June 23, 2014
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LEXINGTON, Ky. - In one of the most valuable partnerships of its kind in college athletics history, University of Kentucky officials announced Monday that JMI Sports has been awarded UK's athletics and campus multimedia marketing rights with a 15-year, $210 million agreement.
"This partnership reflects the fact that the University of Kentucky is a national brand with the largest and most loyal fan base in all of intercollegiate athletics," UK Athletics Director Mitch Barnhart said. "The size of this partnership - and our partnership with an emerging force in college sports in JMI Sports - will enable us to maintain and grow as one of the country's few financially self-sustaining programs, allowing us to continue to provide incredible educational opportunities to more than 450 young men and women as well as continue to partner with the university in unique and distinctive ways."
"It is critically important that our athletic program remain not only financially self-sustaining, but is also positioned to continue to be an aggressive partner in our academic efforts," University of Kentucky President Eli Capilouto said. "Nowhere else in the country is an athletics program more essential to building a thriving public, residential, research university. This partnership with JMI Sports helps ensure those contributions are strengthened."
Last year, Capilouto and Barnhart announced the UK athletics department was paying for $65 million of a more than $100 million Academic Science Building - an unprecedented partnership between academics and athletics in American higher education.
JMI Sports is an innovator in sales, marketing, and project management services to universities and professional teams. Kentucky will be JMI Sports' first client for which it will serve as its multimedia rights holder, but its leadership has substantial experience in sports business.
The company was founded in 2006 by developer and philanthropist John Moores and Chief Executive Officer Erik Judson. Moores is the former owner and chairman of the San Diego Padres and Judson has experience managing major sports development projects, including the Padres' Petco Park and the University of Oregon's Matthew Knight Arena. Tom Stultz, president of JMI Sports and a native of Greenup, Ky., formerly served as senior vice president and managing director of IMG College's multimedia rights business.
"We are delighted to be partnering with the University of Kentucky," Moores said. "Erik, Tom and I would like to thank President Capilouto, Mitch Barnhart and the entire UK administration for the confidence they have placed in JMI Sports. We are enthusiastic supporters of higher education, recognizing the many important roles these institutions play in our society. We look forward to working with UK to build the most innovative and successful multi-media venture in the country."
JMI Sports' college clients include the Southeastern Conference, Alabama, North Carolina, Oregon, Auburn, Colorado, Duke, Syracuse and many more.
"We are very impressed with JMI Sports and excited to begin working with them," Barnhart said. "Their work with many of our peers in college athletics and the experience of their team will make them an excellent long-term partner for UK Athletics and a valued part of the Big Blue Nation."
UK will receive a guaranteed rights fee in each of the 15 years of the contract, starting at $9.1 million in 2015-16 and increasing to $16 million in 2029-30. The agreement also includes a $29.4 million signing bonus to be paid over the first two years of the contract. The signing bonus will help the university fund important capital projects. The deal includes:
- Radio rights to UK's football, men's and women's basketball and baseball games;
- Stadium and arena corporate signage and game programs for all home UK events, other than those hosted at Rupp Arena;
- Naming rights to university athletics facilities and premium areas;
- Sponsorship on UKathletics.com;
- Game sponsorships and game promotions;
- Coaches' endorsements;
- Pre and postgame television shows and specials and postseason highlight DVDs;
- Video features on video boards, other than at Rupp Arena;
- Opportunities to develop UK Athletics Corporate Partnership Program; and
- The potential, at the university's discretion, to market campus multimedia rights, creating the potential for an integrated approach to multimedia rights and marketing - something few universities are doing.
As part of the agreement, UK Athletics will continue to provide premium advertising inventory in support of the school's academic mission. This advertising inventory is valued at more than $7.5 million over the 15 years of the contract. In addition to funding nearly two-thirds of the Academic Science Building, the Athletics Department also continues to contribute $1.7 million annually toward academic scholarships for the general student population, all while remaining one of the few self-sufficient departments in the country.
UK's current deal, which expires in April 2015, was worth $80.5 million over 10 years. Despite television rights no longer being included due to the SEC's broadcast agreements and the impending launch of the SEC Network, UK's multimedia rights deal increased significantly.
By comparison, the University of Alabama signed a deal in April reportedly worth between $15-16 million annually over 10 years, giving the school the third-largest multimedia rights deal in the nation behind Texas and Notre Dame, two universities with unique television agreements. Concessions, pouring rights, isotonic beverage, seat rentals and merchandise are included in Alabama's deal, while UK manages each separately.
The new agreement was awarded following a review process in accordance with the Kentucky Model Procurement Code KRS 45A. A Request for Proposals was issued in February 2014 and responses were received in April. The contract can be found at http://www.uky.edu/Legal/ORRContracts.htm.
Additional quotes from JMI Sports
Erik Judson, Chief Executive Officer, JMI Sports
"JMI Sports pursued this partnership with the University of Kentucky because it perfectly aligns with our strategy of serving an elite group of major universities. Our continual focus will be on providing white glove customer service to UK's sponsors and partners as part of our effort to enhance the UK brand and provide an outstanding platform for success for UK and its many stakeholders."
Tom Stultz, President, JMI Sports
"We are thrilled to begin a partnership with the University of Kentucky that will utilize much of our expertise, including producing and distributing quality sports content, selling and fulfilling innovative corporate partnerships, developing unique campus sponsorship programs, and delivering stadium financing and project management services. This contract enables JMI Sports to become established as a full-service provider of the highest quality university and sponsor centered services. And, knowing from personal experience how terrific UK's administration, coaches, staff and fans are as partners, we could not be more excited for what the future holds."
News Conference Transcript
An Interview With:
Mitch Barnhart, UK Director of Athletics
ERIC MONDAY, UK Executive Vice-President
ERIK JUDSON, CEO JMI Sports
TOM STULTZ, President JMI Sports
THE MODERATOR: We welcome everyone here for today's news conference to announce today's new multimedia rights contract. Very excited to have these gentlemen here representing their respective entities. For your benefit today we do have ASAP quotes, but in order to get it properly transcribed we need to have your questions recorded on the wireless microphones.
Mitch Barnhart: Thank you for everyone coming this morning. We appreciate it. I know it was a little bit of short notice for everyone. We appreciate you making time in your schedule to be with us today. Just a brief history about how we got here. Obviously we're beginning the 13th year of our administration at Kentucky. We came in 2002, and in 2004 we had a request for proposal out for a multimedia rights agreement, and that was awarded to Host and Gray Communications in 2004, and that term was a seven year term with a possible three year extension, which we opted to extend three years ago with IMG College at that time, who bought Host Communications. At the end of that agreement, which we are in the last year of that agreement, it is no longer we cannot extend it anymore, so we went back and created another RFP and went back out to the marketplace and went through the process through our UK procurement people and our committee. I wanted to thank them for what they've done. The committee worked extremely hard. It's been going since January, so many of them are in the room, and I want to thank them for that. Jason Schlafer of our staff did a great job of sort of shepherding this process through, and these things are difficult. There are a lot of pieces, moving parts to it, the landscape continuing to change. He has done a marvelous job with that. I'd also thank to thank from the University's perspective Bill Harris. Bill, thank you for your efforts, and James Frazier and Naomi Emmons. Thank you, Naomi, for everything. We know that these things, again, are very difficult to work your way through all that, and we thank you guys for all your time and energy in putting this together. The process and the goals for us, there's make sure that we achieve out of these things. First and foremost, we want to have a network that our fans can absolutely stay in contact with University of Kentucky athletic teams, the successes that we have, the things that we're doing. We want our young people to have the greatest exposure that they can possibly have as they participate at the highest level in the most difficult conference in America, and that's really, really important to us. So that was one of our goals is to make sure that our fan base and Big Blue Nation is taken care of. Two, we wanted to address some of our capital needs. There were some things that we still had left on our plate that we started 12 years ago. The transformation of our athletic facilities has been a huge, huge piece for us. If you look around this campus, and Dr. (Eli) Capilouto has done a wonderful job of helping transform our campus with regards to residential life and some of the other buildings on campus. We are part of that process, and we're excited about that. But there's a lot left to do, and there's some things that we wanted to address, and this gave us some ability to look at those pieces. Obviously we want to make sure we continue to be self sustaining. That's important as we look to the future of college athletics and making sure that we sustain ourselves and we continue to be a friend and a partner to the University. We have enjoyed that. We have enjoyed helping where we can help, and as a piece of that, one of the things we wanted to do was see are there opportunities to work with the University for campus rights. For us to use sponsorship opportunities, is there that window with regards to other areas on campus that might not be athletic facilities? So we put that in the RFP, and that doesn't mean that we will, it doesn't mean that we won't, and that's a University decision at a much higher level than mine, but we wanted to make sure that we thought about that globally rather than just individually. So we wanted to make sure that we were not in competition but rather in coordination with the University, and we're excited that that was a part of this process, as well. When we came 12 years ago, one of the things we talked about was resources and expectations. If we had proper resources, what were the expectations for our programs. Could we be better than who we were? Would we be able to grow our programs and give opportunities for our student-athletes to be competitive in the most difficult league in America and nationally? Could we do that? And as we experienced one of the best years that we've had in the history of UK sports this year and many of our coaches are here in the room, we've had an opportunity to watch teams compete at an extremely high level, on a national level. We've watched them compete in the classroom with the best GPA in the history of our program. We've watched them graduate. We've been partners to the University in a lot of ways. It's for everyone else to decide, but it's been a really, really fun year for a lot of our teams. And that has come out of the ability for us to give our coaches resources and facilities, and we're not done yet. We've got more that we want to do, and so we want to continue to reach towards those goals. As we do that, you've got to have partners, and you have to have people that you want to work with. So we go through the process, we start in January and we get to a spot, and it's like running a race. It's getting to a game. Sometimes the race goes fairly smoothly and it's real easy early on, you get to the finish line and they get hard. These things get difficult, and you've got to have somebody committed to the process. So your University staff is committed to that, and from your partner's side, you must be committed to that. We're very, very fortunate and happy today that we've got some folks that are no strangers to the world of sports, and absolutely are at the top of the line in terms of friendships to the different places in the world of sports. Erik Judson is the CEO of JMI Sports, and he joins me today with Tom Stultz, who is the president of JMI Sports, and their history in the sports world is no accident and no mystery. The owner of JMI Sports is John Moores, and John was the owner of the San Diego Padres. He was a regent in the University of Houston system, and he was chairman of the University of California board of regents, so he's very familiar with higher education and its impact and how it can be impacted in so many unique and cool ways through the world of sport. Erik was a former professional baseball player, and he's very close with the San Diego Padres organization, has obviously done a lot in the world of facilities and sponsorships and all those things, not new to any of this, and so we're very, very thankful. He brings an unbelievable 17 years of expertise and the things that he has done in the world of sports beyond his playing days. And then Tom clearly has been a very close friend of this University for a long time, is just a little bit of a Big Blue fan (laughter), so we know we've got a little bit of blue in here, and that's a really cool deal for us. We're so excited that he is back with us and working with us through JMI and the partnership that we've created here today. I'd like to thank John for his investing in the University of Kentucky in such a unique way. I'm looking forward to having him here on our campus and having a chance to show him around a little bit to that end. But this agreement spans 15 years. Many of you have got the details of it in front of you. Eric Monday, to my left, is a guy that says, this is how these things work. He has unbelievable expertise and has done a great job of helping us do things on this campus that we've never done before, and this is another step in that direction. I want to thank him for what he did today. That's sort of how we got here, and we're excited about what this means for the University of Kentucky and the stability it provides for our program going forward and just the unbelievable opportunities we think it creates for us as an institution, not just an athletic department. With that, I'll stop and we can begin to take some questions if that's okay with you guys.
Q. Mitch, some of the things mentioned included that you want to get done capital wise, project wise, the baseball stadium, some of those other things. Do you have a timeline for starting those projects now that you have some cash in hand?
Mitch Barnhart: Well, when we came here, the list was long, and we've been fortunate we've been able to again, with the help of the University allowing us to do some things, we've raised some money and done some things, we've gotten to a spot we've been able to chip away at that, but there's still some pretty good things on our list. We're right in the middle of a stadium renovation, which is obviously critically important to our football program and making sure that that has a chance to see itself to fruition, and we're in good shape. We're sort of down the road on that. We've got to keep going. It's a little late to stop that one, so we're good. I'm glad we got that thing underway. I'm excited about that. It is really going well. We've got a football training center. We've gained approval for that. We're looking forward to getting that going. Clearly we've got a baseball stadium, we want to get that as a partnership to the University. Again, there's an area of campus that we are trying to free up for them, and we want to move the baseball stadium over on Alumni Drive, and we'll have a really neat complex as you come in; you'll have the softball, soccer, baseball, coming over the hill is our football training center and a new stadium. We think it'll be an unbelievable entree to the University, and we're really excited about that. An indoor tennis center, we've got to do some work on our indoor tennis center. That has got to be renovated. There isn't any doubt about that. We've got to get that fixed up. And we've got some work we want to do at Memorial Coliseum, and then obviously there's maintenance and repair work that you continue to do on your facilities at all times. But we've made a lot of progress. I think we've done a couple hundred, $250 million worth of construction in some way, shape or form, closing in on $300 million when you include the football stadium. The University has got over a billion dollars of construction going on right now on campus when you look at all the dorms and residential life. It's an exciting time on our campus, but we've got a lot of things (to do). What we'll do is sit down and assess that and figure out what the next best right thing is to do, the next step, and how quickly we can move forward. We've got to work through all the processes of the University and the state regulations. Lots on our plate.
Q. Erik and Tom, JMI getting involved in this kind of venture for the very first time, why was Kentucky the target in this particular I know this guy here (Tom) had a little bit to do with that, but why was it such a viable target?
ERIK JUDSON: Well, as Mitch says, we've been in this industry for a long time, and our history is professional sports. John owned the Padres for many years and I think was considered one of the real important leaders of baseball for a long time. But as we started JMI Sports based on really development of Petco Park, which was a great experience to revitalize part of downtown San Diego, we realized the college space was really where the opportunities lie. In thinking about that, and we've worked on some capital projects, the multimedia rights space was very attractive to us, and I was able to coerce Tom to join our company two and a half years ago with really the multimedia rights as the key component of that hire. When you start thinking about entering that business and really thriving that business, you're looking for great partners and a flagship partner, so we're very pleased today. We thank Mitch and the president and Eric and the rest of their team for giving us the opportunity, for the first time, JMI Sports to be multimedia rights partner. Having Tom Stultz with decades of experience in this and true blue blood and a love for Kentucky, but more importantly an understanding of the space, an understanding of the marketplace. We felt it was the ideal opportunity, and we pursued it very aggressively. It was a very rigid process to be sure but one that we knew that we had put our best foot forward and then some to make it work. By having Tom as our key employee on this, and we're proud to have him as our president of the company, John and I felt that it was a great opportunity and one that we felt having Kentucky as a flagship would be a great opportunity for us to then continue to grow the business along those lines.
TOM STULTZ: The only thing I would add to it is it really helps to know a property when you're bidding and committing $210 million to it. You know, I don't think I know any property that we had at Host Communications when I was running it (was) any better than this property and the talent and all the radio affiliates and the sponsors, so we know how solid it is, and we felt like it was just positioned very well for a lot of new innovation and growth, but it was already doing really, really well compared to other multimedia rights programs across the country.
Q. What exactly are campus rights, and why was it important to you guys to sort of mesh campus rights with athletics rights?
ERIC MONDAY: When you talk about campus rights, we're looking at the non athletic side, and so looking at opportunities to expand on relationships with existing partners that we may have in the athletic enterprise but new partners. It could be everything from digital signage opportunities on the campus and wayfinding like another institution is doing. It could be access to students. It could be internships. It could be employment opportunities, guest speakers that we bring to the campus. So looking at the full extent of how we build stronger relationships with corporate partners, not just on the athletic side but the institutional side, as well.
Q. And why was it important to keep those two together for you guys?
ERIC MONDAY: Well, it's important that we're working together on both sides, that we're not providing opportunities maybe on the University side that we're not on athletics. I think there's a way to grow the whole and look at how we can expand on existing relationships, as well.
Q. Mitch, with everything that's happened with Rupp Arena here lately, I think one of the media questions people will ask today when they see this dollar figure is does this position you guys financially to start thinking about an on campus arena? Is that even in the discussion here?
Mitch Barnhart: You know, I don't want to get this is not about the Rupp Arena piece. This is about our sustainability and making sure that operationally and resource-wise we have the ability to look to the future and keep our program where we are competitively, where we are academically, what our kids are doing away from the game. So I don't want to cloud the issues here. This is not about that. This is about how we best serve the Big Blue Nation, how we best serve our fan base, and then those other things take care of themselves over time. We'll figure that out. We'll work our way through those pieces. This is about multimedia rights, and people don't need to read more into it than that.
Q. Mitch, from a fan standpoint, how does this change where they'll hear the games, who's calling the games? Does any of that change at all?
Mitch Barnhart: I don't see that changing right now. Clearly we always want to be better, so what allows us to be better, there's going to be new things in technology I'm sure, there's going to be new pieces of ways to communicate. We've got to make sure we're on the cutting edge of all of that. Clearly the SEC, the blending of the SEC Network with our multimedia rights package probably is as good a landscape as you want to be in in terms of the University of Kentucky. We have the opportunity now to reach places through the radio stations that we have in our footprint or in our inventory, whatever you want to call it. We have incredible opportunities, I think, to give our fans what they want, and that's to listen to the great talent that we have on the radio, the opportunity to see our teams play when they're not at home. All those things are available to our fans right now, and that's what's most important to us right now is to give them an opportunity to see the great teams we're putting out there. We've got some great teams we're putting out there, the least of which we just saw our softball team go to the College World Series and had an opportunity to watch them on ESPN for quite a bit of time, and that was pretty neat. That's just a little snapshot of what I think is possible.
Q. Mitch, can you explain how much the coaches' endorsements will change with this? What does it open up for all your coaches besides basketball and football?
Mitch Barnhart: I think what happens is this is a long standing make sure that all your endorsements and all the people that want to be a part of your program are centralized in one spot. So I don't know that much changes for us. The process will still be very similar to what we've had. In the early days of multimedia rights agreements and these kinds of things, part of these were borne out of coaches were going out and doing their own deals and universities were trying to figure out how to catch up. So it changed about 25, 30 years ago, and it's sort of got to a spot where it is centralized in one spot, and this is how we sort of run our program. The good news is that over time, as our budgets have grown, there's been less dependency on these kind of multimedia contracts in terms of the percentage of the budgets. Having said that, this is still absolutely paramount that we have these kind of things in place to protect the greater good of what we're trying to be about and the stability of our program going forward. It gives us the great foundation that we need and helps us be able to continue to move our program the right way.
Q. Mitch, were there any concerns about going with a company that maybe hasn't done this before athletics wise with the multimedia deal? Are you concerned about being a guinea pig in any way?
Mitch Barnhart: With their experience, no, not at all. When you look at all the higher education experience that Mr. Moores has, I'm not talking about sports, he's got experience in higher education. He understands what it means to be at a University system at a big place, and then, oh, by the way, he owned a major league baseball franchise. It's a pretty big operation. Then you bring Erik in and his expertise and all the things he's done in terms of facilities, all the things he's done from a playing perspective when he played the game, and then you bring in a person who we have absolute trust and love for in Tom and bring him into a situation where he brings all his years of media experience and knowledge of our state, and it's a wonderful blend. So I don't think that we miss a beat. As a matter of fact, I think we get better, and I love the focus that they say we're their flagship and we're their folks, and I like that a lot.
ERIK JUDSON: I want to clarify one thing. I didn't play very well. I've heard a couple times I played baseball. That should be eliminated from my résumé, by the way. (Laughter.) Just a quick follow up on that. We pursued Tom Stultz for this type of opportunity. John, as I said earlier, was an amazing baseball owner and is still very involved in professional sports, and as Mitch says, we've got a long history with higher ed, as well. We've built big projects, but Tom and I for the last two and a half years now have been running around this country analyzing new ways to improve the business, in fact. We come, I think, with a fresh perspective, but a fresh perspective that's been really built on a foundation of many years of experience with Tom at Host Communications and IMG College previously. I think our experience is more than enough of a foundation, but I think actually our perspective is what is going to grow the business, and the approach we are going to take is going to have a flagship in Kentucky that we're going to give a tremendous amount of focus to. Our organization takes this very seriously, and I think the financial contribution certainly speaks to that, but Tom and I personally are going to be involved in this property every day. Our greatest expectation is that this partnership with great people and great partners is going to flourish. We are talking about a single focus now. I'm not telling you that we're not pursuing other deals, but as we do pursue other deals, we are looking for just a handful of select universities to be our partners because we think we can do that very well, and that's our intent, and Kentucky just happens to be the first, and it happens to be the first that Tom has previously run. So I think we're more than equipped to do an excellent job here.
Q. Mitch, if you have one of these press conferences starting in 2015, will any of us be sitting in here? I see in some of the literature wanting to get back some of the audience from bloggers and media types, and the idea of running your own TV and radio stations, how do you view that piece of this?
Mitch Barnhart: Let me understand. I'm not quite sure I understand.
Q. It sounds like you guys, the intent is sort of to start your own media network.
Mitch Barnhart: Are you trying to get a job? (Laughter.) We're not trying to reinvent. We want to make sure that we're on the cutting edge of what's going on, and I don't think that we're the ones that have ever gone out and said this is the way it's got to be. You know, I think the landscape always changes. We've seen that, and this is starting my 17th or 18th year of being an AD, and I can remember back when I first started, none of this was going on. I know we find that hard to believe, but in 1998 my first AD job there was no internet. It was just getting started, and there wasn't any of the blogging stuff that was going on, and it was really you had sports talk radio and a little bit of that, and you had SportsCenter on ESPN, and outside of that you had nothing. You look at where we are today, yeah, it's changed dramatically. Are there going to be changes? Yeah. We're going to have to figure out how to adjust and change and go on, and I don't think the goal is to create our own news agency. We've got to do what we do best, and that is hopefully provide opportunities for young people to come participate in the sports that they love and give them a chance to play at the highest level we can play, win as much as we can win, help them graduate and get jobs and go on to the things that they do. It's not our job to recreate media. That's a piece of it. I mean, we've got to figure out how to manage all that and work with you all and do the best we can do. But that's not our primary purpose. I know that shocks you. (Laughter.)
Q. Mitch, under this deal, do you foresee the possibility of naming rights for facilities with corporate partners?
Mitch Barnhart: Yeah, I think those are things we're going to have to look at. Again, changing landscape. I don't think that that's new to the world, and that's part of this. If the right partnership comes along and the right sponsorship, we've talked about that. That's got to be something that we're in a finite world in terms of ways to grow the revenues necessary to run sports. It's hard. There may be some creative ways we do that, and part of that might be naming rights, and that's not an unusual deal in our world, in today's world. As much of a traditionalist as I want to be and am, I also have to be a realist, and you have to think, okay, what is in the best interest of this athletic department and this University, and can it absolutely give us the best chance to keep doing the end game for us, keep our programs moving in the direction we've got them going.
Q. This is a 100 page deal, a lot of ins and outs to it. The basic fan wants to know how will this affect my experience, so I'm wondering just from your perspective, nuts and bolts, how will things change for the fans?
Mitch Barnhart: Well, I think I would defer to Tom and Erik and say I know they've got some ideas. I'm not saying today, don't put them on the spot today. We're going to have some things that hopefully we'll continue to grow. There's things we've heard that we started the Big Blue Initiative, the fan's first we wanted to hear we've got 1,500 emails from people and all these ideas and we sort of categorized them in spots and said what is important to you. Things pop up, and things we can address in this agreement. Wi fi in the stadium. Big deal. That's a big deal. So how do we address that? How do we address that on our campus? Is that a campus issue? I don't know. Those are things that I think we have a chance to talk about and address. What does it look like to have video feeds in different parts of our stadium that maybe aren't available now. What are we doing with restrooms and concessions and how do you maybe dovetail that into some of these things that these guys bring that expertise to us? There's all kinds of things that you can talk about. The basic premise on any of these things is making sure your broadcast is out there and you've got the voice of the Big Blue Nation up and down the coast at night when we have a chance to gather all our listeners making sure that our games are broadcast so everybody has got a chance to hear the voices of Tom (Leach) and Neal (Price) and all the guys that do a great job of calling our games for us. That's first and foremost, then all these other things. That's when the creativity and the play and the fun happens, and hopefully I think that's what these guys bring to the table.
TOM STULTZ: If I might add, when we bid on these rights in 2004 at Host Communications, a large part of it was the local television package, and that's gone now because of the SEC Network. During that time, the way fans gather and access information has changed, and what we tried to do with our proposal was to be as creative as possible to throw out a lot of new ideas that we can work with our partners and to find ways to engage the fans to make their experience better, to enhance it, and to tighten the relationship between the University and those fans and the University and its sponsors and the sponsors and its fans. So we'll be looking for a number of ways to do that, but we think that's a critical part of making up for the inventory that's lost to the SEC Network, which further enhances the UK brand by giving it a national platform on the games that were local, but we're missing the opportunity to have the revenues to those local games. So we needed to find ways to be as creative as possible to reach the fans in ways that they access information today but not to abandon any of the things that made this property great in the first place. So it's going to be a lot of fun to put those pieces together. My background before running Host was newspapers, and we struggled with that a lot. I think we need to be more proactive and creative as an industry, and I think that's what we're trying to do on the multimedia side is to innovate, create and provide brand new opportunities while strengthening and enhancing what we've always done well.
Q. Can you give an example of one you gave to UK that might have interested them?
TOM STULTZ: We talked about really starting with the social media platform, and backing back into it. When you read that we say we may try to do something with the radio station, it doesn't mean we want to own radio stations, it may mean we're going to have a whole group of people who have a lot of talent creating content that we'll be distributing in a number of ways to engage the fans and to provide them information because everyone in this room knows the UK fan base has an insatiable appetite for that. You can't get enough information, and they're all over the place getting it, and we want to make sure that we get a chance to give our sponsors and the University a chance to participate in that process. I think it complements it because the more that's out there, the more people feed on it. But I also that's a big part is kind of looking at one of the nice things about being away from it for a while is when you're sitting together working on an RFP response, you look at it as if you were creating something from scratch as opposed to tweaking something that you've always done a certain way. So the biggest way we'll be sitting down and looking at it is what do the sponsors really want, how do we go with them selling media and now we're trying to sell solutions and how do we engage the fans starting with where they want to get the information and how they want to get it and when they want to get it and then backing into how do we really monetize that and combining all the elements. There's not really one idea. It's more just a philosophy that says let's start with the fans, and if we meet their needs, then we'll meet our sponsors' needs. If we meet their needs, we'll meet the University's needs, and if we meet those, we'll be happy and we'll be fine.
Q. I think you may have just answered my question. I've had a lot of people ask me with the SEC Network scarfing up all the TV rights, why would a company get involved in something like this, and clearly you think there's enough out there right now that you're confident that you can get this done because there's a lot out there still; is that right?
TOM STULTZ: Absolutely. As I said, this brand is a local, regional and national brand, and its coaches are well known. They're well established. There's opportunities to look at their endorsements in different ways. There's opportunities to look at the media in different ways and to create content that engages the fans and doesn't take anything away from the outstanding job that I know ESPN and the SEC Network will do.
Q. Mitch, with everything that's going on now with the NCAA, with the O'Bannon case with the possible changes that could be coming up, how difficult or challenging is it to plan for the future when you don't really know from that side how the future is going to be?
Mitch Barnhart: I think that our goal is just to keep our nose to the grindstone in terms of what we know we do. There's decisions that are being made in different spots, whether that's the legal system or the NCAA system, that we'll have to adjust and adapt to. Again, the landscape changes for us in everything, whether it's media, whether it's governance, whether it's that piece. It changes all the time. The one thing we know that is constant is the support of the Big Blue Nation. We know that that's constant, and we know that we have got to make sure that we service that well, and so it'll be our goal through this agreement and other things that we're trying to do to make sure that people, one, have a really good reason to come to our venues to watch our teams play, and two, if they can't get there, then we absolutely provide them the best information that we can get them so they can enjoy the Wildcats. The rest of that will have to adjust and grow as we gain information, but I don't think there's anybody that has a crystal ball in that. I would love to talk to them. That would be great.
Q. Erik Judson or Tom, can you compare what this agreement is compared to some of your other clients, how much more you'd expend on this compared to some of the other clients that are listed on the release?
ERIK JUDSON: Well, when it comes to expending energy, Mitch said this a moment ago, and I think I'll reiterate it. This is a flagship property for us. There is no question that this is a very high priority. But one thing we pride ourselves on a great deal, we talk about how important it is internally. We want every client, whether it's a $15,000 consulting agreement or a $210 million guarantee, we want them to feel as though they're getting excellent service. The order of magnitude is different, but as I said a moment ago, the hands on participation from myself, John's engagement, who I have been with now for 18 years and know what his commitment is, and then Tom's experience in actually running this property and day to day involvement I think will be making our partners very proud of the relationship they've decided to enter into with us. We'll give it every bit of attention that we need to, but at the same time we've got other partners that we need to support, as well, and we commit to them that we'll treat them the same way.
TOM STULTZ: From a point of reference, 10 years ago, the $80 million deal for 10 years was seven plus three, but we always counted it as 10 and Mitch counted it as seven plus three because we had to earn the last three. But that $80 million deal was the largest ever done at that time, and everybody in the country said it was going to bankrupt us, and it actually made Host Communications. It revitalized it. It didn't make it. Jim made the company, but it revitalized the company by holding onto it and growing it, and that agreement has held up as still one of the top five in the country even though it's 10 years removed. It was that strong. This one comes out and it's the top two or three, and with 15 years and the growth of that, and we expect that to be the same case. This property, because of the amount of inventory, the value that the coaches bring and their openness to participating in endorsements, the tremendous radio network all across the state, the flagship with WHAS, all the things out of the ability to have that 50,000 watt station, all the things this property has that are unique make it a winner, and it is a top tier rights deal. We just have to make sure that it works out as well as the other one did.
Q. You sort of answered this generally, but more specifically, as we seem to be hurtling towards athletes getting a bigger piece of the pie or something else, with a deal like this do you have to almost earmark in the back of your mind to plan for having to have some more money come out of the budget for something like that down the road?
Mitch Barnhart: Let's start by saying I want what's best for our student athletes, and that's first and foremost. We've never not wanted that. We've always said that is a very important piece of the equation for us. Others will define what that looks like for us, and we will respond to that accordingly, but I think we've always taken pride here that we have treated our student athletes well and done whatever we can do within the rules to make sure that their experience was full and that they had, again, all we could do within the rules. If those rules change, then we will adjust, and I think, again, landscapes change, and it may change again, and it may change two or three more times before we get out of this and go off and do something else. But we'll adjust, and we'll figure that out. The eye for us has always got to be on what gives us the best opportunity for our student athletes to compete and go to school, because without them, we don't have a department and the media rights that we have here are there's no one to broadcast for and no one enjoys listening to the games if we don't do a good job of taking care of our student athletes.
Q. Do you have a timeline for the timeline of when you want to figure out where the money goes, what facilities are most important? Do you have kind of something in your mind that
Mitch Barnhart: There's lots of people in this room that have a timeline. (Laughter.) No. I mean, I think we've got to be really diligent about our process. We've been very thoughtful about the way we've worked at our facilities. I've got a great staff. They have worked really hard to put in process things that allow us to make very steady progress. I think at times people get frustrated because we may not be the flashiest. Style points, if that's what you're after, we're probably not your style points leaders. But I would rather have some substance about the way we've done it, have a solid foundation, and built to last. And I think we've done that. And I don't think our philosophy will change. The guy to my left has been a wonderful advocate for athletics. He's been other places where he has seen blueprints work different ways. He brings that expertise to us. We have certain needs and things we want to get done. Our coaches anticipate that we will continue to grow our program. Our athletes want to continue to grow our program. We want to continue to grow our program. But we've got to do it at the right pace, and so we'll take our time. We'll be thoughtful in those decisions. But I think anybody that knows me knows in the back of my mind I've got something I'm thinking about.
Q. Could you share that?
Mitch Barnhart: No, it's so far back there.
Q. All of your major coaching contracts call for multimedia deals or parts of that. Are you going to have to rework contracts with the new deal or how does that work?
Mitch Barnhart: We're good, unless you want to do something.
ERIC MONDAY: No, we're good.