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Big12 Considering 1 Billion From Private Equity Investment Firm
- Thread starter InTheBuff
- Start date
BuffBronco
Well-Known Member
Jiffy Lube Conference
A budget that small doesn’t warrant a seasoned CFO. Especially as a tiny piece of a larger org with financial ops at the higher level. RG shouldn’t even be acting as a chief exec anyway
From the article @The Alabaster Yak quoted:
I don't think I can put enough
emojis in to describe my response to the first sentence.
Whoever wrote that obviously has zero idea how PE firms are structured and operate. I mean it's such journalism malpractice to write that statement that the author immediately exposes themselves as an unserious financial idot.
I'm currently spending an inordinate amount of time working through the extensive legal (contractual and regulatory) issues involved with a PE firm wanting to extend the length of their investment to hold it for longer than 7 years.
"Long term" my ass. Hold periods are 3-5 years. They've been trending up for the last decade, but more than 7 is pretty damn hard to manage within the typical pe fund legal structure.
It may be "long term" in terms of investors not fleeing because of a couple quarters of bad results as happens in publicly traded companies, but that's not a valid comparison. 3-5, and legally hard to get past 7 is not long term.
Anyway, all of that is not to say that it's a good or bad deal for the B12 or CU. It could be a net positive for both.
@Buff_nc has had the best "both sides of the deal win" investment thesis I've heard so far.
And if that is the thesis, I'd back it. When market participants are notoriously timid and conservative (small c) as universities notoriously are, an aggressive move in a dynamic market is usually the winning move.
Just be ready when they finally figure out how to counterpunch.
I don't think I can put enough
emojis in to describe my response to the first sentence.Whoever wrote that obviously has zero idea how PE firms are structured and operate. I mean it's such journalism malpractice to write that statement that the author immediately exposes themselves as an unserious financial idot.
I'm currently spending an inordinate amount of time working through the extensive legal (contractual and regulatory) issues involved with a PE firm wanting to extend the length of their investment to hold it for longer than 7 years.
"Long term" my ass. Hold periods are 3-5 years. They've been trending up for the last decade, but more than 7 is pretty damn hard to manage within the typical pe fund legal structure.
It may be "long term" in terms of investors not fleeing because of a couple quarters of bad results as happens in publicly traded companies, but that's not a valid comparison. 3-5, and legally hard to get past 7 is not long term.
Anyway, all of that is not to say that it's a good or bad deal for the B12 or CU. It could be a net positive for both.
@Buff_nc has had the best "both sides of the deal win" investment thesis I've heard so far.
And if that is the thesis, I'd back it. When market participants are notoriously timid and conservative (small c) as universities notoriously are, an aggressive move in a dynamic market is usually the winning move.
Just be ready when they finally figure out how to counterpunch.
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I don’t see how they will harvest their investment before the next TV contact. You?From the article @The Alabaster Yak quoted:
I don't think I can put enough
Whoever wrote that obviously has zero idea how PE firms are structured and operate. I mean it's such journalism malpractice to write that statement that the author immediately exposes themselves as an unserious financial idot.
I'm currently spending an inordinate amount of time working through the extensive legal (contractual and regulatory) issues involved with a PE firm wanting to extend the length of their investment to hold it for longer than 7 years.
"Long term" my ass. Hold periods are 3-5 years. They've been trending up for the last decade, but more than 7 is pretty damn hard to manage within the typical pe fund legal structure.
It may be "long term" in terms of investors not fleeing because of a couple quarters of bad results as happens in publicly traded companies, but that's not a valid comparison. 3-5, and legally hard to get past 7 is not long term.
Anyway, all of that is not to say that it's a good or bad deal for the B12 or CU. It could be a net positive for both.
@Buff_nc has had the best "both sides of the deal win" investment thesis I've heard so far.
And if that is the thesis, I'd back it. When market participants are notoriously timid and conservative (small c) as universities notoriously are, an aggressive move in a dynamic market is usually the winning move.
Just be ready when they finally figure out how to counterpunch.
gotta get the tv rights value up big time. ratings. ratings. ratings. that is the long term pay off.
Dominate the cfp with purchased talent. Someone else* will want to buy before it goes to contract.
*Media co would be the hypothesized purchaser. $10 says that somewhere in the purchase agreement is a stipulation that whoever owns this equity piece gets first bite of the apple when the next media deal goes to market.
I mean, I'm serious when I say I would back this investment thesis.
Exactly, thus this seems like at least a 7 year horizon to me with stipulations for the conference staying intact. This ain’t your normal PE deal, to me.
I hear you. Purchased talent could be Clemson and/ir FSU as value drivers in front of next contract.
I’m not sure about a near-term secondary buyer.
No doubt this equity holder will get preferences on payout.
I like the deal. Just trying to understand more about mechanics.
It’d be cool, IMO, if this was to somehow help facilitate the top ACC programs coming to the Big 12.
I think the top 4-6 of the ACC combined with the Big 12 would be a very formidable conference in both football and basketball and would probably command close to B1G and SEC money on the next contract.
I think the top 4-6 of the ACC combined with the Big 12 would be a very formidable conference in both football and basketball and would probably command close to B1G and SEC money on the next contract.
It’s gotta be what some of the money is to be used for. There’s not enough cache in the current teams to drive huge value for thr next contract IMO.
But how do you do that and convince those 4-6 programs to come to the Big 12 rather than accept their invite into P2? Pay their exits fees and sell them on the new media deal closing the gap substantially
I think that’s the story. Will it stick? Your concern is legit.
Maybe eventually purchaser of newly funded B12 will be SEC and/or B1G.
I don't think throwing cash at them will bring UNC, Clemson or FSU unless there's no P2 interest. I do think it may help lure programs like Miami, NCSU and Louisville.
I think it obviously depends on whatever the P2 offers are. Will those conferences help with exit fees? With they get full shares of media rights in those conferences right away?
There’s an argument that a 20-22 team conference with the top 4-6 of the ACC mixed with the Big 12 is pretty close to the P2 and would be seen as a true P3. Throw in the competitive aspect where FSU, Clemson, UNC, etc don’t have to be in the same conference as Bama, Georgia, OU, Texas, LSU, Ohio State, Michigan, Oregon, PSU, SC, etc.
I've seen teams try that approach (blow one off income to acquire players to improve the competitveness), I yet have to see it work long-term. IMO one off income needs to be spent on things that help you long-term and that are sustainable.
BerkeleyBuff
Well-Known Member
Miami/ NCSU/ Louisville/ Va Tech is my favorite (realistic) Big XII expansion plan.
I understand. I hate it, but I understand.
BerkeleyBuff
Well-Known Member
If UNC, FSU, and Clemson leave the ACC, would you rather VT stay in the ACC instead?
No, I wouldn't want VT playing in an irrelevant ACC.
I also have no interest in VT playing in the XII.
Faced with those options, I'd rather see Tech move down into FCS or whatever the new equivalent will be.
I think you're seeing it slightly wrong. "Purchased talent" /= Clemson or FSU (although could be part of the value increase plan).
What I mean is quite literally purchased talent. As in on field (and to lesser extent court) talent. If the B12 is paying their rosters 2x what the B1G & SEC do, then the B12 will presumably dominate the cfp for then next 4-5 years.
I love the idea of conference naming rights and can hardly believe it hasn't been done already. The conference names are meaningless anyway.
The Big 10 and Big 12 don't have 10 or 12 members.
The Atlantic Coast includes teams in Kentucky, Texas and SF Bay Area.
The Southeastern includes Texas, Oklahoma and Missouri.
The Big East stretches to Nebraska.
The names are nonsensical and the members have changed so much that there's not some inviolate tradition going on. Take that money. Fans are used to this now anyway. Nike Tour, Busch Series, etc. We're also used to seeing sponsor patches on NBA and MLB uniforms along with stadium and other prominent sponsorships. So get paid. Big 12 needs to do all this stuff to close the revenue gap to the point where our money is more than enough so the money above that the SEC and B1G are getting is on the flattened curve where returns are significantly diminished.
The Big 10 and Big 12 don't have 10 or 12 members.
The Atlantic Coast includes teams in Kentucky, Texas and SF Bay Area.
The Southeastern includes Texas, Oklahoma and Missouri.
The Big East stretches to Nebraska.
The names are nonsensical and the members have changed so much that there's not some inviolate tradition going on. Take that money. Fans are used to this now anyway. Nike Tour, Busch Series, etc. We're also used to seeing sponsor patches on NBA and MLB uniforms along with stadium and other prominent sponsorships. So get paid. Big 12 needs to do all this stuff to close the revenue gap to the point where our money is more than enough so the money above that the SEC and B1G are getting is on the flattened curve where returns are significantly diminished.
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BerkeleyBuff
Well-Known Member
What?!?
The problem is that everybody has $22m to work with for paying players every year and even if the PE money can be distributed to individual collectives in the B12, the B1G and SEC programs have the money to match. I don’t see the PE value prop being about on field talent acquisition.
He doesnt want to see his team play in an irrelevant ACC but he’s cool with them dropping to FCS… because that’s super relevant
I would rather see a team I root for competing at a level where they had the resources and commitment to compete for championships than my team being a perpetual doormat at a higher level.
No fun when there's little in a season that makes you cheer and no hope that things will be better next year.