One of the nation’s top broadcasting, branding and sponsorship companies for collegiate sports programs made a deal with several private equity firms to reduce its debt by over $600 million.
Plano-based Learfield, which has ties to more than 1,200 collegiate institutions and over 15,000 brand partners, closed the deleveraging transaction with lenders and equity partners that — in addition to cutting its debt in half — also adds $150 million in new equity investment, the company said Wednesday.
Learfield represents the athletics multimedia rights for many Texas schools including Southern Methodist University, Texas Christian University, the University of North Texas, Texas A&M University, the University of Texas at Austin, Texas State University and Texas Tech University, according to the company’s website.
“It frees up more free cash flow for us to invest back into the business and in our people,” Learfield president and CEO Cole Gahagan told The Dallas Morning News. “And by securing this equity infusion, it puts us in an offensive position with more fresh powder to go and innovate and disrupt.”
Learfield’s majority ownership now includes Clearlake Capital Group LP, Charlesbank Capital Partners and funds managed by affiliates of Fortress Investment Group LLC. Its previous majority owners — Endeavor, Silver Lake and Atairos — will retain equity stakes in the company.
The company offers licensed merchandise, game ticketing, donor identification for athletic programs, exclusive custom content, marketing initiatives, NIL (name, image and likeness) solutions and digital platforms. It has been the title sponsor for the National Association of Collegiate Directors of Athletics and USA Today’s Learfield Directors’ Cup since 2008.
“I think that now’s not a time to get distracted. Now’s the time to execute, and we have a phenomenal strategy in place that’s centered in fan data, it’s centered in technology, it’s centered in incumbency, and it’s centered around content and media,” Gahagan said. “The power of that is going to put us in a great position to execute and succeed in the years ahead.”
A sports powerhouse
Learfield was acquired by New York private investment firm Atairos in 2016, The Dallas Morning News reported at the time. In 2018, the company merged with IMG College in a $2 billion deal.Learfield
The company has five operating divisions: Learfield Amplify, CLC, Paciolan, Sidearm Sports and its core multimedia-rights business.
In 2020, Learfield launched Fanbase, a data-infrastructure platform for college athletics; in 2021, it announced Learfield Allied, an NIL program that helps brands leverage schools’ intellectual property in student-athlete deals; and in 2022, it announced Learfield Studios, a college sports media and content production group.
Learfield has a team of about 2,200 people nationwide, according to Gahagan. He said most work on college campuses through multimedia-rights partnerships.
Gahagan declined to share sales and revenue figures but said the company has had a record revenue growth rate over the last two years.
“We continue to have a responsibility to create more opportunities for student-athletes and for brands and for universities given our unique position,” Gahagan said. “The area around which we’ve seen the most enthusiasm and opportunity has been in content and media, and we only expect that to grow exponentially in the years ahead.”
Making the deal
Gahagan said that as early as about two years ago, amid looming maturities and changing capital markets, the company started the planning process for restructuring. He credited the company’s eventual success in the process to that early start.
Conglomerates like Learfield — a result of multiple mergers and acquisitions through decades — often create balance sheets with lots of debt. “It’s something that we’ve been shouldering for quite some time,” he said.
About three or four months ago, he said, the company considered whether it would pursue a court restructuring but instead decided to pursue what he describes as “one of the largest out-of-court restructurings in U.S. history.”
Gahagan said the only reason the company would have had to go to the courts was to exit some negative contracts, and that when executives realized they had a deal with equity and lending partners, “we decided to try and exit those agreements through conversations as opposed to exiting them in the courts, and fortunately we were successful in doing that.”
The company was also able to renegotiate terms of five significant college sports contracts in order to avoid a potential Chapter 11 bankruptcy filing, Gahagan said in an article published by the Financial Times Wednesday. Gahagan declined to name the schools.
“While extraordinarily challenging conversations, every single one of the athletic directors that we had discussions [with] was just an amazing professional,” Gahagan told The News. “And while difficult, we went right into problem-solving mode and landed in a spot with all five that allowed us to keep this restructuring on track and got it to a good place.”
