B1G soliciting preliminary bids from private equity firms

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WindyCityGopher

WindyCityGopher

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

 

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.
 
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A_Slab_of_Bacon said:
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.
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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?
 

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.
 

Panthadad2 said:
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.
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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.
 


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.
 

Panthadad2 said:
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.
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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.
 

watertown 1987 guy n said:
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.
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Can't you keep politics to the Off-topic board.

Thanks in advance.
 

GopherTheJugular said:
Can't you keep politics to the Off-topic board.

Thanks in advance.
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This is starting to become a losing battle here. Most of these posters are now completely ignored by others in person or on other information mediums so they have to put it on here so someone will read their uninformed drivel, albeit accidentally.
 



Word said:
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.
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They’ll charge you a $19.99 per month subscription to use the bathroom at the stadium.

You can only cancel it by phone and it runs through the offseason.
 

My clients sell to PE as an exit plan. Do the universities intend to exit athletics? I've suggested in the past that the schools drop the pretext of academics in athletics (at least revenue sports) and license name, mascot and tradition to entities who operate the revenue athletics, pay players, etc. It's not what I want but we're not going back to the old days. Maybe PE is a step in that direction.

PE could also be a means to growth but it's not like B1G would use the investment to build more locations or expand operations. Does the B1G think that it could sell an investment in its athletics, manage growth and income on the cash received to greater returns than the revenue being received from athletics, and any retained revenue will likewise grow? I wouldn't trust university leaders who think they are coming out ahead in a transaction with savvy investors.
 





To better support its 18 member institutions, the conference is evaluating potential strategic partnerships in order to enhance the conference’s event, sponsorship and other ancillary business endeavors,” a Big Ten spokesperson told Sportico in an email, while declining to provide additional details.
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Can’t think of a scenario where this makes sense, at least in terms of supporting the schools. Have to think the school presidents put the kibosh on this immediately. I’d argue Petiitti even going to lunch with PE is grounds for termination - acting against the interest of the schools, the students, the taxpayers. The idea the conference needs money or “expertise” from these firms is a fireable offense. Pettiti is angling for a big payday, plain and simple.

PE firms bring no long term value except to general partners, maybe limited partners at times but the business entity, employees, customers are going to get reamed. They expect big returns on their investment, ie hollowed out revenue for everyone else. An absolutely idiotic idea for any school to even consider.
 

watertown 1987 guy n said:
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.
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If PE happens, I hope college sports go completely in the trash unless players are declared employees and get collective bargaining.

GopherTheJugular said:
Can't you keep politics to the Off-topic board.

Thanks in advance.
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It's sad that screwing over the poor/those without power(ie college athletes) is something that you consider "political".
 

GopherTheJugular said:
Can't you keep politics to the Off-topic board.

Thanks in advance.
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As big money has infiltrated all aspects of society (and now college athletic), judicial decisions are affecting the game more today today and to my point the financialization of college sports which invariably bring into play other macro issues like tax policy, social issues, and political policy. This in my view is a very relevant topic for the board. I would love it if these issues weren’t a part of the game today. Politics is now infiltrating every part of our lives more significantly unless a person chooses to ignore it. If college sports becomes a part of Hedge Funds asset, I guarantee it will become a larger Washington DC issue w the associated big money - and who invariably will be the winners? Not the fans. I can’t even contemplate the ramifications to little guy like me that can’t afford to go to a Vikings game. What is to say college football for the top 30 teams would be / has to be different with HFunds running the biz. Trickle down! - it will be sold as inevitable and possibly great for the game but Avg Joe will not be a winner.
 

Wild guess at what is going on:

the thinking is for the Big Ten to become an investment firm/holding company or something like that, and the PE provide the initial capital to get that off the ground.

They take some of the profit of course, but then the Big Ten splits the rest of the profits off their various investments among the schools.


Is it really so different than the clearly for-profit TV deals? Than creating the Big Ten Network? It's just branching out to different kinds of investments.


Other bit of it is: if the Big Ten doesn't do it ... the SEC will do it.


TV money has taken us from $20M, to $50M, to $80M if not shortly $100M checks each year from the conference. This is how you get to the $200M range. At least that's the idea.
 

Someone basically said this already, but maybe the schools offload varsity athletics completely? Just have club? The Big Ten takes it over completely. Coaches, players, staff, etc. are employees of the Big Ten? Or perhaps a franchise model with separate owners of teams that are affiliated with each school?

Players employed by the conference would get around any Title IX nonsense.


By rule players would be required to also be students at the school, and so on.
 


Wally said:
It's sad that screwing over the poor/those without power(ie college athletes) is something that you consider "political".
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That wasn't the part I was considering political, it was the snarky remark about the top 0.1% getting a tax break. Do you really think that comment is relevant to this thread?????????
 

watertown 1987 guy n said:
As big money has infiltrated all aspects of society (and now college athletic), judicial decisions are affecting the game more today today and to my point the financialization of college sports which invariably bring into play other macro issues like tax policy, social issues, and political policy. This in my view is a very relevant topic for the board. I would love it if these issues weren’t a part of the game today. Politics is now infiltrating every part of our lives more significantly unless a person chooses to ignore it. If college sports becomes a part of Hedge Funds asset, I guarantee it will become a larger Washington DC issue w the associated big money - and who invariably will be the winners? Not the fans. I can’t even contemplate the ramifications to little guy like me that can’t afford to go to a Vikings game. What is to say college football for the top 30 teams would be / has to be different with HFunds running the biz. Trickle down! - it will be sold as inevitable and possibly great for the game but Avg Joe will not be a winner.
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Thanks for a decent response. When I replied to you before I was just concerned about the tax break comment. I didn't think that was relevant and it felt like you were just taking a cheap shot.

I think the off-topic board was a great idea for Gopherhole. I remember reading on here before it was created and I'm glad all the political stuff is mostly congregated there now so people just interested in football don't have to see it.

That being said, I agree with the thoughts on here. Like someone said, they'll do nothing with a long term outlook and that usually hurts everyone but them.
 

With the portal and NIL and everything else I figured we would always adapt and overcome and things will change, but at the end of the day it will still be college football on Saturdays and those 12 or 13 weekends are the best of the year. If the Big Ten starts jacking around with PE stuff to me that might be the beginning of the end. It’s shortsighted and counterproductive and just plain dumb.
 

Anyone hiring an investment bank to try to sell their football league is going to get setup by that investment bank to make a life changing amount of money in the exit.

This isn’t the B1G hedging, it’s a small group of people trying to make themselves rich. Fire them and anyone connected to them and then fire the bank.
 

Nope. Doesn't make any sense. The product sells itself. Why bring private equity in to siphon off a bunch of that money?
 

This sounds like a bad way for a conference to bail out Ohio State for losing 48 million dollars in 2024.
 

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