Conference Realignment

[RonJohn]

It wouldn't be much less according to the article. It would bridge the media payouts gap considerably with the SEC and B1G. The idea is that the cash infusion would keep its members competitive which would lead to larger growth in the future. The article states a potential doubling of the media rights in 2031. If that were to happen due largely to the initial investment then it could be worth it. There is obvious risk with the private equity route but the alternative of doing nothing doesn't seem much better.

And according to TikTok videos, if I take out a 130% home equity loan on my house, pool it with people to arbitrage an Airbnb, I will just sit in my house and make so much passive income that I can't count it all.

Doesn't the article state that the athletic directors need more convincing to move the idea forward? Would the $800-1billion going to be used to work to maximize the exposure and build the conference to be work double the money in 2031? Or would the money be paid out to the conference members? Even if $1 billion over six years is paid out to the conference members, it wouldn't make them on par with the Big10 or SEC. Is the private equity company going to pay $800 million to $1 billion for 20-30% ownership of the conference and make zero dollars from conference revenue? What happens if the media money in 2031 is not double the current contract? This seems more like something that the private equity group would "leak" to try to push the idea forward more than it sounds like anything that actually has any merit.

 

[orientalnc]

And according to TikTok videos, if I take out a 130% home equity loan on my house, pool it with people to arbitrage an Airbnb, I will just sit in my house and make so much passive income that I can't count it all.

Doesn't the article state that the athletic directors need more convincing to move the idea forward? Would the $800-1billion going to be used to work to maximize the exposure and build the conference to be work double the money in 2031? Or would the money be paid out to the conference members? Even if $1 billion over six years is paid out to the conference members, it wouldn't make them on par with the Big10 or SEC. Is the private equity company going to pay $800 million to $1 billion for 20-30% ownership of the conference and make zero dollars from conference revenue? What happens if the media money in 2031 is not double the current contract? This seems more like something that the private equity group would "leak" to try to push the idea forward more than it sounds like anything that actually has any merit.

 

[RonJohn]

I guess you are just an older-out of touch person who has no idea what it takes to make money. (why should retiring early as a multi-millionaire count for anything? ) The current way of thinking is what benefits you today instead of what your choices today will do for you in 10 years from now. Don't worry about what happens in six years, your revenue is going to double for some unknown reason.

Extreme satire intended.

 

[WreckinGT]

And according to TikTok videos, if I take out a 130% home equity loan on my house, pool it with people to arbitrage an Airbnb, I will just sit in my house and make so much passive income that I can't count it all.

Doesn't the article state that the athletic directors need more convincing to move the idea forward? Would the $800-1billion going to be used to work to maximize the exposure and build the conference to be work double the money in 2031? Or would the money be paid out to the conference members? Even if $1 billion over six years is paid out to the conference members, it wouldn't make them on par with the Big10 or SEC. Is the private equity company going to pay $800 million to $1 billion for 20-30% ownership of the conference and make zero dollars from conference revenue? What happens if the media money in 2031 is not double the current contract? This seems more like something that the private equity group would "leak" to try to push the idea forward more than it sounds like anything that actually has any merit.

Well yeah. If it didn't take more convincing then the deal would be done and we obviously don't have all of the details yet. This is being reported by Dennis Dodd, The Athletic, Pete Thamel, and others. Like always if you believe like every other bit of news that this is also made up, that is up to you. Still seems like a pretty interesting development worth mentioning.

 

[RonJohn]

Well yeah. If it didn't take more convincing then the deal would be done and we obviously don't have all of the details yet. This is being reported by Dennis Dodd, The Athletic, Pete Thamel, and others. Like always if you believe like every other bit of news that this is also made up, that is up to you. Still seems like a pretty interesting development worth mentioning.

I'm not saying it is fake news. I'm saying that it is a dumb idea. It is probably being promoted as a news story by the private equity firm instead of anyone in the conference. The entire payment to the conference would be less than one year of Bug10 or SEC revenue every year. This would not put the BIG12 on par with either of those conferences, and would give a large stake of ownership to the private equity company. Unless there is some kind of plan that close to guarantees double the revenue, it doesn't make sense from a financial standpoint. The only thing it would do is make the current athletic directors look good. Then those directors would likely take their "win" to another management position before the consequences of the revenue infusion came due.

 

[WreckinGT]

I'm not saying it is fake news. I'm saying that it is a dumb idea. It is probably being promoted as a news story by the private equity firm instead of anyone in the conference. The entire payment to the conference would be less than one year of Bug10 or SEC revenue every year. This would not put the BIG12 on par with either of those conferences, and would give a large stake of ownership to the private equity company. Unless there is some kind of plan that close to guarantees double the revenue, it doesn't make sense from a financial standpoint. The only thing it would do is make the current athletic directors look good. Then those directors would likely take their "win" to another management position before the consequences of the revenue infusion came due.

As the article states, this has to be approved by the league presidents, not the athletic directors. It may be as financially disastrous as you say. I can't say I know enough to make that determination at this point, but if it was a obvious disaster like you suggest then I struggle to see why so many University Presidents are considering it or why CVC is pushing for it as it has a chance to be a financial disaster for them as well.

 

[ThatGuy]

I guess you are just an older-out of touch person who has no idea what it takes to make money. (why should retiring early as a multi-millionaire count for anything? ) The current way of thinking is what benefits you today instead of what your choices today will do for you in 10 years from now. Don't worry about what happens in six years, your revenue is going to double for some unknown reason.

Extreme satire intended.

In other words...

 

[Vespidae]

As the article states, this has to be approved by the league presidents, not the athletic directors. It may be as financially disastrous as you say. I can't say I know enough to make that determination at this point, but if it was a obvious disaster like you suggest then I struggle to see why so many University Presidents are considering it or why CVC is pushing for it as it has a chance to be a financial disaster for them as well.

The problem with PE in college sports, unlike professional sports, is one of liquidity. Ultimately, a PE firm will want to divest and that means there needs to be buyers. Will there be a secondary market in college sports? Stock issued? Will states even allow a state agency to issue stock? Many unanswered questions.

The other problem is revenue growth is going to come from media distribution, and there’s a duopoly of two … unless the entire league junks ESPN or Fox and pursues multiple channels (granted, this is what the NFL did), there is enormous risk in top line growth.

I can envision a rapid investment of cash with guaranteed exit valuations, a huge surge in new facilities, personnel, etc … a hasty exit by PE and universities now stuck with a massive asset base they can’t support.

It’s time to bring sanity to college athletics.

 

[stinger 1957]

Going fwd FB schools need to be in CFB first type conference and BB schools need to be in a BB first type.

 

[Techster]

https://www.actionnetwork.com/ncaaf/big-12-conference-allstate-discussions-naming-rights-deal?utm_source=Twitter&utm_medium=Social&utm_campaign=BrettMcMurphy

Big 12 considering private equity investment of up to $1 billion for as much as 20% of conference

The proposed deal with a Luxembourg-based firm would bring a massive influx of cash to the league

www.cbssports.com

The Big 12 looking to sell the naming rights to its conference. They are also working with Private Equity firms on potential revenue streams. They are being very aggressive in generating new revenue streams. Hopefully the ACC has something in the works as well.

Private Equity for college sports teams and conferences is a terrible idea. I'm saying it as someone that worked in that world in my 20's/30's.

Look up how PE firms raise capital and how they use leverage to basically saddle debt on their companies, extract all the upside, and let the companies fend for themselves. Interesting stat: Over 50% of companies involved with PE goes bankrupt.

Part of me wants the Big 12 to do it just to see how royally PE screws up college sports.

 

[MacDaddy2]

Private Equity for college sports teams and conferences is a terrible idea. I'm saying it as someone that worked in that world in my 20's/30's.

Look up how PE firms raise capital and how they use leverage to basically saddle debt on their companies, extract all the upside, and let the companies fend for themselves. Interesting stat: Over 50% of companies involved with PE goes bankrupt.

Part of me wants the Big 12 to do it just to see how royally PE screws up college sports.

I tend to agree with you but in this crazy world of college athletics we really need all the teams in the ecosystem. Here's a thought, instead of their entire conference burning to the ground how about if it was only one team? One that has had discussions with a PE firm, one that most wouldn't care if they burned to the ground, one that is suing the ACC.... would love to see FSU on fire like that!

 

[AugustaSwarm]

I tend to agree with you but in this crazy world of college athletics we really need all the teams in the ecosystem. Here's a thought, instead of their entire conference burning to the ground how about if it was only one team? One that has had discussions with a PE firm, one that most wouldn't care if they burned to the ground, one that is suing the ACC.... would love to see FSU on fire like that!

I despise FSU as much as the next guy, but I also see the value that they bring to GT and the ACC as a whole. I don't want to see them crash and burn.

The PE discussion is laughable to me. There's no way this actually happens - there's way too much money wrapped up in it for any school to be willing to risk it. Using FSU as an example, you see how little loyalty they have to the ACC - even though their tenure in the ACC has been pretty rocky. You really want a team that's already volatile to now be bankrolled by some PE firm that's willing to do anything to make a buck?

 

[LT 1967]

I know very little about this subject. However, when I see that the PE firm would own 20 to 30 percent of the Conference, I assume by extension, it would own 20%-30% of each Athletic Association in the Conference? I believe something like that would have to be approved by the Board of Regents and likely by the Legislature in the case of a Public University like GT.

Am I wrong?

 

[AugustaSwarm]

I know very little about this subject. However, when I see that the PE firm would own 20 to 30 percent of the Conference, I assume by extension, it would own 20%-30% of each Athletic Association in the Conference? I believe something like that would have to be approved by the Board of Regents and likely by the Legislature in the case of a Public University like GT.

Am I wrong?

As it stands now, the ACC members (for example) entered into a Grant of Rights agreement - that only applies to the media rights of each member of the ACC. The rights are held by the ACC itself, who then disperses the funds to each member. As it stands now, the GoR is a strict two way street between each school's AA and the ACC as a whole. A member leaving has to buy their way out. Any changes must be voted on and approved.

So...the ACC is not likely to entertain the addition of a third party - in this case, a PE firm. What value would a PE firm bring, other than a very short term infusion of cash?

People will and have argued that if a conference knows it's going under, the conference may make a desperate move and allow PE - I just don't see that happening. The conferences are likely to look to protect the long term interests of the conference as a whole - plus the members would all have to approve of the move anyways, which would bring light to the scheme in the first place! So the likelihood of this ever happening is pretty slim.

 

[Northeast Stinger]

Why do I keep seeing weird internet rumors about the B1G and SEC engaged in backroom deals? It’s public record that they have had a joint working committee for a while but the rumors are pretty out there.

So, they are supposedly carving up some conferences and redistributing the pieces so that “everybody is happy.”

The SEC gets Duke and FSU.

The B1G gets Clemson, UNC and a team to be named later.

The ACC gets Utah, WVU, and UCF.

What’s the latest rumors you guys are hearing? By the way, I’ll believe whatever happens when it happens but the rumors are getting fun again, including that FSU may get a settlement sooner rather than later with the ACC.

I really thought everybody would stand pat until contracts expire, and I still lean that way, but somebody’s churning up a lot of backroom talk right now.

 

[AugustaSwarm]

It's all bored media turds creating stuff to generate clicks.

 

[Northeast Stinger]

It's all bored media turds creating stuff to generate clicks.

More than likely. But it’s interesting that people who aught to know better are keeping these things alive, like a certain AD, a particular ESPN talking head, and the media person for one of the conferences.

If we didn’t have rumors we would literally have NOTHING to talk about on this thread.
Which might be a reason to kill this thread and start a new one when something ACTUALLY happens.

 

[stinger78]

More than likely. But it’s interesting that people who aught to know better are keeping these things alive, like a certain AD, a particular ESPN talking head, and the media person for one of the conferences.

If we didn’t have rumors we would literally have NOTHING to talk about on this thread.
Which might be a reason to kill this thread and start a new one when something ACTUALLY happens.

Preach, bro! If not for rumor where would this thread be?

 

[slugboy]

It's all bored media turds creating stuff to generate clicks.

Right now, if the article isn’t on baseball or soccer or Olympic trials, it’s 99% likely to be clickbait.

I’m going to distract myself with outside hobbies until August.

 

[MacDaddy2]

Preach, bro! If not for rumor where would this thread be?

Ounce of caution here, I am sure that Washington St. and Oregon St. were thinking similar thoughts, until it was too late.