After teasing the next big move in the name, image and likeness arms race in college sports for six months now, Learfield announced a tech escalation earlier this month: a consolidation. The multimedia rights company said it plans to expand Compass, its in-house NIL platform that had previously been used for its “extensive NIL merchandise licensing program,” to also handle all of Learfield's local campus activity.
Though not mentioned in Learfield's announcement, athlete NIL marketplace platform Opendorse was already scheduled to serve that purpose through next summer, and the fluid nature of the college sports market means the two companies, which have had an awkward but friendly partnership up until now, will likely become more direct competitors.
Compass' latest announcement is a significant scale-back of a three-year “strategic relationship” announced in April 2022, in which Learfield agreed to provide a number of school partners with free access to OpenDorse's platform and “turnkey solutions.”
For Learfield, the partnership was designed to further its “Allied” initiative, which launched in 2021, and promote branding agreements incorporating athletes' national and school marks, while Opendorse would receive a commission on various new transactions that took place on its platform. It seemed like an easy win-win for the two college sports-focused companies, which, at least at the time, weren't direct competitors.
But the lock apparently didn't turn, leading to a strategic recalibration of the relationship between the two companies, conflicting assessments of how big a role technology will play in making the NIL deal work, and doubts over the future of Learfield's partnership with Opendorse, which is currently scheduled to run until June next year.
Over the past two years, Opendaws has spent what CEO Blake Lawrence called “a tremendous amount of time” training Learfield's national and local sports real estate sales staff on how to utilize its platform. About 55 of Learfield's 160 schools already had individual software contracts with Opendaws.
Things haven't gone as smoothly for the other 100 or so athletic departments, Lawrence said, but the real challenge, Lawrence said, wasn't implementing the technology but teaching Learfield employees on campus how to incorporate athlete NIL into their sales efforts.
“The challenge isn't the logistics of reaching out to athletes and signing them. That's not the problem to solve,” Lawrence said. “Instead, the challenge is, how do we train the largest sales team in college sports” — Learfield's — “to sell NIL to local and regional sponsors?”
Despite being the head of a technology company, Lawrence says this experience with Learfield, and other collaborations over the 12 years OpenDose has run, have made him increasingly opposed the claim that technology is a panacea.
“While a platform to facilitate last-mile logistics is absolutely necessary, the biggest challenge and biggest oversight for most marketplace startups is the skill set and ability to actually sell the athlete value proposition and capture the attention of advertisers,” Lawrence said. “Software does not replace the sales component of NIL.”
Meanwhile, Learfield is one company currently emphasizing the importance of last-mile software-based logistics.
Learfield said it has signed 177 multimedia rights deals for schools incorporating “significant NIL assets” for fiscal year 2023. The company has already signed more than 500 deals for fiscal year 24, according to Solly Fulp, executive vice president overseeing the company's NIL business.
“It was really important to us to control the transaction process from start to finish,” Fulp said. “We had to control our own destiny in terms of making sure we had our own customized platform.”
Fulp claims that by using Compass rather than Opendorse, Learfield can increase “transactional efficiencies” and enhance data insights across the company's “12,000 unique brand relationships.”
Fulp said the company's decision to keep its operations in-house “is not to disrespect any platform,” and that includes OpenDose, which will continue to work with Learfield on its national NIL campaign, along with other companies like Dunkin' Donuts and Zipper Car Wash. But despite Fulp's insistence that the relationship between the two companies is good, it's clear that the companies' future plans and current messaging don't always line up.
Lawrence expressed optimism that OpenDose and Learfield will continue to work together at the national level “for many years to come,” but Fulp declined to say for sure.
“We don't know,” Fulp said, “The NIL situation is evolving rapidly, but we're keeping all options open as to what the future holds. We're not closing any doors right now. We're not kidding.”
Fulp acknowledged that Learfield's sales staff had to adjust to incorporate athlete NIL into their pitch.
“Until three years ago, our entire sales and service organization was barred from doing that,” he said. “Now we have a new value proposition we can offer our brand partners and we have to respond immediately. … We've all built (NIL) into our job descriptions.”
Meanwhile, when it comes to Opendose, Lawrence downplayed the missed opportunity presented by Learfield, saying local sponsorship deals only represent a “low double digit number” of the total NIL money passing through the company's platform.
“In any emerging market, a lot of energy is focused on not creating the value people expect,” he said, “but you can't predict the future because it's constantly changing.”
One thing Lawrence predicts with confidence is that NIL activity will only grow over time because the market demand is there.
“We're three years into NIL,” he said, “and the next three years will see us all working harder to increase NIL sales because we need to recoup some of the money that schools are investing in the NIL service. … Any success we see over the next three years through Opendorse, Compass and other marketplaces will have less to do with the platform itself and more to do with the focus on athlete compensation from athletic directors and presidents who want to create a competitive advantage.”
