B1G soliciting preliminary bids from private equity firms

[WindyCityGopher]

I don't see this ending well at all. Once open, that's a door the university presidents will never be able to close.

 

[A_Slab_of_Bacon]

This is dumb.

They have a very profitable business.

PE is there to extract the profits FROM them ...

What value could a PE organization provide that B1G couldn't get on their own without giving up equity in their own organization?

Meanwhile the B1G and schools at least intend to take a long view of the future, while PE organizations have proven to be happy to extract as much values as they can and then WALK / leave an business in the dirt having turned a profit for themselves.

 

[WindyCityGopher]

This is dumb.

They have a very profitable business.

PE is there to extract the profits FROM them ...

What value could a PE organization provide that B1G couldn't get on their own without giving up equity in their own organization?

Meanwhile the B1G and schools at least intend to take a long view of the future, while PE organizations have proven to be happy to extract as much values as they can and then WALK / leave an business in the dirt having turned a profit for themselves.

The ONLY factors I can think of is hedging against Trump eliminating federal funding of grants (and having it stick the next time he tries it), his threatening to attack endowments, and an increasing number of state legislatures becoming hostile to higher ed, and reducing funding accordingly. Otherwise, why would you willingly provide a host body for PE to attach to and bleed dry?

 

[Panthadad2]

The advantage of selling to a PE firm is receiving a shit ton pot of money today in exchange for the future's uncertain profits. If the business model stays extremely profitable in the future, then everyone criticizes what a poor decision the sale of future profits was. If everything crashes in the future, everyone applauds the move.

Personally, I'd rather the Universities have an ongoing vested interest in managing the business as it goes. I don't trust the committees and politics involved to do the optimal thing with that shit ton pot of money.

 

[Word]

The advantage of selling to a PE firm is receiving a shit ton pot of money today in exchange for the future's uncertain profits. If the business model stays extremely profitable in the future, then everyone criticizes what a poor decision the sale of future profits was. If everything crashes in the future, everyone applauds the move.

Personally, I'd rather the Universities have an ongoing vested interest in managing the business as it goes. I don't trust the committees and politics involved to do the optimal thing with that shit ton pot of money.

I feel like every story I read about PE firms is how they take a once beloved company and run it into the ground in the name of profits until it goes out of business.

 

[watertown 1987 guy n]

A money grab. The complete financialization of college sports. Seems like another great opportunity for the top 0.1% to increase their wealth, and w their tax rates to decline there should be more trickle down for the rest of us.

 

[A_Slab_of_Bacon]

The advantage of selling to a PE firm is receiving a shit ton pot of money today in exchange for the future's uncertain profits. If the business model stays extremely profitable in the future, then everyone criticizes what a poor decision the sale of future profits was. If everything crashes in the future, everyone applauds the move.

Personally, I'd rather the Universities have an ongoing vested interest in managing the business as it goes. I don't trust the committees and politics involved to do the optimal thing with that shit ton pot of money.

If you want a lump of money, B1G could just get a loan ... they got a lot incoming.

PE at least usually pretends to add some value. But what value could they provide that B1G couldn't just go out and buy? I can't imagine.