May 17-18, 2001

ITEM 111-1001-R0501   Electronic Scoreboard for Washington-Grizzly Stadium; The University of Montana-Missoula

THAT:   The Board of Regents of Higher Education authorizes The University of Montana-Missoula to enter into a use agreement for the purpose of construction, operation, and maintenance of a new electronic scoreboard at no cost to the University. In return, the University will provide exclusive rights to sell all advertising on the scoreboard and fixed locations inside the Stadium. The agreement will run 15 years. The scoreboard value and installation costs total $2.1-2.5 million.

 

EXPLANATION: In return for the agreement, Virtu Consulting will guarantee payment to the University of $570,000 annually, equal to all revenues presently contracted from existing Stadium scoreboard advertising agreements. The University retains authority to approve all advertisements. In addition to guaranteeing and paying the University all revenues from current scoreboard advertising contracts, Virtu will pay the University half of all advertising revenues subject to the proposed agreement, less 1) 20 percent of Virtus commission; 2) 5-8 percent of Virtu's debt service payments to finance the scoreboard; and 3) 7-10 percent of Virtu's debt service payments to pay scoreboard maintenance costs. Virtu will employ University students to operate the scoreboards and develop electronic advertising content for stadium events.

Virtu maintains similar scoreboard arrangements at the University of Arizona, Florida State University, Ohio State University, and other campus stadiums around the U.S. The scoreboard's estimated completion date of September 2001 depends on 1) Virtu's loan costs not exceeding $2.5 million; and 2) Virtu's receiving advance advertising revenue commitments equaling Virtu's overall costs including the guaranteed advertising revenue payment to the University.

The University will not expend University funds on this project, except to the limited extent required for University personnel to assist Virtu in marketing scoreboard and stadium advertising.

 

ATTACHMENT:       Use Agreement