Big Ten Discussing $2 Billion Private Capital Deal

[Archbold44]

Remember... the ACC is throwing a trial balloon on unequal revenue sharing based on brands/success. Now this B1G deal is unequal sharing... OSU/PSU/Michigan are Tier 1... getting more of this $2.4B than everyone else. So that is the next step in the process.

It makes complete sense that Ohio State should not have a budget deficit because it takes $20M out of its own pocket to give to Rutgers. Kind of like the luxury tax in pro sports. The Yankees can do that... but Ohio has taxpayers. Almost a DUTY to make sure they are not giving up too much to some other state entity.

 

[kirbivore]

The Big Ten GOR runs until 2036.

This deal would extend it out ten more years.

If USC and Michigan want to leave, they still have to deal with the existing GOR.

Does the Big Ten have an exit fee? How much?

It seems weird to talk about these issues regarding the Big Ten.

(Not that any school is going to leave, but it is fun to see the cracks and unease in that conference)

Is the B1G GOR mightier than the ACC GOR

 

[FloridaCuse]

"What's Ohio St Waiting For?"

Briggs: Credit Michigan for standing up to Big Ten's reckless private capital deal. What's Ohio State waiting for?

Is Ohio State about to win the battle while Michigan takes the next Ten-Year War? Give it a few weeks, and we’ll find out. And, no, not on the football ...

www.toledoblade.com

 

[HtownOrange]

"What s Ohio St Waiting For?"

Briggs: Credit Michigan for standing up to Big Ten's reckless private capital deal. What's Ohio State waiting for?

Is Ohio State about to win the battle while Michigan takes the next Ten-Year War? Give it a few weeks, and we’ll find out. And, no, not on the football ...

www.toledoblade.com

Interestingly, the writer forgot to include that tOSU is in the hole more than $225MM, along with seven others.

 

[Scooch]

Would espn have interest in getting UM and USC to the ACC to weaken Big Ten? Big Ten has been difficult with CFP expansion. wouldn’t help usc on travel.

All of this remains so stupid. Create one big football league, negotiate together and create regional divisions. Let other sports go back to original rivalry based conferences. Schools would collectively save tens of millions in travel costs. Pour that back into paying players. It’s the only logical solution.

This, this, 1000 times this!

Creating a, say, 75-80 team Division 1++ football league, reclassifying the rest, and putting every other sport back into geographically logical conferences, makes all the sense in the world. It would also make more money.

So it won't be done, because the dopes running college athletics are unserious people.

 

[HRE Otto IV]

This, this, 1000 times this!

Creating a, say, 75-80 team Division 1++ football league, reclassifying the rest, and putting every other sport back into geographically logical conferences, makes all the sense in the world. It would also make more money.

So it won't be done, because the dopes running college athletics are unserious people.

I would think 90 is the best math wise. So nine conferences of 10 teams. Every P4 and every new PAC team gets included (76 teams). It would also get every state that plays FBS football into the new division. So who exactly would complain?

I even came up with cool names for the conferences: SEC, Big 8, Southwest, Big 10, PAC 10, Big East, ACC, WAC, American.

 

[HtownOrange]

I even came up with cool names for the conferences: SEC, Big 8, Southwest, Big 10, PAC 10, Big East, ACC, WAC, American.

Nobody would ever use those conference names. Never, not in a million years!

 

[HtownOrange]

See the link for the Yahoo article alleging that the 16 B1G teams are willing to vote and issue an ultimatum to UM and USC (3-6 months being floated for them to decide). Good article, haven't seen some of the stuff verified elsewhere, take it with a grain of salt unless you find additional sources to back it up without referencing this article.

Sources: Big Ten execs pressing to make $2.4 billion investment deal — without Michigan and USC if needed

The Big Ten has signaled to those at Michigan and USC that it is moving forward with the deal, even delivering to each program an ultimatum with a deadline.

sports.yahoo.com

What really caught my eye and should surprise everyone is the disparity between the proposed infusions and the shares of the deal going forward.

However, a driving factor for USC is the uneven distribution of revenue. Michigan, Ohio State and Penn State stand to earn as much as $190 million in upfront cash from the $2.4 billion — or about $40-50 million more than USC and Oregon. The other 13 schools are expected to receive $100-$110 million.

USC would also earn a smaller percentage of future annual conference distribution than Ohio State, Michigan and Penn State. The three legacy programs are expected to get an annual cut of about 5.5% of league revenues with other schools at 5% or lower, according to those who have seen details of the deal.

Initial cash infusion: UM at $190MM, as well as tOSU and PSU. USC at $145ishMM, with Oregon (Way too much for a school that lacks history!) Then, 13 schools in the $100MM-$110MM range. This is a far worse deal than I originally thought. Not only are the lower teams going to pay for everything, the middle teams are as well. Then the shares are watered down along with the initial cash infusion.

I am surprised that the BoTs are being tossed to the side. If this moves forward, I would not be surprised if several of the 16 schools lose their chancellors/presidents along with their ADs, and possibly a few suits to void the vote without a full BoT review and approval.

 

[baggerbob]

See the link for the Yahoo article alleging that the 16 B1G teams are willing to vote and issue an ultimatum to UM and USC (3-6 months being floated for them to decide). Good article, haven't seen some of the stuff verified elsewhere, take it with a grain of salt unless you find additional sources to back it up without referencing this article.

Sources: Big Ten execs pressing to make $2.4 billion investment deal — without Michigan and USC if needed

The Big Ten has signaled to those at Michigan and USC that it is moving forward with the deal, even delivering to each program an ultimatum with a deadline.

sports.yahoo.com

What really caught my eye and should surprise everyone is the disparity between the proposed infusions and the shares of the deal going forward.

However, a driving factor for USC is the uneven distribution of revenue. Michigan, Ohio State and Penn State stand to earn as much as $190 million in upfront cash from the $2.4 billion — or about $40-50 million more than USC and Oregon. The other 13 schools are expected to receive $100-$110 million.

USC would also earn a smaller percentage of future annual conference distribution than Ohio State, Michigan and Penn State. The three legacy programs are expected to get an annual cut of about 5.5% of league revenues with other schools at 5% or lower, according to those who have seen details of the deal.

Initial cash infusion: UM at $190MM, as well as tOSU and PSU. USC at $145ishMM, with Oregon (Way too much for a school that lacks history!) Then, 13 schools in the $100MM-$110MM range. This is a far worse deal than I originally thought. Not only are the lower teams going to pay for everything, the middle teams are as well. Then the shares are watered down along with the initial cash infusion.

I am surprised that the BoTs are being tossed to the side. If this moves forward, I would not be surprised if several of the 16 schools lose their chancellors/presidents along with their ADs, and possibly a few suits to void the vote without a full BoT review and approval.

There might be some states taking the colleges to court over the deal.

 

[Sherman20]

It sounds like UM was really hoping for the super league.

I would love to see the real analysis reports.

UC gets a 10% stake in the conference (Double the 5% assumption I was operating under), 15 year guaranteed with the sole option to sell or continue the deal. Not bad, if I am UC I am probably good with this. Never mind the probable conflict of interest of a non-member school holding a 10% stake in the BTN, as a famous penguin once said, "You don't see anything."* On the bad side, there is no new growth projections, if the B1G fails to maintain its status the investment may devalue in 15 years (not be worth the $2.4BB investment, let alone growth for inflation, let alone extra cash for profit).

Meanwhile, the B1G schools get the cash version ($133MM, or so) of a shot in the arm. They lose 10% of their share for at least 15 years and that loss may be continued or sold at the option of the new shareholder of 10%. Eight of the said schools are $225MM in debt or worse. While the infusion will cut into the debt, it is not erased. Nor do these schools show signs of fiscal responsibility; which begs the question if they cannot pay their bills with the current revenue, how will they afford the remaining debt on 10% less revenue? Plus, if they don't like the deal, they have to buy back the investmen

Has anyone seen hard numbers on this? Has anyone heard of each school's plan to attain fiscal responsibility? Let alone how they will manage to do so with less revenue? Has anyone shown how the B1G will generate more revenue to make up the loss of 10%? Who among us would take a small cash feel-good loan in exchange for insufficient cash to pay my other debts and rebuild while paying out 10% of our paycheck for 15 years and likely more?

This looks more like self destruction more than a recovery plan.


*Madagascar - My girls loved that movie.

Michigan and USC understand the stupidity of this and how they don’t need it. It’s schools like Rutgers that are desperate. Let’s use this moment to break up the Big 10 and bring the big dogs to the ACC.

 

[HtownOrange]

Michigan and USC understand the stupidity of this and how they don’t need it. It’s schools like Rutgers that are desperate. Let’s use this moment to break up the Big 10 and bring the big dogs to the ACC.

Grabbing my pitchfork. Where and when? Anybody have a torch?