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Can Private Equity benefit college sports?
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[QUOTE="pokercuse08, post: 5304429, member: 6535"] My assumption is that the deal would be something like... Private Equity offers FSU a $300M lump sum, contingent on FSU negotiating its way out of the ACC for that amount in a deal that preserves its media rights AND on getting an offer from the SEC/B1G. FSU then gives private equity something like a $7-10M/yr payment (half to two-thirds of the increased revenue from the conference), and control over ticketing/concessions/merch with PE paying FSU a cut of ticketing. Obviously it's hard to see how it pencils out without all the details, but it would be a way for a team to break out of the ACC earlier. The other scenario is similar, but would see PE injecting the difference in ACC vs B1G/SEC revenue each year in exchange for control over merch/concessions/ticketing that would allow them to make up that much and more. Of course, why do this if you can just do the same stuff PE would do and increase that cash flow anyway? At the end of the day, the deal would likely boil down to up front cash in exchange for a share of revenue that returns 15-20% per year on the initial investment for PE that goes on in perpetuity, backed by enough collateral that the PE fund can't lose. You get the result you want in terms of realignment for your school sooner, but in exchange 50 years from now your fans are complaining on message boards about how you're STILL paying the PE fund millions of dollars a year, and that's if things go well. If things go poorly, they circle like vultures and sell off your weight room and take a 100% cut of the revenue of every event in your stadium and charge your university exorbitant fees to use it for graduation etc etc. [/QUOTE]
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