Clearly a leverage play by Marrone...

[cliftonparksufan]

It can be. Kinda depends on risk / reward. It's how businesses often grow.

and often fail. I would love to see the financials on this project to see how much risk is really involved. From many outsiders it seems like a no brainer, but maybe the fundraising is really slow. Maybe we can each buy a weight plate or a pee trough.

 

[Orijinal]

In reading all these Marrone threads, the biggest question I have is how the hell did a kid from Long Island become a Bills fan?

Haha! Fantastic.

 

[longislandcuse]

In reading all these Marrone threads, the biggest question I have is how the hell did a kid from Long Island become a Bills fan?

Haha, born in Syracuse. Inherited my Bills fandom from my parents.

 

[longtimefan]

Leverage the additional revenue coming from joining the ACC (a massive increase to the AD).

This is the big X factor: How much net additional revenue is there going to be--at least in the short term? There is the BE exit fee. Is there an ACC entrance fee? We certainly can't count on all of those NCAA "units". Will we get a full share of ACC revenues from Year One?

 

[GoSU96]

This is the big X factor: How much net additional revenue is there going to be--at least in the short term? There is the BE exit fee. Is there an ACC entrance fee? We certainly can't count on all of those NCAA "units". Will we get a full share of ACC revenues from Year One?

Minimum increase of 13.5 M per year over what they were getting from the BE in media contracts. 17.1 vs 3.6. Current discussions are expected to raise that to 20M, at least.

And then there will be the increased revenues from other conference payouts (bowls, NCAA), ticket sales, merchandise.

 

[Moontan]

This is the big X factor: How much net additional revenue is there going to be--at least in the short term? There is the BE exit fee. Is there an ACC entrance fee? We certainly can't count on all of those NCAA "units". Will we get a full share of ACC revenues from Year One?

There will be some extra revenue.

Yes, there is a BE exit fee. Half was paid up front, the other half will have been withheld from SU shares of BE revenue over the 22 months leading up to the exit.

If there is an ACC entrance fee it will be paid by way of deductions from future revenue distributions. It is believed that there are no entrance fees.

It is believed that SU will get a full ACC share within a few years. In any event, immediate revenues will exceed those from what was earned in the BE (even with the loss of credits for 6 years).

 

[oldpinepoint]

Isn't it a financial risk to borrow against potential future revenue? Is that good business?

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Yes it's done all the time. I'm sure you did it to buy your house, car, etc. that's why you get charged an Interest rate. You leverage your balance sheet and revenues in order to reinvest in your business.

 

[rrlbees]

Minimum increase of 13.5 M per year over what they were getting from the BE in media contracts. 17.1 vs 3.6. Current discussions are expected to raise that to 20M, at least.

And then there will be the increased revenues from other conference payouts (bowls, NCAA), ticket sales, merchandise.

do new teams get full payouts from day 1? i know some conferences don't give full shares. also, do we know 100% for sure that nobody in the acc is leaving for elsewhere? do we know if the tv contracts can be redone by the network if someone left? i don't think it is as simple as "we will make $13.5M more so lets put it towards the practice facility".

 

[rrlbees]

Yes it's done all the time. I'm sure you did it to buy your house, car, etc. that's why you get charged an Interest rate. You leverage your balance sheet and revenues in order to reinvest in your business.

no, i got a mortgage based upon my current income. not what i might make in the future if i got a new job that paid twice as much.

 

[Bayside44]

So LaCanfora got to the bills org and got three names. Amazing. The bills organization must really hate Schefter for not giving him the other two names.

I want to say he is an SU grad too (LaCanfora)

 

[oldpinepoint]

no, i got a mortgage based upon my current income. not what i might make in the future if i got a new job that paid twice as much.

Correct bees but the Bank is assuming that the current income will continue on or grow in a historical trend. Especially when it comes to business this is how it's done.

 

[rrlbees]

Correct bees but the Bank is assuming that the current income will continue on or grow in a historical trend. Especially when it comes to business this is how it's done.

agree with that. but it isn't based upon my salary going up 4X especially since we haven't gotten even 1 year of that increase yet and it is always subject to change (up or down) in an ever changing alignment environment. as i said elsewhere also but posters like ishrill have spelled out very well, we don't know what the books look like or what their debt is right now etc. it isn't as simple as saying we are going to be rich, lets spend it now. lottery winners go bankrupt all the time.

 

[GoSU96]

no, i got a mortgage based upon my current income. not what i might make in the future if i got a new job that paid twice as much.

SU has that new job, it's not a might.

 

[upperdeck]

dont college kids get loans based on expecting to get a job out of college?

 

[Lrschill24]

dont college kids get loans based on expecting to get a job out of college?

If that was the case then I don't think you would see bank's writing loans to 18 year olds who want to major in sociology or art history. Reason student loans are written / backed by banks is that it is extremely difficult to discharge that debt in a bankruptcy filing unlike a mortgage.

 

[Lrschill24]

SU has that new job, it's not a might.

We haven't started in that new job yet let or gotten our first payment from that job. Considering the panic on this board about a month ago about the ACC after maryland left, can it be guaranteed that the ACC TV contract will pay out $19+ million a year (if the exit fee for Maryland isn't upheld then you have a conference that the SEC/B10 will look to raid which could adversely impact the TV deal).

Even with a new TV deal what is the payment out year 1 versus year 5 or 10. One would expect increases year over year so what is the average of the deal per year doesn't mean that you get that year one.

 

[oldpinepoint]

If that was the case then I don't think you would see bank's writing loans to 18 year olds who want to major in sociology or art history. Reason student loans are written / backed by banks is that it is extremely difficult to discharge that debt in a bankruptcy filing unlike a mortgage.

Neither are easy to discharge. Most student loans are backed by the Feds

 

[AluminNV]

Marrone being in the mix is a good thing. If he turns down a NFL program (one of the 30 highest level spots in his profession) it cements his position as one of the best college coaches. And if he went 5-7 instead of 7-5 he could have been fired. Its a thin line.

Right now Marrone interviewing for multiple jobs means SU has a top 10 NCAA head coach. He can turn them down and get him and his staff raises at SU. He can keep winning and leave SU after a BCS season and get his choice NFL job when it comes open.

He should interview. And he should decline in a high profile way bad jobs like BUffalo and Cleveland. If a team with a QB were to ever offer him a job than I guess he can go but Chicago won't hire him.

I'd rather my coach get real respect in the profession in terms of NFL interviews than phony respect in the way of being head of the College Coaches Assocication.

 

[GoSU96]

We haven't started in that new job yet let or gotten our first payment from that job. Considering the panic on this board about a month ago about the ACC after maryland left, can it be guaranteed that the ACC TV contract will pay out $19+ million a year (if the exit fee for Maryland isn't upheld then you have a conference that the SEC/B10 will look to raid which could adversely impact the TV deal).

Even with a new TV deal what is the payment out year 1 versus year 5 or 10. One would expect increases year over year so what is the average of the deal per year doesn't mean that you get that year one.

You need to move forward now assuming that the deal will hold. You can make plans to unwind things if necessary if the ACC blows up, but until then plan for and act on success, not failure.

I haven't seen anything that says that SU isn't fully vested day one.

Here's what I do know, the current TV contract is set to payout 17M to ACC teams this year, so the minimum increase is 13.5M. That's more than enough to bank on.

 

[Lrschill24]

You need to move forward now assuming that the deal will hold. You can make plans to unwind things if necessary if the ACC blows up, but until then plan for and act on success, not failure.

I haven't seen anything that says that SU isn't fully vested day one.

Here's what I do know, the current TV contract is set to payout 17M to ACC teams this year, so the minimum increase is 13.5M. That's more than enough to bank on.

Question is when does Syracuse receive that money? One thing if you have it on July 1st 2013 versus a later dates in 2013 or into 2014. Another question is how much money is Syracuse losing from leaving the Big East in NCAA Basketball tournament revenue. That has to be factored into the math over the next five years against the increase in TV money. Additionally some of that difference in revenue from the TV deal would be earmarked to cover the exit fees from the big east over the next few years.

Also what do you think its going to cost on a per annual basis to pay the football staff going forward. Easy assumption is that the head coach position is going to cost $1M+ more per year than the current outlay and if you factor in the assistant coaches salaries probably another $1m there.

Should syracuse simply spend the extra TV money to fund a football practice facility versus funding other aspects within the athletic department including improvements to the Carrier Dome? Considering that it is costing UConn $32million to build their basketball only practice facility (nearly double the cost of the Carmelo Center), what is the cost of the football only practice facility we are talking about. If its more than a 100 yard covered field and it includes offices & meeting rooms then it is conceivable that the cost is going to be more than what UConn is spending. Even if you throw a large % of the net available television money to the new building, that doesn't cover the cost of building over the short time frame of construction (1 to 2 years).

Rutgers and Maryland are ridiculed for their irresponsible spending and the deficits they ran up in building facilities (a lot of that money being spent on stadium improvements) that the B10 money is suppose to payoff. But we should basically do the same thing and spend to build a football only practice facility that doesn't directly impact the ability to increase revenue? If the university is within reach of its fundraising goal to start the project then I wouldn't be surprised if some of the additional television money is used to close the gap. But considering where the project is after 4 years, its easy to deduce that the gap in fundraising to starting the project is still substantial to the point where the additional money from going to the ACC isn't close to enough to greenlight the project.

 

[rrlbees]

You need to move forward now assuming that the deal will hold. You can make plans to unwind things if necessary if the ACC blows up, but until then plan for and act on success, not failure.

I haven't seen anything that says that SU isn't fully vested day one.

Here's what I do know, the current TV contract is set to payout 17M to ACC teams this year, so the minimum increase is 13.5M. That's more than enough to bank on.

Do we get a full share from year 1? Do we know that is the figure from year 1 or is the TV deal backloaded? It is too easy to just say we will have $13m more in our pockets next year.

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[reedny]

Leveraging what? What if he has already signed an extension with a significant pay raise? Is he leveraging reopening that agreement?

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It may be that, or a significant facilities investment that he's leveraging.

 

[CusefanATL]

no, i got a mortgage based upon my current income. not what i might make in the future if i got a new job that paid twice as much.

do you sign long term contracts in your work?

 

[Toga]

Do we get a full share from year 1? Do we know that is the figure from year 1 or is the TV deal backloaded? It is too easy to just say we will have $13m more in our pockets next year.

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SU's call on what they want to do with the new money coming in but there sure as heck enough new money coming in to cover any new project related annual debt service - especially at today's ridiculously low interest rates. Is partial financing somehow totally off the table?

 

[JOC44]

Isn't it a financial risk to borrow against potential future revenue? Is that good business?

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We all did it with our college loans. It's how every business makes capital improvements.