Players getting paid isn't going to kill college sports...

[NJneer12]

Yes. Not trying to be cute or rude, but that is a horrendous football conference in 2024.

Yeah, do we forget Cuse basically got out of a conference similar to this about 15 years ago..

 

[All4SU]

For a while there, the Big East was a better football and basketball conference than the ACC. The BE should have poached them. But competing interests in the BE kept that from happening. Those interests were football/basketball related. Now the competing interests in the ACC are money and survival.

 

[orange79]

Yes. Not trying to be cute or rude, but that is a horrendous football conference in 2024.

Nothing cute or rude at all.

That's just plain awful.

If that conference were allowed to compete in the CFB playoffs, the "champion" would get blown out 48-10 in the first round.

 

[HRE Otto IV]

Yes. Not trying to be cute or rude, but that is a horrendous football conference in 2024.

1. We were talking about a left behind world where the Top FB brands were licensed out. That ain’t us. So technically you cannot compare to conferences today.

2. Is the ACC really that much better? Especially after being gutted?

3. Do you take more joy in being at SU games over watching on TV?

4. Do you take more joy in having regional yearly played rivals or being in a mostly Southern conference playing teams once in 3 years?

5. This is more for NJneer. We left the Big East 3.0 for money. Take away the money and there is no point in leaving.

6. On top of that BE 3.0 was not Northeastern any more. Also what I mentioned has BC, Maryland, West Virginia which that BE did not have. Plus Army and Navy which are fun to play.

7. In the left behind world the conference champ would have a shot at a national title.

8. Our all time played FBS:

1. Pitt
2. Penn State (gone)
3. WV
4. BC
5. Rutgers
6. Maryland
7. Temple
8. Navy
9. Miami (gone)
10. Army and Louisville tied

So we would be in a conference with 8 of our Top 10 all time played FBS schools. Isn’t that what you want in a conference?

 

[HRE Otto IV]

Nothing cute or rude at all.

That's just plain awful.

If that conference were allowed to compete in the CFB playoffs, the "champion" would get blown out 48-10 in the first round.

By whom are they getting blown out?

We were talking left behind world not today’s world. Context matters.

 

[orange79]

By whom are they getting blown out?

We were talking left behind world not today’s world. Context matters.

I understood your context.

All I was saying is that is an awful conference. AWFUL.

 

[orange79]

1. We were talking about a left behind world where the Top FB brands were licensed out. That ain’t us. So technically you cannot compare to conferences today.

2. Is the ACC really that much better? Especially after being gutted?

3. Do you take more joy in being at SU games over watching on TV?

4. Do you take more joy in having regional yearly played rivals or being in a mostly Southern conference playing teams once in 3 years?

5. This is more for NJneer. We left the Big East 3.0 for money. Take away the money and there is no point in leaving.

6. On top of that BE 3.0 was not Northeastern any more. Also what I mentioned has BC, Maryland, West Virginia which that BE did not have. Plus Army and Navy which are fun to play.

7. In the left behind world the conference champ would have a shot at a national title.

8. Our all time played FBS:

1. Pitt
2. Penn State (gone)
3. WV
4. BC
5. Rutgers
6. Maryland
7. Temple
8. Navy
9. Miami (gone)
10. Army and Louisville tied

So we would be in a conference with 8 of our Top 10 all time played FBS schools. Isn’t that what you want in a conference?

Look at the last word in his post.

2024. Pretty sure we're not being left behind in 2024. Hence my agreement with Eric15's post.

 

[orlandoorange]

100% - every PE message board warrior I encounter doesn't even know what a PE growth investor is. I only work for PE growth investors and it's markedly different than buyouts, consolidation and integration gutting. I have never worked for a consolidator that makes it's mark on cost/expense synergies and I never will.

I don't blame people who don't understand the difference - I do blame people that consistently reinforce this stereotype that all PE is bad and think they know what they're talking about. Being a know it all about things you don't know it all about isn't admirable.

Dunning–Kruger Effect - The Decision Lab

Dunning–Kruger Effect explains why the least competent at a task often incorrectly rate themselves as high-performers because they do not know otherwise.

thedecisionlab.com

 

[OttoinGrotto]

Private equity is such a broad label. I have raised money from State economic development funds, From country economic development funds, went public with GS with one company, sold to and ran a company for Black stone, and raised capital from two PE firms over my career.
Each one of these situations was different. Each had positives and negatives.
The key is that the structure of the relationship and most importantly the goals of each party have to be aligned at the start or it becomes a mess. All but two of my deals worked out well for all involved. My first deal worked out extremely well for the State of ND but not so well for me as I didn't make much on it. Still it was a success. I took a company public out of Omaha with Goldman and that was a mess. Why? Because the business needed to be run in a way that didn't align with how most publicly traded companies are measured. We ended up buying the company back in that deal and wasting a considerable amount of time and human capital.
The PE deals were actually the best as they were well thought out and structured properly.
I believe that the schools can raise capital efficiently from PE firms, retain control and provide the firms with a solid return.
These deals will in essence be long term loans against future TV /league payouts. There won't be an equity component as they will not be owing a percentage of the university rather they will receive a percentage of future earnings which I would assume will be tied directly to gross payouts from their leagues/media rights agreements.
Long story short PE in this environment is in my mind mostly a long term loan with a fixed return. The PE companies are not going to running the athletic departments of the schools. They are simply going to provide the schools with capital today against future earnings.

Take a gander at the PE firm's strategy page that's mentioned in the article - Strategy - RedBird Capital Partners

Their strategy isn't providing capital against future earnings.

It's being hands-on and in control.

 

[javadoc]

Private equity is such a broad label. I have raised money from State economic development funds, From country economic development funds, went public with GS with one company, sold to and ran a company for Black stone, and raised capital from two PE firms over my career.
Each one of these situations was different. Each had positives and negatives.
The key is that the structure of the relationship and most importantly the goals of each party have to be aligned at the start or it becomes a mess. All but two of my deals worked out well for all involved. My first deal worked out extremely well for the State of ND but not so well for me as I didn't make much on it. Still it was a success. I took a company public out of Omaha with Goldman and that was a mess. Why? Because the business needed to be run in a way that didn't align with how most publicly traded companies are measured. We ended up buying the company back in that deal and wasting a considerable amount of time and human capital.
The PE deals were actually the best as they were well thought out and structured properly.
I believe that the schools can raise capital efficiently from PE firms, retain control and provide the firms with a solid return.
These deals will in essence be long term loans against future TV /league payouts. There won't be an equity component as they will not be owing a percentage of the university rather they will receive a percentage of future earnings which I would assume will be tied directly to gross payouts from their leagues/media rights agreements.
Long story short PE in this environment is in my mind mostly a long term loan with a fixed return. The PE companies are not going to running the athletic departments of the schools. They are simply going to provide the schools with capital today against future earnings.

Why would anyone “invest” in a college athletics program like this? And again, why do the colleges need the money?

It sounds to me like this is a loan to cover salary.

Or the PE analog of NIL. “No, seriously, it’s an investment and not pay for play.”

The regulatory environment surrounding sports is too uncertain, IMO, to make any predictions of future state, certainly not enough to sink $ into the situation.

 

[OrangeFoo]

Private equity is such a broad label. I have raised money from State economic development funds, From country economic development funds, went public with GS with one company, sold to and ran a company for Black stone, and raised capital from two PE firms over my career.
Each one of these situations was different. Each had positives and negatives.
The key is that the structure of the relationship and most importantly the goals of each party have to be aligned at the start or it becomes a mess. All but two of my deals worked out well for all involved. My first deal worked out extremely well for the State of ND but not so well for me as I didn't make much on it. Still it was a success. I took a company public out of Omaha with Goldman and that was a mess. Why? Because the business needed to be run in a way that didn't align with how most publicly traded companies are measured. We ended up buying the company back in that deal and wasting a considerable amount of time and human capital.
The PE deals were actually the best as they were well thought out and structured properly.
I believe that the schools can raise capital efficiently from PE firms, retain control and provide the firms with a solid return.
These deals will in essence be long term loans against future TV /league payouts. There won't be an equity component as they will not be owing a percentage of the university rather they will receive a percentage of future earnings which I would assume will be tied directly to gross payouts from their leagues/media rights agreements.
Long story short PE in this environment is in my mind mostly a long term loan with a fixed return. The PE companies are not going to running the athletic departments of the schools. They are simply going to provide the schools with capital today against future earnings.

My understanding of PE is this… PE firms typically borrow money at interest rate x or get the money from investors promising a return of X. They then take that capital and buy companies with the money. PE firms then typically exit the investment by selling the company or letting it go public once they have stripped it down to the bare parts. The goal again is effectively: profit from sale > initial investment x 120%

Their math is very simple… they need to generate a IRR > interest rate they borrowed the capital at. In a typical acquisition PE firms basically cut everything they can cut to increase cash flows so they can get to that IRR and have a laser focus on positive cash flow even if means hurting long term value because again their strategy is to exit the investment.

Not sure how any of that aligns with college athletics. But if I were a PE I would want hiring and firing rights at all levels of the AD and possibly the team level. There are PE firms that require employees to take what are effectively IQ tests to keep their jobs… I know this because I have interviewed at a company owned by a PE where I had a previous relationship with the CEO. Before I could interview I had to pass their dumb tests. No one can see how to stretch this testing to an athletic environment? Really?

If PE enters college sports, it will be okay for maybe 5 years and then the bill will come due.

 

[kcsu]

Take a gander at the PE firm's strategy page that's mentioned in the article - Strategy - RedBird Capital Partners

Their strategy isn't providing capital against future earnings.

It's being hands-on and in control.

There are more variations of Private Equity than you or I can imagine. The private equity guys I worked with held minority interest and simply wanted to put capital to work with a good return. They didn't want me to sell they wanted me to expand with their capital. Do some homework and bone up on Private Equity.

It's like saying someone is a doctor. Doctor of what? Computer science or medical. History or Neuroscience. Orthopedic or Oncologist. Surgeon Ok. General like a gallbladder or Brain surgeon?
Same with someone saying they have cancer. Breast Colon skin liver bone blood... Private equity is a very broad label and the PE deals that happen with universities will be about putting capital to work for a solid return.

 

[AlaskaSU]

Why would anyone “invest” in a college athletics program like this? And again, why do the colleges need the money?

It sounds to me like this is a loan to cover salary.

Or the PE analog of NIL. “No, seriously, it’s an investment and not pay for play.”

The regulatory environment surrounding sports is too uncertain, IMO, to make any predictions of future state, certainly not enough to sink $ into the situation.

Makes no sense. There is no market for buying and selling college teams. Maybe a market will be created. Who will own the facilities?

 

[jgeorge322]

Private equity is such a broad label. I have raised money from State economic development funds, From country economic development funds, went public with GS with one company, sold to and ran a company for Black stone, and raised capital from two PE firms over my career.
Each one of these situations was different. Each had positives and negatives.
The key is that the structure of the relationship and most importantly the goals of each party have to be aligned at the start or it becomes a mess. All but two of my deals worked out well for all involved. My first deal worked out extremely well for the State of ND but not so well for me as I didn't make much on it. Still it was a success. I took a company public out of Omaha with Goldman and that was a mess. Why? Because the business needed to be run in a way that didn't align with how most publicly traded companies are measured. We ended up buying the company back in that deal and wasting a considerable amount of time and human capital.
The PE deals were actually the best as they were well thought out and structured properly.
I believe that the schools can raise capital efficiently from PE firms, retain control and provide the firms with a solid return.
These deals will in essence be long term loans against future TV /league payouts. There won't be an equity component as they will not be owing a percentage of the university rather they will receive a percentage of future earnings which I would assume will be tied directly to gross payouts from their leagues/media rights agreements.
Long story short PE in this environment is in my mind mostly a long term loan with a fixed return. The PE companies are not going to running the athletic departments of the schools. They are simply going to provide the schools with capital today against future earnings.

So just debt financing?

 

[kcsu]

So just debt financing?

I don't see any other way. PE isn't going to own the team. I guess they could buy the media rights and control those if eventually its each team for themselves. But i don't see Sank and the Other Lords giving up control of their conferences and I doubt any team other than ND would be able to make a go of it as an independent without being in a conference. I really don't know how the PE guys play unless it's a straight debt deal

 

[OttoinGrotto]

There are more variations of Private Equity than you or I can imagine. The private equity guys I worked with held minority interest and simply wanted to put capital to work with a good return. They didn't want me to sell they wanted me to expand with their capital. Do some homework and bone up on Private Equity.

It's like saying someone is a doctor. Doctor of what? Computer science or medical. History or Neuroscience. Orthopedic or Oncologist. Surgeon Ok. General like a gallbladder or Brain surgeon?
Same with someone saying they have cancer. Breast Colon skin liver bone blood... Private equity is a very broad label and the PE deals that happen with universities will be about putting capital to work for a solid return.

Kcsu, this is what I'm telling you - we know what kind of PE firm it is because it is named in the article and they have a really nice, concise page on their website about their strategy that I linked to. I literally did my homework and boned up on exactly what Red Bird capital is about, and your suggestion to do so is absolutely ridiculous given that you did no such thing yourself.

In the words of board legend moqui "physician, heal thyself."

 

[Cusefan0307]

I don't see any other way. PE isn't going to own the team. I guess they could buy the media rights and control those if eventually its each team for themselves. But i don't see Sank and the Other Lords giving up control of their conferences and I doubt any team other than ND would be able to make a go of it as an independent without being in a conference. I really don't know how the PE guys play unless it's a straight debt deal

I slammed PE a bit earlier in the thread and while they do help growth firms their man goal is to increase margins which leads to decreased competition, more inequality, reduced quality and an overall worse experience for the consumer. It’s easy to see all of that happening with college football. It will likely lead to some sort of SEC/BIG NFL minor league. Again, not saying some companies don’t get their start because of PE, but there’s a lot of emotion in thread from people who likely work in the sector.

 

[FRANKIEFAN]

I’m glad guys not good enough for the NBA/NFL will start earning the money that was being wasted on the swimming team.

PE is only going to pump so much dead money into a losing proposition before they wise up. Wally World will give Razorback football 100mil per year and they still won’t be over .500 in the SEC and it will stop. Calipari will get double that and win less than MusselMan and it will stop.

Just hope these kids are smart with it gonna be hard to go from earning 7 figures to 50k in the g league.

 

[OburgOrange]

I will say, sitting at the bar while on business trips, having a Brewtus or two, Applebee's wings were more than passable.

You’re CuseRunners dad! I knew it!

 

[kcsu]

Kcsu, this is what I'm telling you - we know what kind of PE firm it is because it is named in the article and they have a really nice, concise page on their website about their strategy that I linked to. I literally did my homework and boned up on exactly what Red Bird capital is about, and your suggestion to do so is absolutely ridiculous given that you did no such thing yourself.

In the words of board legend moqui "physician, heal thyself."

Do a little more research on Red Bird. It will be a loan based instrument

 

[kcsu]

Kcsu, this is what I'm telling you - we know what kind of PE firm it is because it is named in the article and they have a really nice, concise page on their website about their strategy that I linked to. I literally did my homework and boned up on exactly what Red Bird capital is about, and your suggestion to do so is absolutely ridiculous given that you did no such thing yourself.

In the words of board legend moqui "physician, heal thyself."

Im sorry but you need to stay in whatever business you are in.
Read the words that matter. Not the fluff, not the Bs. It's about 2/3rds down their weak narrative.
" Cass... debt. That's your clue.

 

[GoSU96]

Take a gander at the PE firm's strategy page that's mentioned in the article - Strategy - RedBird Capital Partners

Their strategy isn't providing capital against future earnings.

It's being hands-on and in control.

Look at their portfolio, they aren’t managing all of those companies. I’m not convinced there’s a play here, but they do have a ton of experience in the sports and entertainment space.

 

[kcsu]

Look at their portfolio, they aren’t managing all of those companies. I’m not convinced there’s a play here, but they do have a ton of experience in the sports and entertainment space.

Cas can provide a debt based... without any fixed...
If it walks like, quacks like...
Forget all the BS It's a loan against future earnings. The lipstick on the pig is their crap about creating additional incremental revenue streams and in essence paying themselves back through all of this new revenue they are going to create.
Bottom line. It's a loan.

 

[two3zone]

I hope we're talking about Doritos buster.

I was assuming it was wine bags.

 

[Chip]

This board’s obsession with ACC contingency plans from losing all its most high profile schools is just amazing stuff.

Do you do it in your personal life? Like do you go to Dunkin Donuts in the morning and think well, I better grab an application because I’m sure I’ll lose that IT job any day now.