The Private Equity College Sports Hellscape Thread | Page 11 | The Boneyard

The Private Equity College Sports Hellscape Thread

CTFAN4LIFE said:
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.
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Exactly. It seems that a large part of value is determined by media revenue. Thus schools who are on the outside, looking in, should be on the outside, looking in because they're worth less then the schools that are already in a P4 conference, because they have P4 media revenue. The reasoning is indisputably circular.
 
I would take the CNBC numbers with a grain of salt. SD State had an athletic budget of $66 million last year, but the CNBC numbers show a revenue number of $104 million.
 
Kolumbo said:
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. "
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The problem is they lack men’s soccer? How is that remotely consequential?
 
Seriously though.
ZooCougar said:
If the SEC played men’s soccer they would no doubt claim that they invented the game.
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Some of these SEC programs could really load up and pay for championships. At a minimum it would be a way to up their championship totals outside of basketball and football. They could hire the best of the best college players or recruit directly from Brazil and Argentina. Imagine Messi coaching at Miami. If Messi were to get involved, I'm sure a Florida or Texas could throw their hats into the ring to play semi-pro ball. Crazy talk but championships are championships.

The Sun Belt has a few P4 programs:
Kentucky
South Carolina
West Virginia
Central Floria
 
Kolumbo said:
Seriously though.

Some of these SEC programs could really load up and pay for championships. At a minimum it would be a way to up their championship totals outside of basketball and football. They could hire the best of the best college players or recruit directly from Brazil and Argentina. Imagine Messi coaching at Miami. If Messi were to get involved, I'm sure a Florida or Texas could throw their hats into the ring to play semi-pro ball. Crazy talk but championships are championships.

The Sun Belt has a few P4 programs:
Kentucky
South Carolina
West Virginia
Central Floria
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Messi couldn’t be bothered.
 
I received an alumi e-mail that detailed how Hayley Segar (CLAS '17 and New London native) went on Shark Tank to pitch her swimsuit company ultimately making a deal with 2 of the sharks.
Alum Hayley Segar Wows ‘Shark Tank’ Judges, Lands a Deal with Two of Them - UConn Today
This is a fantastic story for her. Some of the swimsuits even have names corresponding to CT locales (Foxon, Harkness, Woodmont, Thames, Merritt).

Ok, great, now we have a nutmeg daughter and UConn alum who has the ears of some billionaire sharks...what's the next sales pitch gonna be?^_^
 
This whole thread is going to seem quaint in a couple of months time.

To use a Warren Buffet analogy, "Only when the tide goes out do you learn who has been swimming naked."

Universities are looking at total calamity right now.

Study the federal research dollars in any budget. Now, it's bad enough research has shut down (for some projects, they'll totally scuppered) but then realize that the university takes 60% of those dollars to cover overhead (building, salaries, benefits, materials). How are they going to make up the shortfall?

Good luck.
 
upstater said:
This whole thread is going to seem quaint in a couple of months time.

To use a Warren Buffet analogy, "Only when the tide goes out do you learn who has been swimming naked."

Universities are looking at total calamity right now.

Study the federal research dollars in any budget. Now, it's bad enough research has shut down (for some projects, they'll totally scuppered) but then realize that the university takes 60% of those dollars to cover overhead (building, salaries, benefits, materials). How are they going to make up the shortfall?

Good luck.
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jostar1 said:
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National media when UConn uses institutional support: I caN’T bEliEVe ThEy rEquIRe sUpPOrT tO mAiNTaIN ATheLITicS. UcONn sHoULd juST dRoP fOoTBalL

National media when FSU uses institutional support (probably): in this day and age it’s such a smart move to keep up with never ending arms race. Kudos to FSU for getting ahead and being proactive.
 
Last edited:
huskymedic said:
www.toledoblade.com

Briggs: How much would it cost to ‘buy’ the Toledo football program?

What if college football programs could be bought and sold on the open market as if they were NFL franchises? What would they be worth? A new study ...
www.toledoblade.com www.toledoblade.com
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These writers do not understand how the revenue is generated for these programs. I will never discount the ability of a seller to find the stupidest private equity fund in the market, but I really struggle with how it is possible to assign value to any of these athletic programs that are dependent on student fees or some other kind of subsidy that can be cut off.
 
huskymedic said:
www.toledoblade.com

Briggs: How much would it cost to ‘buy’ the Toledo football program?

What if college football programs could be bought and sold on the open market as if they were NFL franchises? What would they be worth? A new study ...
www.toledoblade.com www.toledoblade.com
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Ryan Brewer, an associate professor of finance at Indiana University Columbus.
There's a reason someone is an associate professor in finance...

actualize that potential and serve the greater university's initiative
The greater university good, which presumably would have a great deal to do with the student body and student athletes, is not being served by big-time college athletics. This guys is probably so blinded by all of this he can't possibly see that.

Sure, spin off these college football programs (and/or basketball for that matter) from their universities. The univesities get lisencing revenues (or some revenue stream) from the naming. The equity enjoyes the returns (or quite possibly not) from running these teams as professional sports franchises. Sure, I get the concept. But, what would that have to do with college athletics at it's core? Why would you need student athletes to be the participants? Now we're talking NFL super light. I would have to be real bored to tune in for that.....and I'm never that bored.
 
uconndogs said:
Ryan Brewer, an associate professor of finance at Indiana University Columbus.
There's a reason someone is an associate professor in finance...
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Not sure what you're getting at here.
 
upstater said:
Not sure what you're getting at here.
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I was just being snarky. I suspect this person did elaborate valuation methodologies without much thinking about real world implications. More to the point, I just don't see how these programs hold on to their fan base when and if they ever get meaningfully divorced from their universities.
 
uconndogs said:
I was just being snarky. I suspect this person did elaborate valuation methodologies without much thinking about real world implications. More to the point, I just don't see how these programs hold on to their fan base when and if they ever get meaningfully divorced from their universities.
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Ah, gotcha.

I certainly agree with you that when pundits, lawyers, presidents and even judges talk about fairness and student athletes being paid they never ever ever look at an actual university budget to see what is going on.

If they did, they'd realize that regular students are subsidizing the vast majority of these depts (not all, there are a handful that have broken free) with much more than student fees.

As Im the father of a senior applying to college right now, I've seen that they are factoring in a bunch of costs to total cost of higher ed. that my child would pay regardless if she were a student or not. $4k over the money the school is going to take in. Yes, my daughter will have a cell phone whether or not she is in college. Yes, my daughter will pay commuter costs whether she's in college or on the way to a job.

These "costs" are only there because the schools needed to inflate actual costs in order to pay athletes. So brainless.

As for the last part, I've been saying for a while that the teams could keep their fanbase in much of the country (outside the west coast and northeast) by licensing the university's brand name for their professional enterprise. So they would be the UConn Huskies pro basketball or semi-pro basketball team.
 
upstater said:
Ah, gotcha.

I certainly agree with you that when pundits, lawyers, presidents and even judges talk about fairness and student athletes being paid they never ever ever look at an actual university budget to see what is going on.

If they did, they'd realize that regular students are subsidizing the vast majority of these depts (not all, there are a handful that have broken free) with much more than student fees.

As Im the father of a senior applying to college right now, I've seen that they are factoring in a bunch of costs to total cost of higher ed. that my child would pay regardless if she were a student or not. $4k over the money the school is going to take in. Yes, my daughter will have a cell phone whether or not she is in college. Yes, my daughter will pay commuter costs whether she's in college or on the way to a job.

These "costs" are only there because the schools needed to inflate actual costs in order to pay athletes. So brainless.

As for the last part, I've been saying for a while that the teams could keep their fanbase in much of the country (outside the west coast and northeast) by licensing the university's brand name for their professional enterprise. So they would be the UConn Huskies pro basketball or semi-pro basketball team.
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We both know school costs aren't rising to cover athletes. They're rising because of admin bloat and expensive buildings
 
Patman said:
We both know school costs aren't rising to cover athletes. They're rising because of admin bloat and expensive buildings
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I don't know how you come up with that statement as a response.
 
EdgewoodNHV said:
Looking forward to Private Equity ruining another thing
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Private equity is a big net positive to the economy. Most of PE's history has been providing capital to companies that had difficulty raising capital without PE. This has saved and/or created millions of jobs over the last 60ish years since the beginning of the industry. Venture Capital, a subset of PE, has funded Google and Apple, among tens of thousands of other technology innovators. PE often overpays, which is good for existing owners and for employees who have stock options, and PE's presence in the market as an exit avenue encourages other companies to invest in their businesses because they feel more confident about being able to sell when they want.

My issues with PE's involvement in college athletics are more because college athletics is a terrible investment idea rather than concerns about making college athletics any more screwed up than it already is. If, or when, college athletics implodes, it won't be private equity's fault.
 
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