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

[AlaskaSU]

Pac 12 says hello.

 

[AAM62]

Anyone see Konrad's Linkedin post on this?

 

[OttoinGrotto]

Anyone see Konrad's Linkedin post on this?

No sir.

 

[Forza Azzurri]

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

Does not have to be debt.

You cannot buy into an ownership stake, whether minority or control, of a college football team or an athletic department but it could simply be a capital infusion. It may not have to be repaid.

My guess is that if, in fact, it is not debt, it is a capital infusion that is used to either increase monetization of existing revenue streams and/or monetize new revenue streams and the PE firm will receive some portion of the incremental revenues generated.

It could also be a capital infusion "with control", ie. the PE firm gets either decision-making power or at least veto right or it could be left to the athletic department to make all the decisions.

Lots of possible ways to skin the cat on this.

 

[OttoinGrotto]

It could also be a capital infusion "with control", ie. the PE firm gets either decision-making power or at least veto right or it could be left to the athletic department to make all the decisions.

Live look in at Red Bird's bargaining table when control comes up:

 

[bnoro]

Does not have to be debt.

You cannot buy into an ownership stake, whether minority or control, of a college football team or an athletic department but it could simply be a capital infusion. It may not have to be repaid.

My guess is that if, in fact, it is not debt, it is a capital infusion that is used to either increase monetization of existing revenue streams and/or monetize new revenue streams and the PE firm will receive some portion of the incremental revenues generated.

It could also be a capital infusion "with control", ie. the PE firm gets either decision-making power or at least veto right or it could be left to the athletic department to make all the decisions.

Lots of possible ways to skin the cat on this.

Why would they give an AD a capital infusion in exchange for incremental revenue? They'd then be losing money? These ADs are going to get bled dry

 

[AlaskaSU]

When students become union employees, it is indeed the end. Colleges are not in the business of running pro teams, even those who could afford it. Someone else would have to step in and buy the name and rent the facilities.

 

[AlaskaSU]

Pandora's Box

Without a federal exemption, the earnings of a college team composed of paid employees, college TV and gate revenue would be taxable. Could a non-profit college even own a sports team whose players are professional by federal definition?

Do all players get paid the same rate based on hours played, or whatever? Are all salaries negotiated? This is a boom for attorneys and agents. College Admin. staff would have to be hired for personnel matters, union negotiation etc. High schoolers would have to hire agents. Do players pay union dues? Do they get pensions and health benefits? Do they sign contracts or punch a time clock? If this is professional sports, can the school sell the team? Hoffman's Orange Dogs? Wegmans Oranges? Cuse Semiconductors? Baby Knicks? Teams could go on strike. Could players be fired?

 

[walsh2012]

Remember that when you go to Panera, enjoy a Pillsbury cake, or type on a Dell.

Is this supposed to be an argument in favor of these brands? Because i'm either missing the sarcasm because of text or we just have diametrically opposite opinions of their quality

 

[Forza Azzurri]

Why would they give an AD a capital infusion in exchange for incremental revenue? They'd then be losing money? These ADs are going to get bled dry

Sorry. Not following your line of logic.

Here is an extremely simplistic, theoretical example.

Firm provides 1MM to university to start new business line with a 2/3-1/3 profit split.

Profit is 300K per year. 200K goes to firm. 100K goes to university.

 

[WoadBlue]

The Big and SEC aren't going to a 2 league system of 40 teams and no-one else.
They would get hammered in court by the Justice Department in an anti-trust suit.
And there is no way Congress is giving them an exemption.
And they plus the Networks don't want to go down that road.
The Federal Government gets involved and things could get very ugly for the Networks, and the conferences.

Better for them than that is that they make certain nonoythr conference has the money to compete with them, and they claim then to be open to all competition and winning MUCH more money will be all the proof they need they should have al the money.

Yes, that will amount to ruining college sports.

 

[Cusefan0307]

Sorry. Not following your line of logic.

Here is an extremely simplistic, theoretical example.

Firm provides 1MM to university to start new business line with a 2/3-1/3 profit split.

Profit is 300K per year. 200K goes to firm. 100K goes to university.

Then we have firms who know nothing about college sports doing the hiring and firing….

 

[All4SU]

When colleges are no longer in charge. When players are no longer students. What you have is not college sports.

 

[Forza Azzurri]

Then we have firms who know nothing about college sports doing the hiring and firing….

Maybe.

And, just because you may know a lot about college sports does not mean you are good at hiring and firing decisions (Greg Robinson anyone?).

 

[AlaskaSU]

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.

Inequality, reduced quality, reduced competition is crazy leftie talk. Active PE firms take on failing enterprises. They cut the fat, increase efficiency, inject technology and logistics so as to decrease the price or provide more value to consumers. If they are successful sales will increase along with enterprise value. That is called meeting consumer demand and getting rewarded for it. Why did invest in an enterprise if you plan on running it into the ground. Parts can be sold off or closed, but the goal is to increase value so that the enterprise can be sold or brought public.

This is not to say that there are no exceptions. There are some evil predators out there whose only interest is to break up the parts and sell them separately. Owners that sell to a such operators are equally despicable.

 

[Forza Azzurri]

Inequality, reduced quality, reduced competition is crazy leftie talk. Active PE firms take on failing enterprises. They cut the fat, increase efficiency, inject technology and logistics so as to decrease the price or provide more value to consumers. If they are successful sales will increase along with enterprise value. That is called meeting consumer demand and getting rewarded for it. Why did invest in an enterprise if you plan on running it into the ground. Parts can be sold off or closed, but the goal is to increase value so that the enterprise can be sold or brought public.

This is not to say that there are no exceptions. There are some evil predators out there whose only inter St is to break up the parts and sell them separately. Owners that sell to a such operators are equally disposable.

In the interest of balance, reduced quality is not crazy leftie talk. Private equity, in general, has not been good for medical care, especially when PE has acquired hospitals.

 

[Cusefan0307]

Inequality, reduced quality, reduced competition is crazy leftie talk. Active PE firms take on failing enterprises. They cut the fat, increase efficiency, inject technology and logistics so as to decrease the price or provide more value to consumers. If they are successful sales will increase along with enterprise value. That is called meeting consumer demand and getting rewarded for it. Why did invest in an enterprise if you plan on running it into the ground. Parts can be sold off or closed, but the goal is to increase value so that the enterprise can be sold or brought public.

This is not to say that there are no exceptions. There are some evil predators out there whose only inter St is to break up the parts and sell them separately. Owners that sell to a such operators are equally disposable.

Except they don’t just purchase companies that are failing enterprises.

Private equity is killing healthcare and the housing market by driving up costs for the middle class. They are doing the exact opposite of creating efficiency.

I work in the energy sector I don’t need a lecture on economics.

Their main goal is high short term profits and often they lose sight of long term goals and have poor long term strategies in the sectors they enter.

 

[bnoro]

Except they don’t just purchase companies that are failing enterprises.

Private equity is killing healthcare and the housing market by driving up costs for the middle class. They are doing the exact opposite of creating efficiency.

I work in the energy sector I don’t need a lecture on economics.

Their main goal is high short term profits and often they lose sight of long term goals and have poor long term strategies in the sectors they enter.

What they've done to the healthcare sector is literally disgusting.

 

[AlaskaSU]

I don't know about all the insanity in places like NY and CA but in AK and AZ health care is good with plenty of competition and most houses are built in AZ by the long-term players whose stocks are on the major exchanges. Blaming the cost of housing on PE is crazy talk. In CA there are all sorts of self imposed restrictions, taxes, special needs, market distortions, etc., not to mention inflation in the cost of raw materials and labor.

 

[bnoro]

I don't know about all the insanity in places like NY and CA but in AK and AZ health care is good with plenty of competition and most houses are built in AZ by the long-term players whose stocks are on the major exchanges. Blaming the cost of housing on PE is crazy talk. In CA there are all sorts of self imposed restrictions, taxes, special needs, market distortions, etc., not to mention inflation in the cost of raw materials and labor.

Emergency rooms are understaffed and in unsafe working conditions daily. Doctors are forced to shorten patient visits to fit more in. Specific diagnoses are forced down the path that will get the hospital bigger payouts from insurance/supply vendors.

It is currently almost impossible to buy single family houses in NJ unless you can get a million dollar mortgage. Corporations buying blocks of houses and doing cheap gut jobs or knocking them down for ugly condos. Houses going for $50k-$100k over asking.

Capitalism is destroying the millennial and younger generations.

 

[kcsu]

The Big and SEC aren't going to a 2 league system of 40 teams and no-one else.
They would get hammered in court by the Justice Department in an anti-trust suit.
And there is no way Congress is giving them an exemption.
And they plus the Networks don't want to go down that road.
The Federal Government gets involved and things could get very ugly for the Networks, and the conferences.

The networks won't allow consolidation as they need content.

 

[Forza Azzurri]

Blaming the cost of housing on PE is crazy talk.

This is true.

The housing shortage in this country traces its roots back to the GFC when housing was absolutely decimated.

Consumers, and housing demand, ultimately recovered but building never did.

Worker shortages in construction persist to this day and the covid-related, supply chain issues, which have substantially raised the costs of building homes, have not helped.

Private Equity has nothing to do with the housing shortage or the inflation in housing prices (both rents and purchases).

 

[Forza Azzurri]

Capitalism is destroying the millennial and younger generations.

I guarantee you would not like the alternatives to capitalism.

 

[orange79]

Ooooooooooookay.

I think this thread has run its course.