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Big12 Considering 1 Billion From Private Equity Investment Firm

BerkeleyBuff said:
1. That's an enormous if
2. The rest is only your belief, one we all hope is true, but may or may not have any bearing on reality.
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The hiring of our new President and Chancellor along with Prime, and the reception of the Boulder Community tells me that we have made the commitment and are now smart enough again to understand the value of a good Football program and other good things at the school. 20 years ago, the wrong people were in charge, the wrong things happened, and we flushed ourselves down a toilet. Colorado is being closely watched by those that matter, and the decisions and results we are able to get this year are massive towards our future in every possible way. Success on the field and keeping Prime are worth Millions and Millions to everyone.
Sko Buffs
 
4BienemyTDs said:
The hiring of our new President and Chancellor along with Prime, and the reception of the Boulder Community tells me that we have made the commitment and are now smart enough again to understand the value of a good Football program and other good things at the school. 20 years ago, the wrong people were in charge, the wrong things happened, and we flushed ourselves down a toilet. Colorado is being closely watched by those that matter, and the decisions and results we are able to get this year are massive towards our future in every possible way. Success on the field and keeping Prime are worth Millions and Millions to everyone.
Sko Buffs
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Blame Hoffman for starting the slide with the stupid recruiting restrictions imposed on Barnett and, Benson for really killing the program by keeping Hawkins and the subsequent hires.
 
The Alabaster Yak said:
Fair enough. I guess I see the Big 12 as pretty wide open year to year, even with the additions of Miami, NCST, VT and Louisville, whereas VT as zero chance at competing in the current iteration of the ACC.
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Huh? VT is more dedicated to their football program than anyone in the ACC after FSU and Clemson. And FSU has only 1 more title game appearance than VT over the past 10 years.
 
I find the idea of investing ourselves long term with "peer" institutions like ucinn, directional fla., kjuco state, bailer, byu, houston, and wvu to be imprudent. doing that in partnership with PE seems especially risky.

look you have the crazy theist schools, the commuter schools, the academic cesspools (these pods overlap), and then you have the handful of programs who shouldn't be in this arranged marriage of convenience.

CU should do better than this. so should utah, kansas, arizona, and even asu. tech, tcu, iowa state, okie state, all have had movements in the sun but are not in the same class as the small group that should be better than this.

signing away our tv rights in support of this endeavor for the long term is a huge risk.
 
Liver said:
CU should do better than this. so should utah, kansas, arizona, and even asu. tech, tcu, iowa state, okie state, all have had movements in the sun but are not in the same class as the small group that should be better than this.
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kinky GIF
 
The Alabaster Yak said:
I’m not sure looking at this situation through a traditional PE investment lens is a good idea. Uncharted territory for a unique product and market with constantly changing dynamics.
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Which makes me question the decision even more. Looking at the landscape of college football, would you consider putting an enormous sum of money into the Big 12 to be a safe bet? They're in it to recoup their investment and make money - if it helps the Big 12, all the better, but their primary goal is to make money. Dumping a huge amount of cash into a second tier conference with really no hope of ever comparing to the top tier, especially when there is so much ambiguity and instability in the college football world, well, it's a real head scratcher for me and gives me great pause as to what the long term effects will be for the member institutions.
 
Alfred91 said:
Which makes me question the decision even more. Looking at the landscape of college football, would you consider putting an enormous sum of money into the Big 12 to be a safe bet? They're in it to recoup their investment and make money - if it helps the Big 12, all the better, but their primary goal is to make money. Dumping a huge amount of cash into a second tier conference with really no hope of ever comparing to the top tier, especially when there is so much ambiguity and instability in the college football world, well, it's a real head scratcher for me and gives me great pause as to what the long term effects will be for the member institutions.
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The alternative is to have a $45-$50m/year gap between Rutgers and every Big 12 program.

I agree that if the only value of this PE partnership is a one time cash infusion that gets divvied up 16 ways after the conferences uses a chunk on various things, then it seems pretty irrelevant and potentially not great long term.

However, if the idea is for this company to help fund buyouts of top ACC programs and lure them to the Big 12 with the idea that their additions will increase the conference media deal in 2031 then it’s a potential game changer for the Big 12.

There are a lot of unknowns and most of the conversation is speculation, but the “source” said their investment is being done with the idea from CVC that the next media deal doubles from $2.3B to around $5B. There’s only one way to legitimately double this conferences valuation and that’s adding meaningful brands.

We’ll see how it all comes together but as I said at the beginning, the alternative is doing nothing and each B12 program making $31m/year to Rutgers’ $75m/year
 
The Alabaster Yak said:
I’m not sure looking at this situation through a traditional PE investment lens is a good idea. Uncharted territory for a unique product and market with constantly changing dynamics.
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Man I still remember the ShopKo in Longmont.
 
we should do everything we can to create optionality for the next round. i am sure ucinn and similar are willing to sign anything to be in an almost power conference. we are not them.

the former pac teams should work as a block.

we'd be better off forming a new conference with them and some of the acc that wants to flee than get in bed forever with the b12.
 
Alfred91 said:
This.

Ask Toys R Us, Sears, ShopKo, and about a billion other retailers that private equity has "come to the rescue of". This is baaad news.
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Have to do a deeper dive on any given situation. Many times a company doesn't look into PE until they're already desperate/ really beyond saving. Plenty of sports programs use PE effectively now.
 
Liver said:
we should do everything we can to create optionality for the next round. i am sure ucinn and similar are willing to sign anything to be in an almost power conference. we are not them.

the former pac teams should work as a block.

we'd be better off forming a new conference with them and some of the acc that wants to flee than get in bed forever with the b12.
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Cool. So, back to reality...
 
Liver said:
we should do everything we can to create optionality for the next round. i am sure ucinn and similar are willing to sign anything to be in an almost power conference. we are not them.

the former pac teams should work as a block.

we'd be better off forming a new conference with them and some of the acc that wants to flee than get in bed forever with the b12.
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What would you think if the Big Allstate12 ends up taking the deal from the private equity firm and then using that windfall to get Florida State and Clemson to join the conference ?? Hmm ??
 
InTheBuff said:
What would you think if the Big Allstate12 ends up taking the deal from the private equity firm and then using that windfall to get Florida State and Clemson to join the conference ?? Hmm ??
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Add FSU, Clemson and Miami and drop Houston, Cincinnati and UCF and we will have ourselves a pretty decent conference.

Of course, that won’t happen. Conferences don’t drop members. But that’s a move that would get some attention.
 
Not Sure said:
Add FSU, Clemson and Miami and drop Houston, Cincinnati and UCF and we will have ourselves a pretty decent conference.

Of course, that won’t happen. Conferences don’t drop members. But that’s a move that would get some attention.
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Money challenges on the horizon. Could cause some to break away together to form something new. We might also see some schools unwilling or unable to restructure their AD as a private sector entity and bow out of the big stage.
 
skibum said:
From the article @The Alabaster Yak quoted:



I don't think I can put enough :ROFLMAO::ROFLMAO::ROFLMAO::ROFLMAO: 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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You're are right that should have been rephrased. There are instances of what I wrote, and as I live in silicon valley 5 years is long term for me. My pitch was exactly over 3-5 years in fact so not sure why you got so hot over the timeframe.
By and large They are scalpers and vultures, looking to cut costs, put borrowing costs entirely on the company, basically rape them. I don't see a business plan like that that works in this scenario though.
 
Buff_nc said:
You're are right that should have been rephrased. There are instances of what I wrote, and as I live in silicon valley 5 years is long term for me. My pitch was exactly over 3-5 years in fact so not sure why you got so hot over the timeframe.
By and large They are scalpers and vultures, looking to cut costs, put borrowing costs entirely on the company, basically rape them. I don't see a business plan like that that works in this scenario though.
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I wasn't hot after you. You have the best pitch I've heard so far. In the post you quoted, I even said "I'd back it." "It" being your investment thesis. It's a good one. I'd deploy money behind it.

I was hot after the idot that wrote the sh!tty misleading article.

If you're in the valley, your frame of reference is VC, not PE. VC hold times are also getting longer. Annoyingly long - I've got a fund that is literally in year 20, and they just told me it will be 1-2 years more before they're done. Their investment period ended fifteen years ago.

OTOH, we've made a good chunk of change from them, so they kinda bought themselves a long leash with good results. Funny how that works.
 
Anyone who thinks a PE infusion that, at best, gets existing members closer to the B1G/ SEC for perhaps a couple of years is somehow going to lure FSU or Clemson into a long term Big XII arrangement... Well, please let me know what you're smoking, because I'd love to try it.
 
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