On the heels of Learfield’s recapitalization announcement last week, Sports Business Journal’s Michael Smith and Brett McCormick took an in-depth look at the Company’s playbook for growth, from its founding and evolution into a leader in today’s college sports landscape to the arduous task of tackling $1.1 billion in debt and what a “seminal moment” the recapitalization is for the future of Learfield and its continued powering of college athletics.
From SBJ: “The new stabilizing arrangement with more than 160 college properties will provide the company with equity investment and a new set of majority owners: Clearlake Capital Group, Charlesbank Capital Partners and funds managed by Fortress Investment Group.”
“In addition to the reduced debt, the $150 million in new equity investment will be used to strengthen the company’s financial position for growth through innovation, acquisitions and new business.”
“Reducing the debt by $600 million completely changes Learfield’s outlook, said an analyst who specializes in debt restructuring and worked with the company on the transaction.”
The article features interviews with Learfield President and CEO Cole Gahagan, CEO of C Street Advisory Group (Advisor retained by Learfield) Jon Henes, and prominent Athletic Directors Mike Alford (Florida State), Joe Castiglione (Oklahoma) and Travis Goff (Kansas).
Full article can be found here.
Quotes of note:
From Learfield President and CEO Cole Gahagan:
“What we’ve done throughout this process is continue to win, in terms of the schools we’ve renewed, in terms of our partnerships, in terms of our innovation, and in terms of doing more around NIL than any other company. So, the story is that, despite these extraordinary headwinds and despite restructuring a billion dollars of debt on a balance sheet, this company has continued to win and innovate.”
From C Street Advisory Group CEO Jon Henes:
*C Street is a financial advisory firm retained by LEAFIRELD
“I’m not saying this lightly — and I know Learfield has retained us — but this [debt restructuring on this level] doesn’t happen. As I said, I spent 25 years as a bankruptcy lawyer. Probably did, I don’t know, 20 pre-packaged bankruptcies. … My partners at Kirkland & Ellis, who represented Learfield here, never went out with a consent offer without a staple pre-pack because it would be like, ‘Well, we have no stick. What are we telling them?’ The fact that Cole pushed that, and it got done, it’s remarkable.”
From Florida State Athletic Director Mike Alford:
“We wanted to be a good partner to them and understand their financial situation. I think they would understand if I came to them with a financial situation, they would work with me on it. So [we] worked it out in the best interest of both parties.
“Cole and I have always had a very professional relationship and understanding this business the way I understand it when it comes to MMR rights — my NFL experience and other places — I understand it. I understand the structuring of these agreements and understand what they look like long term and how do we structure what’s best for Learfield and for Florida State in continuing the partnership.
From Kansas Athletic Director Travis Goff:
“I think it’s a credit and testament to Cole and his leadership to create this pathway. This new $150 million equity investment … we see that as providing us new opportunities in the partnership. Learfield and Kansas can invest, reinvest, newly invest in some new opportunities.”