Learfield’s pre-tax losses topped $2.1 billion in the four years between 2019 and 2022, after the college sports giant recorded more than $300 million in losses this past year, according to Endeavor’s most recent annual earnings report.
Endeavor, a publicly traded business, owns 42% of Learfield, while private equity firms Silver Lake and Atairos hold the remainder. As a public company, Endeavor (NYSE: EDR) is required to account for equity stakes it owns in businesses it doesn’t control in its financial filings, giving a rare glimpse into Learfield’s books.
In 2022, Learfield, college sports’ biggest dealmaker, had pre-tax losses of $312.5 million, according to Endeavor’s end-of-year report. The figure compounds a string of financially difficult years for Learfield, during which the business faced a pre-tax loss of $136.2 million in 2021 on revenue of $1.09 billion; $991.6 million in 2020 on $760.5 million in revenue; and $704.6 million in 2019 on revenue of $1.3 billion.
Endeavor did not disclose Learfield’s 2022 revenue in its filing, but the sports, media and entertainment giant did write off another $56.1 million in 2022 in annual goodwill “primarily due to continued losses,” essentially determining that the value of Learfield’s business has gone down since its acquisition of the company.
When Learfield and IMG College merged in 2018 to take the company’s current form, Endeavor sold 13% to Silver Lake at a valuation of $1.92 billion. By June 2021, when Endeavor raised its ownership in Learfield to 42% for $107.4 million, the valuation had dropped to $1.79 billion.
Neither Learfield nor Endeavor immediately responded to requests for comment.
As the primary conduit between athletic departments and their corporate partners and media companies, Learfield works with more than 1,000 schools across the country in varying capacities and manages multimedia rights for nearly 200 of them, including about 75% of the Power Five. Learfield continues to grapple with many of the same challenges to its business model that it has faced since before the COVID-19 pandemic, which put increasing strain on the company’s business model.
Learfield typically offers colleges a guaranteed revenue payment in exchange for the ability to sell various sponsorship and multimedia rights. The pandemic dramatically decreased the value of those deals, forcing Learfield to negotiate impairments and restructure many of its agreements with its partner schools throughout 2020 and 2021 as it pivoted away from the fixed-fee structure and toward a revenue-share model for the longer term.
College sports have since returned to normal operations, with full seasons held the last two calendar years and minimal attendance limitations or capacity restrictions, but Learfield’s business does not appear to have fully recovered.
-With assistance from Brendan Coffey
