a multimedia rights — or MMR — agreement with ISP Sports in 2008. IMG acquired ISP Sports two years later.

Freet said the new deal is the fifth-most profitable MMR agreement for a college program, although other large programs like Ohio State, Oklahoma and Florida are likely to sign new agreements in the next 18 months.

Alabama (Learfield; $16.7 million); Texas and Georgia (IMG; $15 million); and Kentucky (JMI Sports, $14 million) are the only programs with higher per-year averages than Arkansas' new deal with IMG. Freet said the agreements at Texas and Kentucky are not apples-to-apples comparison to Arkansas because Texas’ agreement includes advertising for the Longhorn Network owned by ESPN, while Kentucky’s includes a deal with the academics side of campus.

Arkansas’ agreement with IMG is only for athletics.

“We generally think it’s a top 10 deal for quite a few years,” Freet said. “It’s just a really strong statement about the Arkansas Razorbacks and the partnership with IMG. We’re only a state of 3 million, but the value they’ve found is pretty exceptional to be in the top 10 of collegiate athletics.

“Whether it’s Ford or AT&T, Nissan — name a partner in our portfolio, if they’re working with the Razorbacks they can get to 3 million people in this state. We’re one of the only brands in this state that, from a partnership standpoint, can deliver the masses from all of Arkansas.”

The ability to sell national advertising was one of two main draws to outsource multimedia rights in 2008, Long said.

“We didn’t have the expertise in sales,” Long said. “The IMGs and Learfields, they all have training staffs and they all are trained in sales on a regular basis. When you do it in-house, you typically have one person and they have many other duties on top of that, so they just don’t have the time and expertise to go sell on a 24-7 basis.

“IMG can combine Arkansas with other programs in national sales deals. Arkansas, itself, can’t get a national sales deal, so that adds to the ability to generate more funds. Every day, they’re focused on selling the Razorback brand, and they have the training and expertise and they have the ability to get national sales dollars.”

The other draw was the revenue that could be generated through an agreement with a national company. From 1995-2008, Arkansas’ multimedia rights were owned by KATV, an ABC affiliate in Little Rock that ran the Arkansas Razorback Sports Network (ARSN).

When ISP Sports took over the rights, Arkansas rebranded its network as the Razorback Sports Network (RSN) and the name remained the same after the IMG takeover in 2010.

Arkansas’ final contract with KATV was worth about $2.9 million per year, according to figures provided by officials. Its most recent payout from IMG was greater than $7.7 million and could grow to $15.6 million by the final year of the agreement in 2027-28.

But there are some key differences in Arkansas’ partnership with KATV and the one with IMG. Among them: the IMG merger helped Arkansas merge all of its radio properties into one entity. Prior to 2008, Arkansas’ baseball and women’s basketball broadcasts were agreements made independent of the football and men’s basketball contract with KATV. Now, all four sports are broadcasted under the IMG umbrella and the announcers — such as play-by-play voices Chuck Barrett and Phil Elson — are employed by IMG, but chosen by the Razorbacks.

The most notable difference between IMG and the old KATV days, however, is the multimedia component. KATV’s multimedia definition went so far as TV and radio broadcasts, whereas emerging media has taken IMG into the realm of digital advertising.

Any advertisement you see at an Arkansas game — from the one on your cup at the concession stand, to sponsored replays on the video board, to the logo on Bret Bielema’s headset — is sold by IMG. The company also is responsible for all advertisements on the Razorbacks’ team website and helps set up special events on game days, such as a concert by country music artist Brad Paisley following Arkansas’ 2015 game against Toledo in Little Rock.

IMG has a staff of eight employees in Arkansas — seven in Fayetteville and one in Little Rock.

“The team on the ground is fantastic to work with because they understand the business and they understand Arkansas, and that’s a great combo,” Freet said.

“Behind the scenes, the advantage is learning from school-to-school and what can work with regional partners, whether those are sponsors that are at an SEC institution and in our portfolio, or just understanding what works best in the fast food category or the technology or insurance categories.”

IMG owns Collegiate Licensing Co., which offers trademark protection for any apparel featuring the official logos for more than 200 universities, including Arkansas. The company also offers other third-party services like ticket sales and tailgating services.

Until November 2015, Arkansas used IMG to manage its ticket sales, but that has since been brought back in-house. The Razorbacks also are in talks with IMG to extend its chair-back seating sales at football games.

“It’s a pretty niche service, so we think going forward it might be better for a third party to take care of that,” Long said.

‘Good for Fans’

Officials think Arkansas has been able to increase its attendance, in part, due to affordability of tickets.

The Razorbacks have lowered general-admission prices in the upper deck of Fayetteville games in recent years and have been creative in selling tickets. For instance, the Monday following Arkansas’ 41-38 win over TCU last season, the Razorbacks had an online flash sale for unsold tickets to the Ole Miss and Florida games for $41 apiece. The Florida game eventually sold out, while only a few hundred tickets went unsold for the Ole Miss game.

The Razorbacks posted a similar promotion to sell TCU tickets this week, offering them for $49 - the points value Arkansas scored in its season-opening win over Florida A&M.

Also last season, Freet helped initiate a ticket buyback program that paid buyers up to face value for unwanted tickets. The Razorbacks then resold the tickets for market value, sometimes below, sometimes above the initial offering.

Long said the revenue generated by IMG helps the department’s flexibility in selling tickets.

“We’ve dropped upper-deck ticket prices, lowered some concession prices and multimedia deals like this allow us to take some of the pressure off the need to raise those areas,” Long said. “Our ticket prices are still middle of the pack in the SEC and maybe below the middle.

“We’re proud of that because we do want to keep prices lower for fans, but yet we also know we have to drive revenue to be able to compete. It’s a delicate balance and we walk it, but a deal like this helps us.”

Because of donations and varying ticket-buying policies at each school, there is no good one-to-one comparison on SEC ticket prices. Perhaps the best gauge is to compare the lowest price point to obtain season tickets, which at Arkansas is $250 for games in Fayetteville (the annual game in Little Rock is sold through a separate season-ticket package) — fourth-cheapest in the conference among 2016 data.

“We have not raised our ticket prices to the level many of our competitors have,” Long said. “When you bring in funds like this, it takes the pressure off the need to raise ticket prices.”

A version of this article originally appeared in Hawgs Illustrated