The entrepreneurship team begins with Ben Sutton, a former WFU graduate and Associate Athletic Director in charge of marketing. Sutton approached Bill Merrifield, a former athlete and recent WFU graduate who was a member of his marketing staff. In 1992, both left WFU to launch what is now ISP. Sutton is a long-time fan of sports and broadcasting with a lifelong entrepreneurial ambition and a post-graduate degree in law. His nine years at WFU exposed him to social and networking capital, along with market and industry opportunity awareness in sports, particularly marketing. Merrifield is an ambitious, fast-learner that Sutton relied upon. Moreover, Merrifield most likely had a number of credible contacts to exploit in sports. Today, ISP now employs over 250 staffers. They have created a visionary culture that includes training and work programs such as the ISP Sports Academy, “Peak Performer Awards”, S.O.A.R., and W.R.I.T.E. Combined with competitive salaries and other intangibles, employee attrition rate is very low.
[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”3,5″ ihc_mb_template=”1″ ]
Sutton observed the media rights sales and acquisition process. Colleges negotiated their own contracts individually and did so in a fragmented fashion with various media rights companies, causing competition and conflicts for ad revenues between these companies. This caused the college to fail to maximize all media and ad revenue streams available. Sutton noticed this inefficiency. He planned to consolidate all of the rights and position himself as the intermediary, or distributor, of such rights between schools and advertisers. ISP started out with WFU then added a handful of other colleges. Now, ISP has expanded to over 50 client partners.
ISP approaches individual colleges to get the lease to all of their media rights. They offer a guaranteed amount in exchange, along with a percentage of the upside over that amount. In other words, they guarantee a school that they will sell X amount and then some. Then, ISP turns around and solicits advertising using these rights in all mediums for different client teams, stadiums, arenas, etc. Any amount they make beyond all guaranteed to the school, they keep as profit. ISP may sell to advertisers locally, regionally through conference deals, or nationally across conferences to maximize ad acquisitions. ISP approaches differentiation and branding by focusing on fostering long-term client relationships. They place representatives on-location at client colleges. Customer relations managers oversee a block of clients in certain areas. Above these CRMs is a national sales team. ISP also emphasizes a one-on-one, personal sales approach. CRMs are on the road around three days per week for face-to-face relationship building. Sutton personally meets with college leaders and decision-makers, while staffers hold frequent face-to-face meetings with lower level client representatives. According to Merrifield, “face-to-face creates an image and supports the brand.” (pg. 9)
The target customer is the collegiate sports market. It is a $4 billion-a-year-industry. Colleges have big budgets in the millions of dollars (or are expanding budgets due to growth). The two largest main competitors are Learfield Sports and IMG. Also included are Nelligan Sports Marketing and CBS Collegiate Sports Properties. Learfield is more of a cooperative partner in the market, working with ISP on joint deals here and there. The major threat is IMG. They have plenty of financial capital, a lot of history, big reach (not just in the U.S. but also around the world) and an eager desire to expand their collegiate holdings. Moreover, IMG integrates into a variety of other channel offerings for colleges and athletes, making their brand highly recognizable. In fact, IMG could try to buyout ISP. Failing this, they have plentiful resources and a broader product mix to outgun ISP in bidding wars if they choose. The only way ISP can really fend off IMG from taking clients is by continuing their pursuit of locking down clients in longer-term, exclusive contracts.
In addition to continuing to expand their client roster, they should also pursue ticket sales and intramural sports. Licensing may be a natural fit, but with IMG on the horizon holding 75% of the market, it may be a limited endeavor. Seat rentals may be another focus, but inventory turnover rate is significant, especially if low attendance is a factor due to a team’s season being good or bad. Concessions, while prevalent at every stadium, are also dependent on traffic volume. With low traffic and low margins, concessions may be a risky offer. Pursuing ticket sales and intramural sports allows ISP to further dig deeper into their current client list, enhancing their core principle of being an integrated part, face-to-face, with each client college.
Sutton and Merrifield relied on their vast array of social capital early on. This will play a continual role in future pursuits. They kept costs low by handling client relationships personally and bootstrapped income for growth. They must now bootstrap their client capital into new offerings. In pursuing the recommended strategy of expanding clients and including ticket sales/intramural sports offerings, they can use the Aspire/GT deal as feasibility research, imitating their processes for ISP’s own move into ticket sales. They have the advantage over Aspire of having a large client base to approach and scale immediately. The intramural sports opportunity represents an easy, natural expansion, given their on-site connections with current clients. This would simply involve rolling intramural sports into their existing rights contracts.