UH deal with IMG will net millions

The University of Hawaii stands to earn at least $27.7 million over the 10-year life of its new multimedia rights licensing agreement with IMG, according to the deal.

Terms of the contract, which runs until June 30, 2027, are contained in a 24-page letter of agreement signed by UH president David Lassner, athletic director David Matlin and IMG College president Tim Pernetti and obtained by the Star-Advertiser under a state open records request.

IMG College of Winston Salem, N.C., is a division of WME | IMG, a global marketing firm founded in the 1960s.

The deal marks a major shift by UH, which unlike most of its peers, had handled multimedia marketing in-house since 2003-04 after severing a two-year relationship with sports agent Leigh Steinberg.

IMG represents more than 75 colleges and conferences, including UCLA, Notre Dame and Alabama, according to a listing on its website.

As part of its in-house marketing, UH had built up a highly successful corporate partner program with more than 90 businesses, earning more than $2 million in cash annually plus as much as $3 million in trade.

The Star-Advertiser has been among the participants.

John McNamara, who headed the corporate partner program as an associate athletic director, left UH in November 2015.

But Matlin said, “While we have had a successful corporate partner program, the agreement with IMG will allow further improvements that the university would not have likely been able to achieve on its own. … The cash increase in the past 13 years has been approximately 1.9 percent, while this agreement will guarantee a 32 percent increase, plus additional upside potential, in a 10-year period.”

As part of the agreement, UH will receive a $1 million signing bonus with payments split over 2018 and ’19. Annual royalties begin at $2.2 million this year and escalate to $3 million in the contract’s final year.

Matlin said the overall $27.7 million “compares very favorably to the $21.0 million that the university would have been able to achieve on its own during the same period.”

UH can earn additional funds if specified revenue targets, which escalate from $4.4 million this year to $6 million in the final year, are exceeded. IMG is also expected to retain at least 50 percent of the non-cash trade UH receives.

IMG’s role will include UH publications, signage at UH facilities and areas open to UH at other facilities, and internet and digital opportunities. It may also have a role in future broadcast contracts.

Under the terms of the agreement, IMG will hire and pay at least three staff members to handle the UH account. UH will provide the office space. Matlin said it will “re-deploy” its current marketing staff to “new and high-value initiatives.”

As part of the agreement, IMG will be able to sell sponsorships touting businesses exclusively as the “official (fill in the blank) of UH.”

The department’s coaches will not be able to endorse competing entities.