The Private Equity College Sports Hellscape Thread | Page 16 | The Boneyard
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The Private Equity College Sports Hellscape Thread

How Sway?! said:
All RedBird is doing is a providing a line of credit to all the schools, they are not really investing and so they don't have any decision power. The closest thing to decision making power they are going to get is that they will be the preferred partner for business moving forward.
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That's why I used the word "advising."
 
Hoophound said:
I’m very torn too but honestly, I think the ACC is a total drag. I don’t watch any ACC sports except for the occasional Duke (I like their improvement) or FSU (family fans) football game.

Their basketball is dreadful most of the time outside of Duke. I’d love to see the ACC and Big East merge and trim some serious fat on both sides in the process. Short of that, I think I prefer the B12.
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Also there's the sword of damocles hanging over the ACC that is their GoR expiration and I do NOT want to be stuck in another OBE situation.
 
UConn Basketball has already played in packed arenas including Allen Fieldhouse, MSG, PBA, TD Garden. These games blow away many of the other programs in P4 conferences. Meanwhile all college football talk is about the coaching carousel, the portal, opt outs, and scandal. Adding UConn to either of the 2nd tier P4 conferences is a no brainer and I would think the private equity folks know they can squeeze a lot more money out of hoops. Why are Arizona and Kansas playing UCF when they could be playing UConn every year.
 
How Sway?! said:
All RedBird is doing is a providing a line of credit to all the schools, they are not really investing and so they don't have any decision power. The closest thing to decision making power they are going to get is that they will be the preferred partner for business moving forward.
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They aren't just providing a line of credit. According to the statement released by the Big 12,

"Redbird will work with the Conference to identify complementary investment opportunities inside and outside of the collegiate athletics ecosystem that will create revenue streams and long-term asset appreciation".

So let them identify UConn as a good investment.
 
jostar1 said:
They aren't just providing a line of credit. According to the statement released by the Big 12,

"Redbird will work with the Conference to identify complementary investment opportunities inside and outside of the collegiate athletics ecosystem that will create revenue streams and long-term asset appreciation".

So let them identify UConn as a good investment.
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Hate to break it to you but RedBird is literally talking about investment, i.e. investing into businesses, not about adding schools.
 
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How Sway?! said:
Hate to break it to you but RedBird is literally talking about investment, i.e. investing into businesses, not about adding schools.
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I don’t believe it’s that simple. They were investigating a deal with Verizon Wireless for the B12. They wanted UConn for the NY presence. The business opportunities are a variety of things including marketing deals with companies that want exposure to B12 audiences. The Northeast brings value. That is good for UConn. It won’t help Colorado St.
 
Kolumbo said:
UConn Basketball has already played in packed arenas including Allen Fieldhouse, MSG, PBA, TD Garden. These games blow away many of the other programs in P4 conferences. Meanwhile all college football talk is about the coaching carousel, the portal, opt outs, and scandal. Adding UConn to either of the 2nd tier P4 conferences is a no brainer and I would think the private equity folks know they can squeeze a lot more money out of hoops. Why are Arizona and Kansas playing UCF when they could be playing UConn every year.
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You need some non buy game scrub on your schedule so you don’t go 15-15.

But yeah, the idea that crap like Cincy, UCF and Rutgers just to name a few is farcical.
 
WrenchFan69 said:


It has begun
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A straight up equity investment looks so stupid for Otro that I can't begin to guess what the structure must be to justify it. My prediction is that both Utah and Otro will regret doing this within 5 years.
 
nelsonmuntz said:
A straight up equity investment looks so stupid for Otro that I can't begin to guess what the structure must be to justify it. My prediction is that both Utah and Otro will regret doing this within 5 years.
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They will not regret it at all they'll instantly have NIL funds to compete with the SEC and B1G.

The only way they fail is execution. They better have the right coaches, offensive and defensive that money can buy, cause soon they'll have the athletes

It's going to spill over into basketball and other sports. Give them a year or two, they'll be rolling.

There real problem is how will other conference teams deal with this equity advantage.
 
B1GEast said:
They will not regret it at all they'll instantly have NIL funds to compete with the SEC and B1G.

The only way they fail is execution. They better have the right coaches, offensive and defensive that money can buy, cause soon they'll have the athletes

It's going to spill over into basketball and other sports. Give them a year or two, they'll be rolling.

There real problem is how will other conference teams deal with this equity advantage.
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There really is no such thing as free money. Private equity normally have a substantially higher return on their investments than most asset management firms and seldom get a deal off the ground without multi-tier returns with a low end greater than 10% and a high end between 20%-25%.

When a firm advances money, they expect a return close to what would be expected from an advance in a credit card, without any of hhe risk involved. They aren't throwing money around out of kindness.

When the bill comes due I don't think this will be viewed in a positive light by those who are getting upfront cash on this deal.
 
FfldCntyFan said:
There really is no such thing as free money. Private equity normally have a substantially higher return on their investments than most asset management firms and seldom get a deal off the ground without multi-tier returns with a low end greater than 10% and a high end between 20%-25%.

When a firm advances money, they expect a return close to what would be expected from an advance in a credit card, without any of hhe risk involved. They aren't throwing money around out of kindness.

When the bill comes due I don't think this will be viewed in a positive light by those who are getting upfront cash on this deal.
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The private equity is going to monetize everything fans experience

Ticketing, pricing etc
Concessions
Corporate sponsorships
Brand licensing and trademarks
Fan engagement

I should clarify, it is a risk for the equity but for Utah it's a win

So my response is changed a bit. It's not win win

The equity firm might make a return, but in order to achieve this, the University has to turn that money into winning programs and win big.
 
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PE firms are far more risk averse than most people realize. They are also very good at presenting something as a win-win, only to have both wins end up in the PE firm's hands.

Where Utah should have an advantage over most entities that get enticed by PE dollars is that it is a state institution and when reality sets in (and ir becomes apparent that the cost far exceeds the benefit) the state may interfere.

Where i would however be most concerned is that Utah has the most lax usury laws in the country, which is why many higher interest lenders operate out of Salt Lake City.
 
B1GEast said:
The private equity is going to monetize everything fans experience

Ticketing, pricing etc
Concessions
Corporate sponsorships
Brand licensing and trademarks
Fan engagement

I should clarify, it is a risk for the equity but for Utah it's a win

So my response is changed a bit. It's not win win

The equity firm might make a return, but in order to achieve this, the University has to turn that money into winning programs and win big.
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Increasing prices will reduce the number of customers. Demand is elastic. And most schools have seen modest declines in attendance over the last 10+ years without big ticket price increases.

College athletics is a mature market where most of the price increases have already occurred. And if there are more price increases to push through, Utah didn't need the PE firm's involvement to do it. Now Utah has a partner that is expecting a 20%+ return on its investment, and I don't see where that is coming from other than out of Utah's pocket. Or Otro takes a bath on this investment. I do not see a magical third option.
 
FfldCntyFan said:
There really is no such thing as free money. Private equity normally have a substantially higher return on their investments than most asset management firms and seldom get a deal off the ground without multi-tier returns with a low end greater than 10% and a high end between 20%-25%.

When a firm advances money, they expect a return close to what would be expected from an advance in a credit card, without any of hhe risk involved. They aren't throwing money around out of kindness.

When the bill comes due I don't think this will be viewed in a positive light by those who are getting upfront cash on this deal.
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Otro is an equity fund, so they are looking for 20%+ and 2.5x their money.
 
B1GEast said:
The private equity is going to monetize everything fans experience

Ticketing, pricing etc
Concessions
Corporate sponsorships
Brand licensing and trademarks
Fan engagement

I should clarify, it is a risk for the equity but for Utah it's a win

So my response is changed a bit. It's not win win

The equity firm might make a return, but in order to achieve this, the University has to turn that money into winning programs and win big.
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It's going to be a win for The PE, and a loss for UTAH.
 
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nelsonmuntz said:
Increasing prices will reduce the number of customers. Demand is elastic. And most schools have seen modest declines in attendance over the last 10+ years without big ticket price increases.

College athletics is a mature market where most of the price increases have already occurred. And if there are more price increases to push through, Utah didn't need the PE firm's involvement to do it. Now Utah has a partner that is expecting a 20%+ return on its investment, and I don't see where that is coming from other than out of Utah's pocket. Or Otro takes a bath on this investment. I do not see a magical third option.
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At a lot of P2 schools ticket prices have increased over 10%. Has not impacted attendance at most of these schools. All it has done has increased the distance from the haves- Ohio State, Alabama, Georgia, Texas, and Michigan and the have nots - BC, Syracuse, Wake Forest, Rutgers, and Maryland, etc.
 
Forte said:
Someone explain to me BC at 54...???
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"The value of college athletic programs is being fueled in large part by escalating media rights deals for football and basketball."
 
Forte said:
Someone explain to me BC at 54...???
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On squawk box this morning when they released these, they went over the numbers by conference payout. I’m sure that’s where most of this is coming from. I forgot if the ACC payout was 40 million I was half asleep.
 
Hoophound said:
At least we made it. Stupid list though. Just call it "highest revenue".
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These numbers for the schools’ are silly for revenue. They include subsidies and block grants from the university or the state. For example UConn’s self-generating revenue is $62.7 million for 2024.
 
The calls for PE along with prior shenanigans of NIL, payouts, etc. have brought congress into the party. Should be fun to watch.
 
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