B1G considering $2B private equity deal

[BamaBoySince89]

Smells of desperation. If you can’t beat them, just find money.

 

[KrAzY3]

Smells of desperation. If you can’t beat them, just find money.

The irony is this actually probably will do more for non-revenue sports than it will for NIL.

I was kind of dumbfounded by this whole thing at first until I considered it a bit. Firstly, I don't get the valuations, that's dumb. Unless I consider the fact that despite athletic departments not making a profit, they do still generate revenue. So setting that aside, my understanding of the limitations of both Title IX and the NIL funding from schools means that this won't change things at all for the top programs, which is probably why they seemed to be opposed. The big schools are going to max out their NIL funding much more easily.

For instance, Ohio State made 250 million in revenue in 2023 from what I understand. I would expect about 150 million of that to be from the football program. Maryland made 107 million while UCLA made 103 million. Those numbers should come up some, but that shows the gap they are dealing with. In UCLA's case they are dealing with a estimated increased in 10 million annually for travel along with the new 20 million annual NIL allotment. That's going to be a big chunk of their budget.

The issue is as far as I'm aware the Big 10 isn't busy dropping sports, so their response to increased travel and NIL cost (which carry with it additional Title IX burdens) is to basically go around looking for money. That just speaks to the poor position they find themselves in. The 100 million will be gone swiftly, but that fee they'll have to pay will go on forever.

Edit: Also if you want to add a weird wrinkle to it, the fund is the University of California pension system, which includes UCLA but oddly enough California which is in the ACC. So an ACC college is essentially investing in the Big 10, weird stuff.

 

[BamaNation]

USC & Meechagan throw a wrench in...

Sources: USC, U-M question Big Ten capital deal

Trustees at Michigan and USC questioned the Big Ten's proposed $2B-plus private capital deal, with one sticking point during a Tuesday call being it doesn't address the root issue -- soaring costs -- that has made the need for cash so imperative.

www.espn.com

 

[arthurdawg]

has private equity ever improved a product?

It has not improved the state of medical care in this country by and large.

 

[mdb-tpet]

It has not improved the state of medical care in this country by and large.

I have yet to see a person/group who are solely interested in profit make any organization, system, company, group, school, country, city, county, church better in any meaningful way. On the contrary, mostly they suck the resources out of every organization they invest in and often leave those organizations either in desperate straights or completely ruined/shut down.

A short list from the internet of companies that have been bankrupted by Private Equity groups. Many of these could and maybe should have been saved. Best of luck to the Big10 if they think they are immune to the disastrous profiteering of private equity.

• A&P (grocery chain)[1]
• At Home[2]
• Big Lots[3]
• Brookstone[4]
• Claire's[5]
• Envision Healthcare[6]
• Friendly's[1]
• GenesisCare[6]
• Genesis HealthCare[7]
• Hearthside Food Solutions - aka "H-Food Holdings LLC"[3][8]
• Hooters[9]
• Hudson's Bay Company[10]
• Instant Brands (maker of Instant Pot and Pyrex)[11]
• Joann[12]
• Kmart[13]
• On the Border Mexican Grill & Cantina[14]
• Party City[15]
• Payless Shoe Source[4]
• Prospect Medical Holdings[16]
• RadioShack[4]
• Red Lobster[11]
• RJR Nabisco[17]
• Sears[4]
• Sports Authority[4]
• Steward Health Care[18]
• TGI Fridays[19]
• Thames Water[11]
• The Limited[4]
• Toys R Us[4]
• True Value (hardware retailer)[20]
• TWA[21]
• Vice Media[22]
• Wellpath[3]

 

[TideEngineer08]

The irony is this actually probably will do more for non-revenue sports than it will for NIL.

I was kind of dumbfounded by this whole thing at first until I considered it a bit. Firstly, I don't get the valuations, that's dumb. Unless I consider the fact that despite athletic departments not making a profit, they do still generate revenue. So setting that aside, my understanding of the limitations of both Title IX and the NIL funding from schools means that this won't change things at all for the top programs, which is probably why they seemed to be opposed. The big schools are going to max out their NIL funding much more easily.

For instance, Ohio State made 250 million in revenue in 2023 from what I understand. I would expect about 150 million of that to be from the football program. Maryland made 107 million while UCLA made 103 million. Those numbers should come up some, but that shows the gap they are dealing with. In UCLA's case they are dealing with a estimated increased in 10 million annually for travel along with the new 20 million annual NIL allotment. That's going to be a big chunk of their budget.

The issue is as far as I'm aware the Big 10 isn't busy dropping sports, so their response to increased travel and NIL cost (which carry with it additional Title IX burdens) is to basically go around looking for money. That just speaks to the poor position they find themselves in. The 100 million will be gone swiftly, but that fee they'll have to pay will go on forever.

Edit: Also if you want to add a weird wrinkle to it, the fund is the University of California pension system, which includes UCLA but oddly enough California which is in the ACC. So an ACC college is essentially investing in the Big 10, weird stuff.

I believe you've hit a nail on the head.

Bringing in the west coast teams. For football, it's one thing. But for all of the non-revenue sports and the increased travel costs it has brought to the table...

I agree with you that the SEC needs to sit tight and let this play out.

 

[NoNC4Tubs]

Still seems like good news for the SEC. Let the Big 10 do this because some of their programs are struggling to keep up (a program like UCLA is incurring an additional 30 million annual expense with 100 million annual revenue, less than half what Alabama or Ohio State takes in). With Title IX this means 50 million to men's sport in one a time payment. Not moving the needle much frankly (Alabama spent about that much on a golf practice facility), but it will mean they can't expand again until the 2040s and they'll give up 5% of their revenue in perpetuity. The only way this bothers me if if the SEC foolishly copies them.

Hold my beer...

 

[arthurdawg]

Still seems like good news for the SEC. Let the Big 10 do this because some of their programs are struggling to keep up (a program like UCLA is incurring an additional 30 million annual expense with 100 million annual revenue, less than half what Alabama or Ohio State takes in). With Title IX this means 50 million to men's sport in one a time payment. Not moving the needle much frankly (Alabama spent about that much on a golf practice facility), but it will mean they can't expand again until the 2040s and they'll give up 5% of their revenue in perpetuity. The only way this bothers me if if the SEC foolishly copies them.

Make that Greg Sankey says hold my beer. Generally not impressed with his tenure.

 

[dtgreg]

Make that Greg Sankey says hold my beer. Generally not impressed with his tenure.

He seems to be the one resisting. Not sure if he'll be forced out and his successor takes the kick-back (did I say that?) to do it.