The Private Equity College Sports Hellscape Thread

[Ha Who]

They have effed up college athletics so bad, the vultures are circling. It is a matter of time. It will happen

 

[Rufus]

It seems to me that any private equity deal would only come after a conference is done expanding and has all of its wanted members for at least a generation. Signing this deal would complicate adding Notre Dame, Miami, UNC, FSU, or anyone else for the B1G. How would the new members receive private equity to match their conference peers if the deal was already signed before expansion?

Unless the B1G plans to stop at its current 18 members.

 

[UConnJim]

It seems to me that any private equity deal would only come after a conference is done expanding and has all of its wanted members for at least a generation. Signing this deal would complicate adding Notre Dame, Miami, UNC, FSU, or anyone else for the B1G. How would the new members receive private equity to match their conference peers if the deal was already signed before expansion?

Unless the B1G plans to stop at its current 18 members.

I would think that the private equity investment would set the Big 10 valuation for expansion candidates. In other words if the Big 10 revenue rights are worth $2 billion for 10%, or $20 billion total, it may cost an expansion candidate $1 billion to join the Big 10. So, pay $1 billion and get a revenue stream of $75 million growing say 8% per year.

 

[Rufus]

Big Ten commish clarifies league’s exploration into outside funding

The Big Ten is considering a $2 billion-plus cash infusion from UC investments, a pension fund connected to the University of California system.

www.sportsbusinessjournal.com

 

[jostar1]

 

[huskymedic]

 

[pick6s]

One note on the Big Ten potentially taking Stanford and Cal. Unexpectedly, it could mark the end of the ACC as a relevant conference due to lack of a significant television contract. Here's why:

Remember how the PAC 12 died partially because the Big 12 had taken the last remaining tv slots and there were none left for the PAC 12? There may be a similar situation coming where no significant networks will broadcast a substantial number of ACC games on tv (after the ACC GOR expires in 2036), because all the main networks are already taken. The Big Ten has gobbled up FOX (and FS1), CBS, and NBC (which they share with Notre Dame). The SEC has taken ESPN, ESPN2, and ABC. What's left?

The only available slots I see remaining are during the late night hours. The Big Ten will take that slot on FS1 since they now have western teams; none of FOX, CBS, or NBC are likely to broadcast 10pm football games nationally. Meanwhile, ESPN has late night openings since the SEC won't have any 10pm games. The question is whether they'd rather broadcast Big 12 or ACC games during that time.

The Big 12 currently has five teams out west: Utah, BYU, Arizona, Arizona State, and Colorado. Meanwhile, the ACC only has two teams out west: Stanford and Cal. If those two get invited to the Big Ten, the ACC will have no western teams and thus no value for ESPN, in terms of filling its late night slots. In this scenario, ESPN would pick the Big 12 over the ACC, leaving the ACC with no significant tv contract. To make matters worse, that'll likely lead to the main remaining ACC schools bolting for the Big 12, and then the ACC is really screwed. Remember that they're already going to lose UNC and one or all of UVA/FSU/Clemson to the SEC. They can't afford to lose all of them plus Miami and more to the Big 12 on top of that.

However, if Cal and Stanford remain in the ACC, the conference will likely add a few western teams- probably Boise State and one or more of UNLV/San Diego State/Washington State- and then it becomes unclear whether ESPN would prefer the Big 12 or ACC. So unexpectedly, it seems to me like the key to the ACC having a shot at survival as a relevant and main conference hinges on keeping Stanford and Cal.

 

[huskymedic]

 

[ZooCougar]

It's going to be awesome when PE rightsizes the payouts to Rutgirls.

 

[UConnTrumbull]

Meanwhile at the Big Ten

 

[huskymedic]

 

[upstater]

Private Equity sucks the joy out of youth sports. One firm that bought up youth hockey forbids parents from recording their kids unless the parents pay a monthly subscription fee.

Wall Street Is Paywalling Your Kids’ Sports

Private equity-owned Black Bear Sports Group is buying up youth hockey — and icing out parents who want to record their kids’ games.

www.levernews.com

 

[JohnFSilver]

Private Equity is gonna want to make money and get ROI. This is such a bad idea.

 

[JohnFSilver]

Private Equity sucks the joy out of youth sports. One firm that bought up youth hockey forbids parents from recording their kids unless the parents pay a monthly subscription fee.

Wall Street Is Paywalling Your Kids’ Sports

Private equity-owned Black Bear Sports Group is buying up youth hockey — and icing out parents who want to record their kids’ games.

www.levernews.com

How about buying those high school streams where it makes FloSports look like a Scorese film?

Pay $10, and it doesn't work. Newspapers is a good example.

The perfect newspaper customer for private equity is one who pays for the subscription but actually doesn't get delivery or or go the website.

It's the same for almost everything in PE and content. They aren't in the business of taking less money for customer experience

 

[Kolumbo]

Private Equity sucks the joy out of youth sports. One firm that bought up youth hockey forbids parents from recording their kids unless the parents pay a monthly subscription fee.

Wall Street Is Paywalling Your Kids’ Sports

Private equity-owned Black Bear Sports Group is buying up youth hockey — and icing out parents who want to record their kids’ games.

www.levernews.com

Here's an idea. Maybe the PE would consolidate all of the various social media sites and charge for that. Instead of programs each having multiple message boards and social media pages, they all get rolled into one PE/Conference controlled app. If you want to follow your team with news articles, message boards, facebook and twitter posts, you need to subscribe. I would imagine the revenue generated would be significant.

It's irritating when I search for another programs message board and some are only accessible to subscribers. The benefit is it would be easier to find message boards. Imagine a very active conference message board where not only are we arguing with each other, but talking smack with our competitors. The Big East board would include the Boneyard and the BlueJay Underground.

 

[WrenchFan69]

It has begun

 

[CL82]

They created a for-profit entity, which houses "athletic personnel". So pretty much this model surrenders, any pretense that college athletics are anything other than professional sports. The article says they're the six schooled, give or take, to have done this, but the first two partner within an outside equity firm.

 

[huskymedic]

 

[JVN]

This could be favorable for UConn. I remember reading (somewhere?) that RedBird was advising the B12 that inviting UConn would add value to the conference.

 

[Hoophound]

This could be favorable for UConn. I remember reading (somewhere?) that RedBird was advising the B12 that inviting UConn would add value to the conference.

If that’s the case, it will happen very soon. I doubt they’d work out a deal like that and then add schools shortly after. We’d probably be in the formula right now.

 

[CL82]

If that’s the case, it will happen very soon. I doubt they’d work out a deal like that and then add schools shortly after. We’d probably be in the formula right now.

We'll see. I have mixed feelings whenever we talk about joining the big 12. A P4 membership for us is absolutely critical financially, so obviously I'm excited about the possibility, on the other hand, I like playing teams that are drivable road games with which we have some modicum of history. But, on the other hand, annual home in aways with Kansas would be a blast.

 

[Hoophound]

We'll see. I have mixed feelings whenever we talk about joining the big 12. A P4 membership for us is absolutely critical financially, so obviously I'm excited about the possibility, on the other hand, I like playing teams that are drivable road games with which we have some modicum of history. But, on the other hand, annual home in aways with Kansas would be a blast.

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.

 

[jostar1]

Was reading on CSNBBS that Will Weatherford is the Managing Partner of Weatherford Capital and is the chairman of the USF Board of Trustees. He pushed for the new USF stadium.

 

[Forte]

The takeaway from all of this is that the Big 12 is attempting to position itself for meaningful revenue sharing for top talent in both basketball and football, in an effort to remain relevant alongside the SEC and Big Ten. The divide has already begun, and the Big East as a whole won’t be able to keep pace. Even the Big East president has acknowledged this reality.

The future feels fairly telling for the conference. CBS Sports Network could ultimately end up locking up a larger share of future Big East conference games through an expanded partnership as the media landscape continues to shift. I’ve always loved the Big East and the tradition at MSG, but it will be interesting to see what tune the “UConn belongs in the Big East” crowd is singing a few years from now.

 

[How Sway?!]

This could be favorable for UConn. I remember reading (somewhere?) that RedBird was advising the B12 that inviting UConn would add value to the conference.

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.