The Private Equity College Sports Hellscape Thread

[Waquoit]

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Nah, Bob sold at the top of the market. Bain doesn't acquire companies to grow them, they buy companies to harvest them. A high-ranking Bain official was caught saying so on a leaked videotape. And BTW, I don't recall UConn seeing any Bob money since the sale. That's the only reason I would care about that clip joint.

 

[JohnFSilver]

Nah, Bob sold at the top of the market. Bain doesn't acquire companies to grow them, they buy companies to harvest them. A high-ranking Baim official was caught saying so on a leaked videotape. And BTW, I don't recall UConn seeing any Bob money since the sale. That's the only reason I would care about that clip joint.

I don't think people get what Bain and these funds do to businesses.

Their goal is to maximize cash flow. It isn't to grow business, in fact, their expertise is in businesses in secular decline. How do you squeeze as much money out if them and run them lean enough to generate positive cash flow.

They don't take that cash flow to reinvest in growth or product initiatives, they return cash to shareholders through dividends or buybacks if the company is public.

Eventually, the businesses collapse because of lack of investment, and Bain liquidates the property. They take a loss on the purchase price and then sell the damn real estate and holdings.

Think of these hedge funds as hospice care. They are here to extract value until there is nothing left.

Hartford Courant a great example. That hedge fund is monetizing 200 years of brand equity To generate revenue. They aren't tying to sell
News, dominate the market, or increase readership and advertising reach exponentially.

They are trying to extract cash from the business. Content doesn't matter, they are running as lean as possible (don't even have an office space).

If it was a new newspaper, no one would buy it. But it has brand equity (like sports illustrated as another media example) and people default to buying and trusting the brand. Eventually, quality will doom it. But until then the hedge fund is collecting cash.

 

[gioff2323]

This is such a terrible discussion amongst folks who seemingly know nothing about PE, other than their friend’s friend got let go by a mean PE firm. Can we get back to the thread - key tweets about realignment

 

[JohnFSilver]

This is such a terrible discussion amongst folks who seemingly know nothing about PE, other than their friend’s friend got let go by a mean PE firm. Can we get back to the thread - key tweets about realignment

Lol. Why do PE bros get so butt hurt when people criticize their vulture capital tendencies. Embrace who you are. You guys aren't the heroes. And that is OK.

 

[Kolumbo]

Nah, Bob sold at the top of the market. Bain doesn't acquire companies to grow them, they buy companies to harvest them. A high-ranking Bain official was caught saying so on a leaked videotape. And BTW, I don't recall UConn seeing any Bob money since the sale. That's the only reason I would care about that clip joint.

Bain must really suck at harvesting because it has owned Bob's for over 10 years. Bob's has also continued to expand. Damn those leeches!!

 

[gioff2323]

Lol. Why do PE bros get so butt hurt when people criticize their vulture capital tendencies. Embrace who you are. You guys aren't the heroes. And that is OK.

John

We all expect more from you. You seem to have an ax to grind over PE firms. You seem to think that’s a monolithic term. You seem to think PE doesn’t raise capital, it just magically appears. You seem to think PE firms are in to strip assets and sell them, which captures about 1% of the PE firms.

All that aside, my point was not that PE firms are good or bad, which is a nonsensical binary equation, but to move the discussion back to the thread topic. Some of us actually click on that thread looking for relevant news. Some of u hijacked it to share your philosophical views around PE.

I’m not a PE bro, but thanks for trying to attack the author and not the content. In the end, the mods did the right thing.

Let’s get back to topics that matter to UConn sports.

 

[Patman]

Nah, Bob sold at the top of the market. Bain doesn't acquire companies to grow them, they buy companies to harvest them. A high-ranking Bain official was caught saying so on a leaked videotape. And BTW, I don't recall UConn seeing any Bob money since the sale. That's the only reason I would care about that clip joint.

Yeah bobs will down slide as the authenticity from bobs brand goes away. Most personal businesses are like that. And I grew up in the Massachusetts furniture wars.

 

[JohnFSilver]

John

We all expect more from you. You seem to have an ax to grind over PE firms. You seem to think that’s a monolithic term. You seem to think PE doesn’t raise capital, it just magically appears. You seem to think PE firms are in to strip assets and sell them, which captures about 1% of the PE firms.

All that aside, my point was not that PE firms are good or bad, which is a nonsensical binary equation, but to move the discussion back to the thread topic. Some of us actually click on that thread looking for relevant news. Some of u hijacked it to share your philosophical views around PE.

I’m not a PE bro, but thanks for trying to attack the author and not the content. In the end, the mods did the right thing.

Let’s get back to topics that matter to UConn sports.

I am just being sarcastic. I worked in investor relations after I left sports. I found PE people some of the most overrated people I have ever met.

Axe to grind a bit much, but I hate the narrative and god like status these guys have. They are important, they provide capital.

Anyhow, on college sports, i would
Prefer money gets talent out of it. They waste so much money.

 

[giddyup]

I do a lot financing deals with private equity. It would be insanely stupid. The reason you take that kind of money is to grow faster to create more value, never to survive. I see so many businesses that make decent profit take equity with unicorn stars in their eyes only to end up on the trash heap. The Big12 has plenty of revenue to work with and college sports is a zero sum game with a fully matured market, except around the edges.

 

[CL82]

The reason you take that kind of money is to grow faster to create more value, never to survive.

 

[Samoo]

I'm the farthest thing from an expert on PE, but it sounds to me like it's pretty agnostic. If a PE firm can get better returns for its investors expanding a company, it will do that; if it can get better returns for its investors destroying a company, it will do that. And then there are all the in-between outcomes on that broad spectrum.

 

[KryHavok]

Flugar said in his show yesterday (based on what Ross Dellenger posted) that on Tuesday some of the Big12 and ACC presidents met in Dallas to discuss private equity. Flugar said there were at least 4 ACC teams that were represented: Virginia Tech, Syracuse, North Carolina, and Louisville. He goes on to mention the rumor that the ACC may dissolve to reform with 10 teams that have private equity, that the Big12 is thinking about private equity, and that UConn was a part of these talks (in terms of private equity, this is older news that we're already aware of). Blah blah blah, no decisions have been made and conversations will continue. There are more schools that are interested in privated equity (at a conference level), but Flugar said he'll say which ones later when he gets the OK so as to not burn bridges.

 

[KryHavok]

Flugar said yesterday that apparently West Virginia is ready to go all-in on private equity. After losing to Memphis yesterday, I can see why they think they need the cash.

 

[FfldCntyFan]

If WVU goes the PE route the school will be in significant trouble. Private equity is basically the legitimate half brother of loan sharking.

 

[CL82]

Flugar said yesterday that apparently West Virginia is ready to go all-in on private equity. After losing to Memphis yesterday, I can see why they think they need the cash.

What happened to his prediction that big 12 Connecticut talks would be announced before the end of the year? I mean, I guess the year is over yet.

 

[CTFAN4LIFE]

What happened to his prediction that big 12 Connecticut talks would be announced before the end of the year? I mean, I guess the year is over yet.

He has said the timeline is early 2025.

 

[Ha Who]

Big discussion on CNBC this morning. This was also mentioned during the talk.

https://www.cnbc.com/2024/12/19/college-sports-programs-valuations.html

 

[CTFAN4LIFE]

Big discussion on CNBC this morning. This was also mentioned during the talk.

https://www.cnbc.com/2024/12/19/college-sports-programs-valuations.html

Did the discussion bring any interesting points to the table?

Imagine if we had P4 tv revenue - you'd have to think we'd jump up 30 spots or so.

 

[Ha Who]

Did the discussion bring any interesting points to the table?

Imagine if we had P4 tv revenue - you'd have to think we'd jump up 30 spots or so.

Big discussion on private equity and basically how this is destroying college athletics. The schools have justified everything they are doing as making money which is used for the academic side. I’d like to find a link of the interview, but basically the hosts were attacking the proposal for 51% ownership of a college team by a private equity firm as they would no longer be looking at things from nonprofit/academic side. However, if they dropped to a 49% percentage with the schools in control, they did seem more amenable to it. Basically it was a depressing discussion about the ownership of college teams. The bright side is if we’re in this top-tier, a good private equity firm would not care about the so-called baggage we carry. Of course, Charlie Brown is always lurking with Lucy.

 

[Ha Who]

 

[KryHavok]

Wow, that surprised me that we're at 71 and only marginally better than Boise State. That BCU is valued 2.5-higher than us is equally appalling.

 

[CTFAN4LIFE]

Our AD is really the perfect candidate for PE because we need revenue and because we are not in a power conference with power conference tv revenue, we have more upside on a percentage basis than almost any other AD in terms of unlocking potential value. I think this is what would get us into the Big12 or ACC.

 

[Rufus]

Here it is in print:

https://www.cnbc.com/2024/12/19/college-sports-programs-valuations.html

College Athletics Valuations 2024​

Rank	Program	Valuation	Revenue	Conference	City	Public/Private
1.	Ohio State University	$1.318B	$280M	Big Ten	Columbus, OH	public
2.	University of Texas at Austin	$1.281B	$271M	SEC	Austin, TX	public
3.	Texas A&M University	$1.264B	$279M	SEC	College Station, TX	public
4.	University of Michigan	$1.062B	$230M	Big Ten	Ann Arbor, MI	public
5.	University of Alabama	$978M	$200M	SEC	Tuscaloosa, AL	public
6.	University of Notre Dame	$969M	$224M	ACC	Notre Dame, IN	private
7.	University of Georgia	$950M	$210M	SEC	Athens, GA	public
8.	University of Nebraska	$943M	$205M	Big Ten	Lincoln, NE	public
9.	University of Tennessee	$940M	$202M	SEC	Knoxville, TN	public
10.	University of Oklahoma	$928M	$199M	SEC	Norman, OK	public
11.	Penn State University	$924M	$202M	Big Ten	University Park, PA	public
12.	University of Southern California	$923M	$212M	Big Ten	Los Angeles, CA	private
13.	Louisiana State University	$916M	$200M	SEC	Baton Rouge, LA	public
14.	University of Florida	$865M	$189M	SEC	Gainesville, FL	public
15.	University of Wisconsin	$838M	$198M	Big Ten	Madison, WI	public
16.	Clemson University	$800M	$196M	ACC	Clemson, SC	public
17.	University of Oregon	$780M	$151M	Big Ten	Eugene, OR	public
18.	University of Arkansas	$776M	$167M	SEC	Fayetteville, AR	public
19.	University of Kentucky	$775M	$174M	SEC	Lexington, KY	public
20.	Auburn University	$772M	$195M	SEC	Auburn, AL	public
21.	University of Iowa	$747M	$167M	Big Ten	Iowa City, IA	public
22.	Michigan State University	$740M	$171M	Big Ten	East Lansing, MI	public
23.	Stanford University	$687M	$180M	ACC	Stanford, CA	private
24.	Florida State University	$673M	$170M	ACC	Tallahassee, FL	public
25.	University of Illinois	$665M	$148M	Big Ten	Champaign, IL	public
26.	Duke University	$659M	$153M	ACC	Durham, NC	private
27.	University of Washington	$658M	$152M	Big Ten	Seattle, WA	public
28.	Indiana University	$653M	$145M	Big Ten	Indianapolis, IN	public
29.	University of Mississippi	$651M	$142M	SEC	Oxford, MS	public
30.	University of South Carolina	$650M	$160M	SEC	Columbia, SC	public
31.	University of Miami	$639M	$160M	ACC	Coral Gables, FL	private
32.	University of Minnesota	$637M	$149M	Big Ten	Minneapolis, MN	public
33.	Texas Tech University	$619M	$147M	Big 12	Lubbock, TX	public
34.	University of Louisville	$595M	$143M	ACC	Louisville, KY	public
35.	University of Missouri	$590M	$142M	SEC	Columbia, MO	public
36.	Purdue University	$567M	$124M	Big Ten	West Lafayette, IN	public
37.	University of Kansas	$553M	$128M	Big 12	Lawrence, KS	public
38.	Vanderbilt University	$551M	$125M	SEC	Nashville, TN	private
39.	Texas Christian University	$542M	$149M	Big 12	Fort Worth, TX	private
40.	UNC-Chapel Hill	$539M	$139M	ACC	Chapel Hill, NC	public
41.	University of Arizona	$532M	$143M	Big 12	Tucson, AZ	public
42.	University of Pittsburgh	$524M	$137M	ACC	Pittsburgh, PA	public
43.	Mississippi State University	$523M	$116M	SEC	Starkville, MS	public
44.	Baylor University	$513M	$137M	Big 12	Waco, TX	private
45.	University of Virginia	$506M	$141M	ACC	Charlottesville, VA	public
46.	Oklahoma State University	$500M	$122M	Big 12	Stillwater, OK	public
47.	Georgia Tech	$498M	$134M	ACC	Atlanta, GA	public
48.	Iowa State University	$492M	$116M	Big 12	Ames, IA	public
49.	Syracuse University	$487M	$114M	ACC	Syracuse, NY	private
50.	Northwestern University	$486M	$118M	Big Ten	Evanston, IL	private
51.	North Carolina State University	$481M	$121M	ACC	Raleigh, NC	public
52.	University of Maryland	$477M	$121M	Big Ten	College Park, MD	public
53.	Virginia Tech	$474M	$130M	ACC	Blacksburg, VA	public
54.	University of California, Los Angeles	$472M	$105M	Big Ten	Los Angeles, CA	public
55.	University of Colorado	$470M	$127M	Big 12	Boulder, CO	public
56.	University of Utah	$468M	$126M	Big 12	Salt Lake City, UT	public
57.	Kansas State University	$444M	$102M	Big 12	Manhattan, KS	public
58.	Boston College	$443M	$118M	ACC	Chestnut Hill, MA	private
59.	Rutgers University	$417M	$125M	Big Ten	New Brunswick, NJ	public
60.	West Virginia University	$403M	$106M	Big 12	Morgantown, WV	public
61.	Washington State University	$392M	$79M	Pac-12	Pullman, WA	public
62.	University of California, Berkeley	$386M	$126M	ACC	Berkeley, CA	public
63.	Wake Forest University	$362M	$97M	ACC	Winston-Salem, NC	private
64.	Brigham Young University	$357M	$106M	Big 12	Provo, UT	public
65.	Southern Methodist University	$327M	$86M	ACC	Dallas, TX	private
66.	Oregon State University	$326M	$92M	Pac-12	Corvallis, OR	public
67.	San Diego State University	$287M	$104M	MWC	San Diego, CA	public
68.	Arizona State University	$279M	$115M	Big 12	Tempe, AZ	public
69.	University of Cincinnati	$216M	$87M	Big 12	Cincinnati, OH	public
70.	University of Central Florida	$181M	$85M	Big 12	Orlando, FL	public
71.	University of Connecticut	$178M	$93M	Big East	Storrs, CT	public
72.	Boise State University	$176M	$61M	MWC	Boise, ID	public
73.	East Carolina University	$153M	$63M	AAC	Greenville, NC	public
74.	University of South Florida	$150M	$71M	AAC	Tampa, FL	public
75.	University of Memphis	$148M	$64M	AAC	Memphis, TN	public

Correction: This story has been updated to correct the valuation for North Carolina State University, which is worth $481 million. It also corrects the rankings of 16 other schools on CNBC’s list.

 

[Rufus]

For teams that changed leagues, it will be interesting to see how their valuations change in the next few years. I'm not sure if this year's moves are even factored into these numbers, as revenue from this year's moves won't show up until June 30, 2025.

Will Texas in the SEC be enough to overtake Ohio State for the #1 spot?

Will Oklahoma rise from its current #10 valuation as a member of the SEC?

And then the B1G additions ---- how high will USC (#12) and UCLA (#54) rise as full-share members of the B1G?

Oregon (#17) and Washington (#27) are only half-share members of the B1G until 2030, so those programs will keep rising until they reach full-share status for conference revenue.

Maryland (#52) and Rutgers (#59) are still paying back their B1G loans, so their values will keep rising until those loans are paid back in full. Not sure how many more years that will be, but it shouldn't be many more.

When the Big 12 added Cincinnati (#69), Houston (NR), UCF (#70) and BYU (#64), they were not initially full-share members. I think that might have been amended when the 4 corner schools were added, but that wouldn't be reflected in these numbers, so I'm assuming their valuations will rise once that is factored into the financials above.

Washington State (#61) and Oregon State (#66) are likely going to drop further down the list going forward.

How is San Diego State (#67) worth more than UConn (#71)?!?!?!?!?

 

[Kolumbo]

Our AD is really the perfect candidate for PE because we need revenue and because we are not in a power conference with power conference tv revenue, we have more upside on a percentage basis than almost any other AD in terms of unlocking potential value. I think this is what would get us into the Big12 or ACC.

The problem with the SEC programs is the SEC does not sponsor men's soccer. I think Texas will take over #1 soon.

It seems the valuations range from 2x to 4x annual revenues. UConn is just under 2x. Miss State is 4.5x, all because of football? UConn really takes a hit based on my last quoted paragraph. vvv So yes, it there is a great deal of upside for UConn if it joined a conference

"Ohio State University is the most valuable athletic program, worth an estimated $1.32 billion. The Buckeyes had $280 million in revenue in 2023, the most of any school. Other factors that helped propel the Buckeyes to the top of the rankings are an alumni base of over 600,000, a fan base of more than 11 million, boosters that donated nearly $60 million last year, and a football team that routinely has attendance of over 100,000 at its games."

"In aggregate, the SEC is worth $13.3 billion, an average of $832 million per school; followed by the Big Ten at $13.2 billion, an average of $734 million per school; the ACC at $9.6 billion, or $562 million per school; and the Big 12, at $6.7 billion, or $420 million per school."

"The list is reflective of the current enterprise value of each program, starting with a base revenue multiple of four for all institutions, and then adjusting the multiple for variables, including conference affiliation, estimated NIL spend, school subsidies, number of alumni and other factors that can catalyze future revenue growth and profitability. "