Learfield was started as a small farm radio network back in the early to mid-1970s and has since become the largest multimedia rights holders in college athletics. What business maxims – leadership, cultural or otherwise – have been central to Learfield’s success over the years?
First and foremost, you have to appreciate the value and significance of college athletics in American culture to truly understand Learfield’s success. That story is at the core of the marketplace we operate in, and as college athletics has grown in popularity over the last three decades, so too did the opportunity for development of an enterprise to help usher along the business operations of major athletic programs. Thus, Learfield’s tremendous growth is a reflection of the external drivers of the marketplace, coupled with our own unique value creation abilities.
That being said, when I reflect on our company’s growth and transformation from an internal standpoint, three core areas come to mind immediately: (1) our own internal culture; (2) the trust we have with our operating partners; and (3) our organization’s vision and alignment with our employees and the partners we serve.
When it comes to culture, we have always strived to create a company in which we cared deeply about our employees and the way we treat them, and in turn, expected our employees to reciprocate the same level of attention with our clients and partners. The internal actions and communication of a company are always the biggest influence on what that organization reflects back into the world, and by creating a company culture focused on its employees first and foremost, we knew we would insure positive and productive relationships with the people we serve.
The notion of trust goes hand in hand with a culture of caring and productivity. When employees believe that their employer doesn’t care about them, they have very little trust. And when you have no trust, you [the employee] will not put the organization or any of your fellow employees first. If you’re constantly worried about whether or not you will have a job in six months, all you focus on is self-preservation, and it usually comes at the expense of clients and your fellow employees. But when the company you work for does what it says it’s going to do, you will work with enthusiasm and a desire to serve and care for everyone around you.
Lastly is the vision and alignment we’ve had with both our internal and external shareholders and stakeholders. We have always strived to make sure that everyone our organization touches knows that we’re listening to their needs and paying attention to what the marketplace is telling us. More importantly, we use what we’re hearing to align ourselves with the people we serve and what they have hired us to deliver. Only then do we use the narrative we’ve created to execute.
If your only motivation is profit for the sake of profit, then in the end you’ve really done nothing, and ultimately your business plan is going to fail. You have to do what’s right for your clients and partners, irrespective of the financial gain that it brings you. If your expectation is to be in business for the long haul, then the money will work itself out after you’ve consistently delivered on what you promised.
As you reflect on Learfield’s growth, what points of inflection would you point to as major challenges in the company’s history, and how did Learfield excel through the head winds?
One of the key moments for Learfield was the shift from what would characterize us as a broadcast company in the early to mid ‘90s to a more comprehensive multimedia and sponsorship business. It seemed as though the sponsor marketplace was telling us that we couldn’t be so one-dimensional. It wasn’t that we desired to be so, but rather that schools hadn’t yet developed the understanding that even if they worked with a third party like Learfield, they could still have significant influence and control over the corporate partners we brought to the table.
It wasn’t until they were willing to turn over more of their content responsibility to us that we were able to comprehensively delve into the marketplace. Now, clients don’t just buy one solution; they buy multiple different dimensions of a portfolio of solutions that we have put together. Thus, we hit an inflection point in which the business evolved from a broadcast company into more full-service, comprehensive marketing and media sponsorship development business. That was in the mid to late ‘90s as it became increasingly common for schools to outsource more of the content and sales responsibility.
In addition, we started to develop more imbedded sales teams on university campuses, so those relationships became more aligned with the university and its athletic program. Any time you can be closer to your customers and hear what they’re saying, you have unique ability to capitalize on opportunities that may not have presented themselves otherwise. While we’re not a department entity, we now look, act, and behave in a manner that’s consistent with the [department’s] brand. That’s a symbiotic relationship that rarely exists in the business world.
The post-sale message seems to be quite clear, senior leadership for Learfield will remain intact, presumably keeping the culture consistent. How critical of an attribute was culture in the deal-making process with Atairos?
It’s my honest opinion that the sale of Learfield to Atairos will, from a cultural standpoint, change nothing. Part of the reason why Atairos was attracted in the first place was precisely the culture, trust and vision we have, as well as how we approach our partnerships. I’m sure that some prospective buyers vetted our philosophies on doing business and said, “Gosh, this company is too soft,” or “This company is too nice.” The reality is that we’re always going to be unattractive to a firm that thinks you’ve got to play hardball and beat people up to get ahead.
Atairos, on the other hand, looked at us and saw quite the opposite. In fact, they find it incredibly thoughtful, appropriate, and attractive that we’re interested in the wellbeing and performance of our properties, people and partners. There’s no chance that they would have ever gotten in involved with, or planned to get involved with, Learfield if they didn’t fully embrace how we viewed the world and appreciated the fact that the foundation of our company begins and ends with our relationships.
Learfield has undergone a trio of ownership changes over the last several years. What was the strategic reasoning behind each? Any lessons learned that were used in each successive transaction?
Each of the transactions we have been through over the years has been inherently different. The first with Shamrock was more about developing and executing on existing plans for organic growth. We were already in a really productive place and had a number of plans ready, but we needed backing so we could go into the marketplace and scale aggressively. The second, with Providence, was more about continuing to develop the core business while expanding into additional product and service lines. The goal was to become a more comprehensive asset to our university partners, and then develop a group of agnostic products and services that could serve the entire marketplace, not just our MMR properties.
With Atairos, we will be focused on optimizing the opportunities created as a result of the previous transactions. If you look at our business, the partners that we have in the marketplace use, on average, less than two of the eight products that we currently have available. That means that there is an incredibly long runway that’s yet ahead for us to provide more service and products to the 1200 schools with which we already do business. Part of the reason the product adaptation rate is so low among our partner institutions is: (1) we’re still very much in the infancy stage of many of those relationships, and (2) because some of the products we have only came into our fold in the last few years. I wouldn’t say we’re just scratching the surface—I think we’re much further along than that—but we do intend to fully equip our partners with as many products and services that make sense for their current business models.
If the intention is to see maximum value delivered to universities, then is it safe to say that there will be a continued natural evolution from athletic to full campus rights in areas of multimedia and sponsorship?
Our campus-wide initiative, called ‘Campus+’, is focused on adding value to major universities that to go in that direction. At the same time, it’s not necessarily the be-all end-all connector of multimedia and sponsorship rights. There’s still so much to do within the core business of college athletics that, for most schools, it doesn’t make a ton of sense to branch across campus just yet. Of course, with less funding from the state level, there is increased pressure on many institutions to become more self-sustaining. This is forcing universities to find new sources of revenue and thus presents us with an opportunity to be at the forefront of entirely new marketplace.
Campus+ wasn’t started with some simplistic notion of “let’s see if we can make money on campus.” Rather, it was a direct response to universities telling us that they needed a business structure that could help them find ways to create value that can support and sustain the institution without having to rely on other outside sources. Some have argued that it is forcing us to move away from our core business but I would argue to the contrary. We’re getting more and more deeply involved in college athletics because we now have the opportunity to go across campus and engage in more comprehensive and strategic marketing and sponsorship programs.
What has to go right, aside from the alignment of culture, for Atairos’ acquisition to really work for both sides? Conversely, if in a decade you look back and things didn’t work out, what will have gone wrong?
Firstly, it’s important to understand that Atairos is not a true financial buyer in this transaction. Most people think private equity and financial sponsors as one and the same, which for the most part is true. But in this case, Atairos is really characterized as a strategic fund; it’s an instrument that looks to invest in companies that are consistent in their backgrounds, experiences, opportunities, and businesses that fall within their expertise of media communications to maximize their potential. They are way more strategic and long term from how they look at opportunities than a traditional private equity firm, so there’s not going to be a turn of this business any time soon.
If I’m looking back a decade from now and saying, “How did this not work out the way we expected?” it will be because we strayed from those foundational parameters that have been at the core of our success all along. Learfield’s future has and always will be based on culture, trust and continued alignment – both externally and internally. We have to have alignment from our stakeholders about our strategy and what kind of outcomes we can expect from the approach we take, and then how to prioritize that and so forth. With everything Learfield does from here on out, we must ask ourselves whether we are delivering the highest level of value possible to our partners. It can’t just be resources either – it has to be strategy, development, and engagement. It’s has to be services and products—things that are moving our partners upward and onwards.
I wholly believe that we’ve built a great company, but the final chapters of our legacy have yet to be written. The decisions we make – and especially the ones we don’t – over the next several years will define how we are remembered for decades to come. We have an immense opportunity to help shape the future direction of college athletics, and maybe higher education as a whole, and that is a task that I am confident our people are ready take head on with great zeal.