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TruthSeeker

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Do you guys like the idea of the new Big Ten business entity?
 

No clue what you're referencing. Any context? Links?

Go Gophers!!
 



PE Firms don't care about winning the Axe or Pig, they care about making money. If this allows us a massive renovation of The Barn to drive new revenue streams, OK, let's talk, but if PE firms are just driving up coaches salaries and QB pay, then no thanks.

But once this line is crossed, we enter yet another brand new territory of "college" athletics.

Go Gophers!!
 




A_Slab_of_Bacon said:
I don't see PE providing anything the B1G couldn't do for itself.
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This^

Somebody (or somebodies) at the big ten office is/are being paid, and the school presidents are for certain being fed a load of BS. They add nothing, will divert future conference revenue to their partners (undoubtedly including big ten co-investors pushing this likely including the current head) rather than revenue being shared across the schools and athletes.

This smells.



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Sounds like Michigan and Ohio St want it.

Probably will happen.
 


Mr. 131 said:
Some context would help.
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The Big Ten is considering selling a 1/20th share of future earnings to a Private Capital firm for 2 billion dollars. The schools would receive an immediate infusion of around 100 million each.
 


Ope3 said:
Sounds like Michigan and Ohio St want it.

Probably will happen.
Click to expand...
Did I misread the article? It read to me like Michigan and Ohio St are the only ones still mulling it over, while the rest of the league is for it.
 

This is like taking out a 2nd mortgage to pay off credit cards. Not great.
 

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LeftofThaDial said:
The Big Ten is considering selling a 1/20th share of future earnings to a Private Capital firm for 2 billion dollars. The schools would receive an immediate infusion of around 100 million each.
Click to expand...

To avoid making any hard decisions now. The schools have a huge spending problem, not a revenue problem. Better to make tough decisions to enable revenue sharing for athletes: freeze salaries, pay cuts in some cases (*cough* for example Mr. Coyle) than kick the can… The bar is closed, Mr. Coyle you’re cut off.

Their example of bringing in guys that can arrange mass sponsorships, ok but they can’t do that right now? Why do they need these guys?
 



The actual pitch to the destitute big ten leadership has been leaked. Word is it’s been warmly received.




 

LeftofThaDial said:
The Big Ten is considering selling a 1/20th share of future earnings to a Private Capital firm for 2 billion dollars. The schools would receive an immediate infusion of around 100 million each.
Click to expand...
Thanks Lefty!
2B is a helluva injection.
 


I hate this.

This will not be a stand alone entity, the "enterprise" will become a part of a PE firm's portfolio, and they do not expect a reasonable ROI, they demand outsized returns on their investments, typically within 3 - 7 years. It is typical for a PE firm to target a 20% IRR.

These are not kind souls who are doing something to help out another entity and give them a leg up, pat them on the head and encourage them to continue working long into the future.

The one thing I don't understand is to whom will they sell their share to in the future? PE firms like to swoop in, change things up with management or processes, increase revenue, and then flip that asset to some other buyer. They must already have an exit plan, I just can't imagine another willing party to buy their shares.
 

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