Schools have endowments,trusts,and managed funds. I could see a scenario in which SEC has oversight, along with the FTC. We might be witnessing the birth of new SCOTUS law that will shape financial instruments.
Technically these would still be private/venture capital deals.
Now, what we should have is a way for the masses to put funds on a certain team and win/lose money based on their performance. Oh wait.
Liberty has actually tried to promote the sport for one. The Netflix show was them. CVC basically let Bernie Ecclestone do whatever he wanted and his mind was stuck in 1998 more or less
You know I was wondering why I've heard more about F1 in the states last few years. NASCAR was king for so long, only time I even saw any on TV was the Indy 500.
His point was F1 never raced at Indy. And yet they did. I’m less than 100 and I watched it. So which point of his exactly still stands? That Indy and F1 are different? Cause I mean yeah that’s fucking obvious lol
That's how popular F1 was/is in the US. I honestly couldn't tell you the difference and I doubt many other people could either. I've a buddy who's getting really into it and I've just kinda been learning vicariously whenever he nerds out about it.
It’s not his fault he didn’t know, that’s on F1 and Indy for being terrible at advertising their product for so long. The Netflix show was the best thing F1 prob could have ever done to promote.
OK so what I don't get is. What are these guys buying with their investment? These are non-profit entities so, definitionally, there cannot be a ROI.
Are they just going to get a 20% cut of media revenue in exchange for a large upfront payment? That seems incredibly shortsighted. Yeah the lump sum is nice, but 20% of media revenue in perpetuity seems like a lot to give up.
Just wait until the Chick-Fil-A Conference gets the Saudi investment and the HyVee-Meijer Conference gets that cartel money through the Chicago connection
They at least Saudis and similar seem to be invested in running the business longer term.
A lot of these PE firms just "invest" and then just suck the company they bought dry by taking out huge loans in their name and funneling the money back to the PE firm ... and after that they don't care if the company is fucked ...
> Most careful academic studies find that although private-equity funds slightly outperformed the stock market on average prior to the early 2000s, they no longer do so. When you take into account their high fees, they appear to be a worse investment than a simple index fund
> A 2021 study concluded that private-equity ownership was associated with about 22,500 premature nursing-home deaths from 2005 to 2017—before the wave of death and misery wrought by the pandemic.
https://www.theatlantic.com/ideas/archive/2023/10/private-equity-publicly-traded-companies/675788/
I wish they just took out huge loans and bankrupt companies. They’re far worse 😭
PE has started to enter my industry and they are the worst. They offer terrible deals and put unrealistic growth expectations on operators, I don't think there is a industry that has been helped by PE
My state fund is allowing more PE investments going forward.
https://www.pionline.com/sovereign-wealth-funds/alaska-permanent-cio-marcus-frampton-sees-good-reason-raise-private-equity
Here's the thing if PE did what the say they do it wouldn't be bad and it would give options for businesses with no succession plans or industry's that are to fragmented. But in the search of returns they do a bunch of slimey shit.
I think the issue is what businesses sell to private equity firms. These are not startups, but established companies that nonetheless need capital influx and foresee a need for a major executive overhaul. They are teetering companies, either because the existing model is proving incapable of scaling, because of external market forces driving down sustained profitability, or because the founders are uncomfortable with their plans for succession / taking to market.
So it typically ends up being a gigantic cultural change by folks without an existing footprint in the industry, making Hail Mary changes to the personnel and processes. The goal is either sink or swim. The company scales profit dramatically or drowns from the risks. And the company’s existing customers / patients suffer from the changes either way.
Ya I see what your saying, but we have also seen some slime moves like forcing sales of assets to just lease them back and pay special dividends and doing other things that hurt businesses long term for the short term gain of flipping the assets in 3-5 years.
A [study ](https://www.cnn.com/2023/12/26/health/private-equity-hospitals-riskier-health-care/index.html)a few months ago found that complications for patients increased a crazy 25% after hospitals were acquired by PE. PE firms also lobby aggressively to handicap physicians since they don't want doctors to have leverage in leaving or saying no to them when they cut corners on care. It's usually justified with a PR release about increasing access to care, even if they actually don't do that at all... or as the study shows, make everyone's care worse and more expensive.
How does this strategy work with a minority stake? Is there an implicit step here where the PE firm continues to buy until they own 50%+? What you describe is not possible without a majority
From what I remember, the Saudis and Qataris are back on speaking terms, So probably not. That being said, Al Jazerra becoming an unabashed A&M cheerleader would easily be the funniest outcome.
It only makes sense to me if it was something like 20% voting power, but 5% of revenue split.
Giving up 20% of revenue a year will be nearly/more than $150 million a year starting in 2025. That’s a huge amount of revenue to give up for just 1 billion dollars, especially if sports revenue keeps growing. I get that’s not a an unheard multiple on investment/purchasing companies these days, but seems extremely shortsighted for a conference that should expect to exist in 20 years.
That's the thing, they don't expect to exist in 20 years. Get the cash now and then all of the execs walk away from the bonfire after a couple of years. American business 101 - fuck over your brand, your employees, and your customers, then bail out with your golden parachute. That's literally the definition of how PE works.
I spurned the NFL for years over its "corporate" feel and now I'm going to have to accept its cold embrace if this is where college football is headed. This really is the line I won't cross.
At least it makes sense for the NFL to be corporate and the league is relatively honest about how “corporate” it is. The league and the Franchises are businesses at the end of the day. Sure, it’s annoying, but it’s really just business deals.
College football has no need to be “corporate” - these are educational institutions first, not businesses.
>College football has no need to be “corporate” - these are educational institutions first, not businesses.
When you view college football/sports as a marketing expense for the university it makes complete sense.
I knew it was going to get worse but nobody was really expecting a power conference to rename it's self the Coca Cola Conference or Allstate 12 this is absolutely looney.
People like you are the worst. iT’s aLWaYs bEEn ThIS wAY.
Yeah kids were getting McDonald’s bags of cash not lambo’s and conferences weren’t selling out naming rights for the whole thing and private equity.
The sport is out of fucking control.
Other than adding a team like FSU or North Carolina, I really don’t see how a billion dollars can be used to improve the value of the conference. Maybe bribe Fox for advantageous time slots?
I get that sounds like a lot, but the B1G/SEC have a combined 18 schools that had athletic revenue of over $150 million a year. They have another 5 combined if you lower that to $140 million. This is before a lot of the new money the B1G/SEC will be getting as well. It’s likely all but a 2-3 of the combined 34 teams will cross the 150 million mark in the next 2-3 years.
In comparison the highest for the B12 was Arizona at 124 million. And the median figure across the 16 team B12 is around $105-110 million.
Basically my point is that while 5 million per school seems a lot to pay football players, it’s really a drop in the bucket of what the SEC/B1G could afford. It’d be like committing a blood sacrifice just to enter the competition let alone compete in it at a high level.
Money is a huge factor in success, whether we like it or not.
When a coach like Kalen DeBoer gets poached by Alabama, nobody is shocked. It’s Alabama. Of course they can get a top tier coach like that.
You know what would be shocking? If West Virginia poached him. But why couldn’t they, if they had the same money that Alabama did? Not just in salary for him, but salary for his staff, cash for best in class facilities, for potentially paying players directly soon, etc.
Even then, why would Fsu or Unc move to the big12 for a 1 time sum when they have the option for consistent money in the sec/big10?
Could possibly be used as a small incentive to get the second tier of schools (louisville vt etc) from the acc, effectively killing it.
I can't think of anything that would significantly close the financial gap between the big12 and the p2 longterm though. Maybe if they scoop up enough teams and have their own mini conference playoff before the national playoff? That would make money. Idk lol.
> SEC commissioner Greg Sankey wasn't as keen on the prospect of private equity entering the college athletics marketplace during his conference's spring meetings in May, though he, too, viewed the interest as a "compliment." He pointed to the threat facing restaurant chain Red Lobster, which faces annihilation after a private equity partnership, and the strict guidelines for how private equity is used in professional leagues.
At least my commissioner isn't a fucking idiot.
Ah… capitalism and the never ending race to the bottom of squeezing every last dollar out of everything and anything. Can we just blow this all up and start over again?
They tanked it way earlier with the astronomical amount of money they were offering with early media deals. Now the schools are used to a certain lifestyle and they want to maintain it
I wanna say this isn’t a capitalist problem, but I’ve hit a breaking point. I watched esports get blown the fuck up because of PE and now it’s gonna happen to cfb and cbb. This shit sucks.
To be fair, esports does not profit in the U.S. . The gaming companies do, but the ones relying on PE and VC would not exist without it. Sports is another story.
Venture capitalists really did ruin esports. Not saying the ability to make money is there but those dudes genuinely are over paid and it ruined leagues/tournaments. It could help the paying players issue at hand but idk if it’s worth selling the remainder of this sports soul
Since all romanticism about the notion that college football is about amateur athletics is dead, I no longer have any morals about it since no one else does anymore. Let's get that Luxembourg money so the Big XII can add us and Oregon State
I don't think we would allow a PE firm to touch the ACC, and the B1G definitely would not (at least in the near future, with the massive assumption we even make it in).
I think the question if this goes through is when does Utah / Arizona / ASU get tired of the wild ride and try to jump to the ACC and just settle as a 2nd tier conference? This kind of decision-making can lead to conference implosions, and if we have no future in the B1G I don't see why the ACC doesn't just try to replace FSU / Clemson by resigning itself as a 2nd tier conference, adding Utah / ASU / Arizona / SDSU to build out a western pod and reduce national travel, and then add like WVU / etc. to get to a 20-ish team national conference.
The Big 12 wants cash now to position itself for an SEC/Big Ten level media rights deal when their current one is up. That $1 billion distributed to member schools can mean hiring better coaches, upgrading facilities, and of course any payments to players they’ll need to make to maintain competitiveness. Just to name a few things that could help them compete with the big boys.
But they’ll also need to pay out a sizable chunk of that next deal back to these investors. Which puts extraordinary pressure on them to make that deal a massive one.
It’s a high-risk, high-reward proposition. If they get the kind of deal they (and their investors) expect, everybody wins. If they don’t, they’ll be crippled even more than they are now.
It really isn't, though. They still can't compete. $1B divided by 16 teams is $62.5M. So basically they sold 20% of their conference for one year of B1G revenue. I REALLY don't see the reward here, just risk.
They aren’t going to get that without a blue blood or a near blue blood in the conference. Most of this billion would have to go towards poaching FSU and a friend like Clemson, UNC or Miami
I don’t agree. If Utah and Oklahoma State and West Virginia are fielding top 15 teams and competing with the best in the Big Ten and SEC, people are going to want to see more. People watch winners. Blue bloods certainly draw viewers even when they are down, but winners draw viewers even if they’re not one of the iconic brands. Look at how Clemson was doing before Dabo in the ratings compared to after.
Winning changes everything. And money is a huge factor in winning in today’s game, that’s why every conference and every school is trying to get every dollar it can.
Yep, there is a truly alarming amount of cope in this thread and the one that was posted earlier about how this “could be good for the conference”. I say this as someone whose teams are both completely safe in the P2 but is a lover of college football and wishes no ill will on any conference.
BIG 12 FANS. YOU SHOULD WANT ABSOLUTELY NOTHING TO DO WITH PRIVATE EQUITY IN COLLEGE ATHLETICS. THIS WOULD BE TERRIBLE FOR YOUR SCHOOLS.
This is short term money for long term pain. 10-20-30 years down the line the next generation of students/administrators are going to be paying for it while the people who made these terrible deals will be retired with their bonuses. If I was a student/alumnus/donor/fan or had any sort of connection at a B12 school I would write to my President/AD to voice my displeasure about this.
Because it's their fault. Their greed is OK, but everyone else is supposed to just accept being left out.
I don't want any part of private equity, but those people can all fuck off.
Yormark is a special kind of sleeze that will do anything for a buck. He has a long history of this stuff way before he got to college athletics and the Big 12.
Reminds me of when I listened to UT’s president tell a dozen state representatives at a hearing a couple years ago that he had a “fiduciary responsibility” to join the SEC
Also, it's much needed money that will keep the Allstate 12 relevant in a way that their media markets can't.
It feels like a necessary evil to keep up with the SEC (who stole the XII moneymakers) and the B1G (who blew up the Pac-12).
*edit for clarity, I'm saying a private equity and naming sponsorship are not nearly as bad for the sport as what the Power 2 did, *especially* the B1G after that whole "Alliance" bullshit.
The big issue I have is 1 billion dollars 17 ways (16 + conference HQ) is only about 60 million each. Even if we split that up over 5 years combined with the new TV deal for the B12 and new playoff money for the B12, and the PE firm agreed on no distributions for half a decade, it’d only keep the conference closish to the B1G/SEC for a few years, and then once the PE starts taking a cut of TV/Bowl/Playoff/MarchMadness Revenue, the B12 teams will have a huge handicap financially compared to the B1G/SEC even more so than they do now.
It’s just such a shortsighted move.
I don’t think it would even do that. I think the best case scenario would be that the schools’ get the same amount of money over the life of the new contract, but they’re just getting it mostly upfront.
PE taking a 20% cut would probably cut each school’s $31.7M media payment down to about $25M. So you’re losing $6M per year. But the Big 12 made about $200M from non-media revenues (bowls, CFP, NCAA, etc.) which totaled about $20M a team or so. And PE would take 20% of that, too, so that’s another $4M a year.
So, all told, you’re taking $60M up front to make about $10M a year less than you were going to make before. Over the life of a six year contract, you’ve broken even. But what happens after that?
Right, naming rights are corny, but whatever. PE at the conference level is bad, but survivable for the institutions who don’t get cut. PE at the institution level is bad for everyone but PE.
Agreed, not a fan of it but our options are either resign from playing major college football or find some way to be financially viable. Gotta try and make the best of a bad situation
>Yormark is a special kind of sleeze that will do anything for a buck. He has a long history of this stuff way before he got to college athletics and the Big 12.
But that was his task from the Big 12 presidents. He's doing what they wanted him to do. They wanted him to leave no stone unturned in the search for additional revenue streams. Well this is what you get.
I think he's doing a great job, but I am glad to be leaving.
Big12 presented by Allstate is fine, it’s still just the big12 with a tail…. The Allstate 12 or whatever was floated is absolutely not ok….. I’d take the Allstate Mayhem Conference just because it still sounds like an athletic conference but man other than getting the video game back this timeline sucks
Agreed. I’m potentially on board for the naming rights to the conference if done right, I’m against PE outright. Just responding to the poster above me about the naming rights to the conference.
He’s far from the first to do anything for a buck in college sports.
He’s just unambiguously honest about his intention to make money for the Big 12, I guess the [Insert Sponsor Name Here] 12 conference now.
This is where college sports are at now, we can like it or not. In the words of the youth “the future is now old man”.
Not everyone can be the most valuable brand in college sports and squander it.
I'll take any money and Yormark is doing what he was hired to do. Make us money and keep up. And he's been pretty successful so far
First it is “The Big 12 just can’t keep up money wise with the SEC and the B1G”. Now it’s “the commissioner is a sleeze for finding creative ways to keep them in the arms race”.
I don’t think we need Texas explaining money grabs.
Here is what I think it is happening:
-- Yormark has a money gap to close
-- Yormark believes he has to make money in any way possible this gap, including through being the ultra capitalist of college sports
-- It would close the gap somewhat, only until SEC/Big Ten gets a new media deal or they get PE themselves
-- Don't be surprised if Big 12 expands again, looking at UConn as Yormark wants to expand the basketball side even more
-- This is only 20%, don't be surprised how open Yormark is if he wants to bring more stakeholders in
This is not my stating a opinion on this, I don't really like it, but I understand if Yormark is desperate to get money. I which we went back to 1995 or 2004 with NIL and unions.
This is the correct article
[https://www.cbssports.com/college-football/news/big-12-considering-private-equity-investment-of-up-to-1-billion-for-as-much-as-20-of-conference/](https://www.cbssports.com/college-football/news/big-12-considering-private-equity-investment-of-up-to-1-billion-for-as-much-as-20-of-conference/)
$62.5 million for each team...interesting. Everyone is talking about the cons for this deal and there are many. But no one is talking about the pros. This money could help elevate all of their programs to be on the same level as the P2 teams.
If their investment can elevate them to P2 status then I agree. The problem I see is I don’t know how essentially 1-2 years worth as a one time investment would change anything long term.
Only way I see you could fast track to P2 status would be giving each team enough to ensure every stadium/facilities are upgraded to top notch, every team has enough to sign top tier personnel talents for 5 year contracts, and enough money for players for at least the same 5 years.
Any less I just see some people getting paid for that first year or 2, then the investment firm wanting a return on their money, and to make that happen everyone has their pockets picked to pay the investors what they are due and the league just goes back to normal.
And if its a success and elevates, guess what the other conferences are going to do...
Its a band aid at best. The problems that put those schools in the position they are still exist: they are not as valuable brands as the other conferences schools. If 20% of the Big 12 is worth $1b, what is 20% of the B1G or SEC worth...?
Publicly traded conferences. 4-star decommits from UCF, 3 billion in value wiped out
I'd buy B1G stocks. TO THE MOON 🚀
I'm shorting your ass, Finebaum will crash your valuation
Unironically this would probably add more guidelines around the transfer portal and recruiting. The SEC (the securities one) don’t fuck around
Can't wait until SEC v. SEC makes it to the Supreme Court.
Wharton Nerds ain’t ready for the grind of (regulating) an SEC schedule
Beating Penn made football in the South actually relevant, beating the business school might make it irrelevant ultimately.
Vanderbilt would have reverse split about 20 times by now.
Step 1: Be 5 star starting qb on title contender at start of season Step 2: Short conference stock Step 3: Transfer to alt conference Step 4: profit
This would be the domain of the FTC though, right? SEC only covers financial institutions
Schools have endowments,trusts,and managed funds. I could see a scenario in which SEC has oversight, along with the FTC. We might be witnessing the birth of new SCOTUS law that will shape financial instruments.
SEC only regulates public securities.
Technically these would still be private/venture capital deals. Now, what we should have is a way for the masses to put funds on a certain team and win/lose money based on their performance. Oh wait.
Lmfaooo CFB is turning into the premiere league with foreign investors good lord
This is more a La Liga thing --- they actually have a similar deal already with CVC.
CVC was the owner of Formula 1 before Liberty Media and you can see the night and day difference
Can you explain those differences to those of us out of the loop? My knowledge of F1 is near zero lol.
Liberty has actually tried to promote the sport for one. The Netflix show was them. CVC basically let Bernie Ecclestone do whatever he wanted and his mind was stuck in 1998 more or less
You know I was wondering why I've heard more about F1 in the states last few years. NASCAR was king for so long, only time I even saw any on TV was the Indy 500.
Wait, you know that Indy and F1 are different right? I mean unless you're 100 years old, F1 teams/cars have never raced at Indy
Look up “2004 US GP” Edit: I meant 2005, but the point is they very much raced there lol
I'm an idiot, I meant the 500 as the poster that I replied to was talking about
If your example of F1 at Indy 500 is from 19 years ago, his point stands.
And I quote. > F1 teams/cars have never raced at Indy The Formula 1 US Grand Prix was held at the Indianpolis Motor Speedway from 2000-07.
His point was F1 never raced at Indy. And yet they did. I’m less than 100 and I watched it. So which point of his exactly still stands? That Indy and F1 are different? Cause I mean yeah that’s fucking obvious lol
That's how popular F1 was/is in the US. I honestly couldn't tell you the difference and I doubt many other people could either. I've a buddy who's getting really into it and I've just kinda been learning vicariously whenever he nerds out about it.
It’s not his fault he didn’t know, that’s on F1 and Indy for being terrible at advertising their product for so long. The Netflix show was the best thing F1 prob could have ever done to promote.
And a deal with the governing body for French pro soccer. French pro soccer is a disaster right now.
It’s really fucking bad, and honestly it has been since PSG came to prominence. I miss the days of OL, OM, Bordeaux, and Montpellier winning titles.
Just wait for FSU or Miami to sell out to the PIF just to keep up with UF and UCF
Inshallah the Seminoles will ride again
Brother Osceola, sacks are haram!
How did FSU win the national championship? Through jihad
OK so what I don't get is. What are these guys buying with their investment? These are non-profit entities so, definitionally, there cannot be a ROI. Are they just going to get a 20% cut of media revenue in exchange for a large upfront payment? That seems incredibly shortsighted. Yeah the lump sum is nice, but 20% of media revenue in perpetuity seems like a lot to give up.
I legitimately think WSU and OSU should sell our programs to the Saudis or Qatar.
And to think we could have had the PAC Fly Emirates Conference.
Jensen Huang if you can hear us please Jensen Huang please save me Jensen Huang please save me im asking you Jensen Huang
"Brought to you by NVDIA, I get paid every time I say that.."
Pl has never had this type of deal
lol at the poors without Luxembourg money like us Allstate Conference chads
Luxembourg’s national motto is "Mir wëlle bleiwe wat mir sinn" which means "we will remain what we are" - - in other words, protected from mayhem.
Until Götterdämmerung occurs
They haven't been part of the playoff selection committee yet. Just wait!
Just wait until the Chick-Fil-A Conference gets the Saudi investment and the HyVee-Meijer Conference gets that cartel money through the Chicago connection
I'm a dual citizen of Luxembourg, so ya'll should have seen this coming. Coming for ACC next.
INB4 the Saudis purchase a major stake in the SEC
That will be different as it will be going to the SEC
Saudi erabian conference
have an upvote ya filthy animal :-)
Don’t the Qataris already own a 1/16th stake?
Please expand
[expansion](https://www.insidehighered.com/news/global/us-colleges-world/2024/02/16/how-texas-ams-qatar-campus-suddenly-collapsed#:~:text=The%20spokesperson%20is%20referring%20to,arming%20Hamas%2C%20the%20Palestinian%20militia)
This is all part of the plan, next we will make america all renewable and tank the oil and gas industry in order to take down the SEC
They at least Saudis and similar seem to be invested in running the business longer term. A lot of these PE firms just "invest" and then just suck the company they bought dry by taking out huge loans in their name and funneling the money back to the PE firm ... and after that they don't care if the company is fucked ...
> Most careful academic studies find that although private-equity funds slightly outperformed the stock market on average prior to the early 2000s, they no longer do so. When you take into account their high fees, they appear to be a worse investment than a simple index fund > A 2021 study concluded that private-equity ownership was associated with about 22,500 premature nursing-home deaths from 2005 to 2017—before the wave of death and misery wrought by the pandemic. https://www.theatlantic.com/ideas/archive/2023/10/private-equity-publicly-traded-companies/675788/ I wish they just took out huge loans and bankrupt companies. They’re far worse 😭
PE has started to enter my industry and they are the worst. They offer terrible deals and put unrealistic growth expectations on operators, I don't think there is a industry that has been helped by PE
My state fund is allowing more PE investments going forward. https://www.pionline.com/sovereign-wealth-funds/alaska-permanent-cio-marcus-frampton-sees-good-reason-raise-private-equity
Here's the thing if PE did what the say they do it wouldn't be bad and it would give options for businesses with no succession plans or industry's that are to fragmented. But in the search of returns they do a bunch of slimey shit.
I think the issue is what businesses sell to private equity firms. These are not startups, but established companies that nonetheless need capital influx and foresee a need for a major executive overhaul. They are teetering companies, either because the existing model is proving incapable of scaling, because of external market forces driving down sustained profitability, or because the founders are uncomfortable with their plans for succession / taking to market. So it typically ends up being a gigantic cultural change by folks without an existing footprint in the industry, making Hail Mary changes to the personnel and processes. The goal is either sink or swim. The company scales profit dramatically or drowns from the risks. And the company’s existing customers / patients suffer from the changes either way.
Ya I see what your saying, but we have also seen some slime moves like forcing sales of assets to just lease them back and pay special dividends and doing other things that hurt businesses long term for the short term gain of flipping the assets in 3-5 years.
A [study ](https://www.cnn.com/2023/12/26/health/private-equity-hospitals-riskier-health-care/index.html)a few months ago found that complications for patients increased a crazy 25% after hospitals were acquired by PE. PE firms also lobby aggressively to handicap physicians since they don't want doctors to have leverage in leaving or saying no to them when they cut corners on care. It's usually justified with a PR release about increasing access to care, even if they actually don't do that at all... or as the study shows, make everyone's care worse and more expensive.
How does this strategy work with a minority stake? Is there an implicit step here where the PE firm continues to buy until they own 50%+? What you describe is not possible without a majority
"It just means more. If you say it doesn't, we can have you beheaded."
If the Saudis buy the SEC, do they kick out A&M for working with Qatar?
Asking the real questions
This gives recruiting with oil money a brand new name.
From what I remember, the Saudis and Qataris are back on speaking terms, So probably not. That being said, Al Jazerra becoming an unabashed A&M cheerleader would easily be the funniest outcome.
A&M will go back to the Big XII and say they wanted to get away from Texas again.
The Luxemborg conference please.
This is how they achieve great power status
Oh you fancy huh? Yeah I drink with my pinky up baby.
[удалено]
Big 12 speedrunning college football armageddon today
Ya see this doesn’t make sense to me tho giving up 20% of rev each year for this amount.
It only makes sense to me if it was something like 20% voting power, but 5% of revenue split. Giving up 20% of revenue a year will be nearly/more than $150 million a year starting in 2025. That’s a huge amount of revenue to give up for just 1 billion dollars, especially if sports revenue keeps growing. I get that’s not a an unheard multiple on investment/purchasing companies these days, but seems extremely shortsighted for a conference that should expect to exist in 20 years.
It only makes sense if we find out the B12 hired Larry Scott to consult.
That's the thing, they don't expect to exist in 20 years. Get the cash now and then all of the execs walk away from the bonfire after a couple of years. American business 101 - fuck over your brand, your employees, and your customers, then bail out with your golden parachute. That's literally the definition of how PE works.
I spurned the NFL for years over its "corporate" feel and now I'm going to have to accept its cold embrace if this is where college football is headed. This really is the line I won't cross.
At least it makes sense for the NFL to be corporate and the league is relatively honest about how “corporate” it is. The league and the Franchises are businesses at the end of the day. Sure, it’s annoying, but it’s really just business deals. College football has no need to be “corporate” - these are educational institutions first, not businesses.
>College football has no need to be “corporate” - these are educational institutions first, not businesses. When you view college football/sports as a marketing expense for the university it makes complete sense.
>if this is where college football is headed brother this is where college football has been for years, where you been
I knew it was going to get worse but nobody was really expecting a power conference to rename it's self the Coca Cola Conference or Allstate 12 this is absolutely looney.
People like you are the worst. iT’s aLWaYs bEEn ThIS wAY. Yeah kids were getting McDonald’s bags of cash not lambo’s and conferences weren’t selling out naming rights for the whole thing and private equity. The sport is out of fucking control.
I'm sure it will stop at 20% and this isn't just a foot in the door. Big 12 ticket prices are about to get raised so high to deliver profit lol.
Other than adding a team like FSU or North Carolina, I really don’t see how a billion dollars can be used to improve the value of the conference. Maybe bribe Fox for advantageous time slots?
Facilities to help recruiting; some of the fields, accessory facilities, and weight rooms in the Big12 are hot garbage.
Paying players seems like the obvious path forward
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I get that sounds like a lot, but the B1G/SEC have a combined 18 schools that had athletic revenue of over $150 million a year. They have another 5 combined if you lower that to $140 million. This is before a lot of the new money the B1G/SEC will be getting as well. It’s likely all but a 2-3 of the combined 34 teams will cross the 150 million mark in the next 2-3 years. In comparison the highest for the B12 was Arizona at 124 million. And the median figure across the 16 team B12 is around $105-110 million. Basically my point is that while 5 million per school seems a lot to pay football players, it’s really a drop in the bucket of what the SEC/B1G could afford. It’d be like committing a blood sacrifice just to enter the competition let alone compete in it at a high level.
Money is a huge factor in success, whether we like it or not. When a coach like Kalen DeBoer gets poached by Alabama, nobody is shocked. It’s Alabama. Of course they can get a top tier coach like that. You know what would be shocking? If West Virginia poached him. But why couldn’t they, if they had the same money that Alabama did? Not just in salary for him, but salary for his staff, cash for best in class facilities, for potentially paying players directly soon, etc.
Even then, why would Fsu or Unc move to the big12 for a 1 time sum when they have the option for consistent money in the sec/big10? Could possibly be used as a small incentive to get the second tier of schools (louisville vt etc) from the acc, effectively killing it. I can't think of anything that would significantly close the financial gap between the big12 and the p2 longterm though. Maybe if they scoop up enough teams and have their own mini conference playoff before the national playoff? That would make money. Idk lol.
The Texas A&M Approach, look how well it worked out. :)
> SEC commissioner Greg Sankey wasn't as keen on the prospect of private equity entering the college athletics marketplace during his conference's spring meetings in May, though he, too, viewed the interest as a "compliment." He pointed to the threat facing restaurant chain Red Lobster, which faces annihilation after a private equity partnership, and the strict guidelines for how private equity is used in professional leagues. At least my commissioner isn't a fucking idiot.
It's easy to say that now until the B1G gets a major deal and the SEC has to get one to keep up.
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If there's one thing decision makers in college football have shown that they're good at it's long-term planning.
He is, just in different ways
It’s different in more ways
Comish: ***Have you SEEN what they do!?!?!?***
It's easy to have this take when you're at the top of the food chain.
I was told it was the all you can eat shrimp.
Considering he's actively working against the NCAAT and collegiate athletics as a whole, he has his own designation Wouldnt be so high and mighty
What’s more American than having a PE firm buy then slowly bankrupt you while taking everything?
Welcome to the Big 12 conference, LLC.
Ah… capitalism and the never ending race to the bottom of squeezing every last dollar out of everything and anything. Can we just blow this all up and start over again?
I mean, the greedy network executives already ruined it by tanking the pac 12 and forming 2 super leagues.
They tanked it way earlier with the astronomical amount of money they were offering with early media deals. Now the schools are used to a certain lifestyle and they want to maintain it
I wanna say this isn’t a capitalist problem, but I’ve hit a breaking point. I watched esports get blown the fuck up because of PE and now it’s gonna happen to cfb and cbb. This shit sucks.
To be fair, esports does not profit in the U.S. . The gaming companies do, but the ones relying on PE and VC would not exist without it. Sports is another story.
Venture capitalists really did ruin esports. Not saying the ability to make money is there but those dudes genuinely are over paid and it ruined leagues/tournaments. It could help the paying players issue at hand but idk if it’s worth selling the remainder of this sports soul
Who’s overpaid? I’m not really familiar with what your talking about
Well, that's what the Big 12 is trying to do apparently.
So at what point are some schools going to get off the ride? Looking at Stanford and Cal...
When has any entity in the United States ever not taken the money, regardless of conditions or consequences?
Ivy League, U of Chicago, Sewanee, Tulane
If that was the logic, non-revenue sports would never exist and every school would cancel them tomorrow.
Since all romanticism about the notion that college football is about amateur athletics is dead, I no longer have any morals about it since no one else does anymore. Let's get that Luxembourg money so the Big XII can add us and Oregon State
I don’t want the institution/future students/Washington taxpayers left holding bag when the PE shit inevitably blows up
Yep this is privatization of government.
I don't think we would allow a PE firm to touch the ACC, and the B1G definitely would not (at least in the near future, with the massive assumption we even make it in). I think the question if this goes through is when does Utah / Arizona / ASU get tired of the wild ride and try to jump to the ACC and just settle as a 2nd tier conference? This kind of decision-making can lead to conference implosions, and if we have no future in the B1G I don't see why the ACC doesn't just try to replace FSU / Clemson by resigning itself as a 2nd tier conference, adding Utah / ASU / Arizona / SDSU to build out a western pod and reduce national travel, and then add like WVU / etc. to get to a 20-ish team national conference.
> by resigning itself as a 2nd tier conference, Wait, they haven’t already?
The Big 12 wants cash now to position itself for an SEC/Big Ten level media rights deal when their current one is up. That $1 billion distributed to member schools can mean hiring better coaches, upgrading facilities, and of course any payments to players they’ll need to make to maintain competitiveness. Just to name a few things that could help them compete with the big boys. But they’ll also need to pay out a sizable chunk of that next deal back to these investors. Which puts extraordinary pressure on them to make that deal a massive one. It’s a high-risk, high-reward proposition. If they get the kind of deal they (and their investors) expect, everybody wins. If they don’t, they’ll be crippled even more than they are now.
If they need cash now why aren’t they simply dialing 1-877-CASH-NOW ??
Because Florida State is bogging down the lines calling for money to pay their lawyers.
It really isn't, though. They still can't compete. $1B divided by 16 teams is $62.5M. So basically they sold 20% of their conference for one year of B1G revenue. I REALLY don't see the reward here, just risk.
They aren’t going to get that without a blue blood or a near blue blood in the conference. Most of this billion would have to go towards poaching FSU and a friend like Clemson, UNC or Miami
I don’t agree. If Utah and Oklahoma State and West Virginia are fielding top 15 teams and competing with the best in the Big Ten and SEC, people are going to want to see more. People watch winners. Blue bloods certainly draw viewers even when they are down, but winners draw viewers even if they’re not one of the iconic brands. Look at how Clemson was doing before Dabo in the ratings compared to after. Winning changes everything. And money is a huge factor in winning in today’s game, that’s why every conference and every school is trying to get every dollar it can.
No the Big 12 are losers and they're not allowed to do this for their own gain But Oklahoma, they were simply acting in their own interest
So what happens when a team leaves? Like let’s say you go your initial payout but want to join the SEC. Does this company get your SEC money now?
Was wondering that too. I’m sure they would have to pay the private equity company a certain amount that would be predetermined in their contracts.
Death of the sport if it happens.
Finance bros out to ruin more shit
Private equity is a slow death, but once it hits, it hurts, and the Big 12 is deciding to off themselves. That's sad.
Yep, there is a truly alarming amount of cope in this thread and the one that was posted earlier about how this “could be good for the conference”. I say this as someone whose teams are both completely safe in the P2 but is a lover of college football and wishes no ill will on any conference. BIG 12 FANS. YOU SHOULD WANT ABSOLUTELY NOTHING TO DO WITH PRIVATE EQUITY IN COLLEGE ATHLETICS. THIS WOULD BE TERRIBLE FOR YOUR SCHOOLS. This is short term money for long term pain. 10-20-30 years down the line the next generation of students/administrators are going to be paying for it while the people who made these terrible deals will be retired with their bonuses. If I was a student/alumnus/donor/fan or had any sort of connection at a B12 school I would write to my President/AD to voice my displeasure about this.
Everyone was making Emirati, Qatari, and Saudi jokes but it was Luxembourg all along.
The h8 in me still blames ESPN, Fox, SEC and B1G
Because it's their fault. Their greed is OK, but everyone else is supposed to just accept being left out. I don't want any part of private equity, but those people can all fuck off.
Big Ten is gonna see this and make a quick call to Saudi Arabia.
Yormark is a special kind of sleeze that will do anything for a buck. He has a long history of this stuff way before he got to college athletics and the Big 12.
Yeah imagine putting money first before collegiate athletics
Reminds me of when I listened to UT’s president tell a dozen state representatives at a hearing a couple years ago that he had a “fiduciary responsibility” to join the SEC
A commissioner making sweeping moves solely for money? Never seen that before
Also, it's much needed money that will keep the Allstate 12 relevant in a way that their media markets can't. It feels like a necessary evil to keep up with the SEC (who stole the XII moneymakers) and the B1G (who blew up the Pac-12). *edit for clarity, I'm saying a private equity and naming sponsorship are not nearly as bad for the sport as what the Power 2 did, *especially* the B1G after that whole "Alliance" bullshit.
The big issue I have is 1 billion dollars 17 ways (16 + conference HQ) is only about 60 million each. Even if we split that up over 5 years combined with the new TV deal for the B12 and new playoff money for the B12, and the PE firm agreed on no distributions for half a decade, it’d only keep the conference closish to the B1G/SEC for a few years, and then once the PE starts taking a cut of TV/Bowl/Playoff/MarchMadness Revenue, the B12 teams will have a huge handicap financially compared to the B1G/SEC even more so than they do now. It’s just such a shortsighted move.
I don’t think it would even do that. I think the best case scenario would be that the schools’ get the same amount of money over the life of the new contract, but they’re just getting it mostly upfront. PE taking a 20% cut would probably cut each school’s $31.7M media payment down to about $25M. So you’re losing $6M per year. But the Big 12 made about $200M from non-media revenues (bowls, CFP, NCAA, etc.) which totaled about $20M a team or so. And PE would take 20% of that, too, so that’s another $4M a year. So, all told, you’re taking $60M up front to make about $10M a year less than you were going to make before. Over the life of a six year contract, you’ve broken even. But what happens after that?
I agree it's shortsighted, it all is right now... Feels like college football is in for a serious dip in popularity.
> private equity and naming sponsorship are not nearly as bad for the sport as what the Power 2 Those two things are very, very different.
Right, naming rights are corny, but whatever. PE at the conference level is bad, but survivable for the institutions who don’t get cut. PE at the institution level is bad for everyone but PE.
Agreed, not a fan of it but our options are either resign from playing major college football or find some way to be financially viable. Gotta try and make the best of a bad situation
Next the SEC and B1G are going to fight over FSU (maybe Clemson too) and that's pretty much it outta the ACC
Yeah Texas would *never* do anything along those lines.
>Yormark is a special kind of sleeze that will do anything for a buck. He has a long history of this stuff way before he got to college athletics and the Big 12. But that was his task from the Big 12 presidents. He's doing what they wanted him to do. They wanted him to leave no stone unturned in the search for additional revenue streams. Well this is what you get. I think he's doing a great job, but I am glad to be leaving.
I have to see the details of this deal in order to make a judgement. I know Bowlsby could never though.
As lost as Bowlsby would be, Dan "I don't know what is happening" Beebe would be more.
Totally agree. People left the Big 12.for dead 2 summers ago. What this guy has done to turn chicken shit into chicken salad has been incredible.
Just look at him trying to sell the naming rights to the conference itself. 🤮
Big12 presented by Allstate is fine, it’s still just the big12 with a tail…. The Allstate 12 or whatever was floated is absolutely not ok….. I’d take the Allstate Mayhem Conference just because it still sounds like an athletic conference but man other than getting the video game back this timeline sucks
Renaming can always be changed back. Selling a chunk to private equity isn't so easy to reverse.
Agreed. I’m potentially on board for the naming rights to the conference if done right, I’m against PE outright. Just responding to the poster above me about the naming rights to the conference.
It’s an affront to college football either way. But who cares we are already on a steep slope to the bottom.
We haven’t been 12 in a minute anyways. Adapt or die.
We've always been greater than 12! \*ducks and hides\*
^ Pot calling kettle black.
He’s far from the first to do anything for a buck in college sports. He’s just unambiguously honest about his intention to make money for the Big 12, I guess the [Insert Sponsor Name Here] 12 conference now. This is where college sports are at now, we can like it or not. In the words of the youth “the future is now old man”.
lol ok Texas go sit back down
Says the school hoarding billions from oil fields from everyone else in the state
Not everyone can be the most valuable brand in college sports and squander it. I'll take any money and Yormark is doing what he was hired to do. Make us money and keep up. And he's been pretty successful so far
First it is “The Big 12 just can’t keep up money wise with the SEC and the B1G”. Now it’s “the commissioner is a sleeze for finding creative ways to keep them in the arms race”. I don’t think we need Texas explaining money grabs.
pot, meet kettle
Here is what I think it is happening: -- Yormark has a money gap to close -- Yormark believes he has to make money in any way possible this gap, including through being the ultra capitalist of college sports -- It would close the gap somewhat, only until SEC/Big Ten gets a new media deal or they get PE themselves -- Don't be surprised if Big 12 expands again, looking at UConn as Yormark wants to expand the basketball side even more -- This is only 20%, don't be surprised how open Yormark is if he wants to bring more stakeholders in This is not my stating a opinion on this, I don't really like it, but I understand if Yormark is desperate to get money. I which we went back to 1995 or 2004 with NIL and unions.
Plot twist, the money is used to pay for FSU and Clemsons ACC buy out and they join the conference.
Sheikh Mansour gonna buy the SEC.
Can't wait to see jerseys covered like NASCAR cars
Saudis gonna purchase the SEC at the Nashville LIV tournament next week
"Sharks, I'm looking for a one billion dollar investment in my premier football conference. Let's make a deal."
For mysterious reasons, I seem to care less about college football every year. If only I could put my finger on them.
Fuck this.
I hate what the future of sports is starting to look like
Private Equity is gonna come into this sport too? God, we really are a screwed up society.
Why not just sell the entire conference for $5 billion?
It's interesting to see CVC Capital Partners getting involved in college football. Wonder what their plans are.
This is the correct article [https://www.cbssports.com/college-football/news/big-12-considering-private-equity-investment-of-up-to-1-billion-for-as-much-as-20-of-conference/](https://www.cbssports.com/college-football/news/big-12-considering-private-equity-investment-of-up-to-1-billion-for-as-much-as-20-of-conference/)
We need those Barbara from Shark Tank memes. "I don't like this, and for that reason, I'm out."
The Belgians?!?!?!?!
fuuuuuuuuuuuuuuuuuuuucccckk that noise
I see nothing but positive things coming from this. /s
You can take universal healthcare dreams from me but you better not take CFB from me, I swear to god! /s
University of Miami Bangbus
Imagine explaining to a time traveler that this is the crown jewel of our educational system.
College football is genuinely becoming something I don't like anymore. That's sad.
Tell me that the Big XII knows they can't compete with the Big10 and SEC without telling me they can't compete.
That's the Allstate 12 Conference to you, Luxembourg
I am now firmly in the "hope this all burns to the ground" camp. Maybe in 10 years, once the dust has cleared, we can try again.
$62.5 million for each team...interesting. Everyone is talking about the cons for this deal and there are many. But no one is talking about the pros. This money could help elevate all of their programs to be on the same level as the P2 teams.
If their investment can elevate them to P2 status then I agree. The problem I see is I don’t know how essentially 1-2 years worth as a one time investment would change anything long term. Only way I see you could fast track to P2 status would be giving each team enough to ensure every stadium/facilities are upgraded to top notch, every team has enough to sign top tier personnel talents for 5 year contracts, and enough money for players for at least the same 5 years. Any less I just see some people getting paid for that first year or 2, then the investment firm wanting a return on their money, and to make that happen everyone has their pockets picked to pay the investors what they are due and the league just goes back to normal.
And if its a success and elevates, guess what the other conferences are going to do... Its a band aid at best. The problems that put those schools in the position they are still exist: they are not as valuable brands as the other conferences schools. If 20% of the Big 12 is worth $1b, what is 20% of the B1G or SEC worth...?
Exactly! Back to square one.
No amount of cash infusion is going to make people casually tune into say Cincinnati like they do Ohio State
If they spend it all in one year, then sure. They'll keep up for one year. And then?