Want to buy the Pac-12?

[Scooch]

Want to buy a stake in the Pac-12 Conference? It’s exploring taking on private equity partners.

Pac-12 Conference leadership pitched university presidents and chancellors a strategic plan aimed at bailing out the struggling conference and helping it keep pace with its Power Five Conference peers.

The “Pac-12 NewCo” plan was introduced to the conference presidents and chancellors at their mid-November meeting and was subsequently discussed in a conference call in December, per sources. Private investors would own 10 percent equity in the newly formed entity in exchange for a $500 million investment.

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When you're selling a piece of your conference to private investors it makes the whole "student athlete" canard a bit more difficult to shill.

 

[nzm136]

It would be hilarious if the ACC cane up with the cash and bought the other 10% as a hedge against the PAC-12 catching fire in the future.

I ironically can’t think of anyone else (other than other conferences) for whom this investment would make sense. The B1G should definitely look into it as a way to offset future revenue deterioration (vs the PAC) as a result of unfavorable demographic shifts.

 

[nzm136]

“Hi, we’re the (insert literally any other conference here). You know how you’re under-indexed on population, and you’re betting on favorable demographic shifts being a huge tailwind to push you past (insert conference here) in the future? Yeah, we’ll take 10% of all of your profits from any and all rights from PAC 12 member institutions. Here’s $500 MM. Good luck passing us with your one time investment accompanied by the added burden of paying us 10% of everything rights-related that you make!”

 

[Scooch]

It would be hilarious if the ACC cane up with the cash and bought the other 10% as a hedge against the PAC-12 catching fire in the future.

I ironically can’t think of anyone else (other than other conferences) for whom this investment would make sense. The B1G should definitely look into it as a way to offset future revenue deterioration (vs the PAC) as a result of unfavorable demographic shifts.

I want The American to buy into the Pac-12 sooooooo badly.

 

[Scooch]

More seriously, I don't think the Pac-12 needs to be at revenue parity with the other four power conferences due to it's strangehold on geography.

I certainly get that the coaching labor market is fluid, as is recruiting. At the same time, if a coach or recruit wants to be at a P5 school *anywhere* in the pacific or mountain time zones they have to be at a Pac-12 program. It's a nice little advantage for those 12 schools.

 

[CusefanATL]

no thanks

 

[RF2044]

More seriously, I don't think the Pac-12 needs to be at revenue parity with the other four power conferences due to it's strangehold on geography.

I certainly get that the coaching labor market is fluid, as is recruiting. At the same time, if a coach or recruit wants to be at a P5 school *anywhere* in the pacific or mountain time zones they have to be at a Pac-12 program. It's a nice little advantage for those 12 schools.

uconn STILL wouldn't get in.

 

[N.Y. Orangeman]

I'd love to see them get *attempt* to get this through 8-10 BOTs, state legislatures and governor's offices. From our perspective, the freedom of information requests in the various states would be incredible entertainment.

 

[nzm136]

I want The American to buy into the Pac-12 sooooooo badly.

Honestly, this would be a heck of a hedge in the event of a P5 breakaway.

 

[corpjet]

Buy the majority and make sure the 12 schools in it have long term no breach contracts and break away from the NCAA. Hell add an additional 8 and get to 20. This would be the only means to make a significant profit off of that large of an investment.

 

[nzm136]

More seriously, I don't think the Pac-12 needs to be at revenue parity with the other four power conferences due to it's strangehold on geography.

I certainly get that the coaching labor market is fluid, as is recruiting. At the same time, if a coach or recruit wants to be at a P5 school *anywhere* in the pacific or mountain time zones they have to be at a Pac-12 program. It's a nice little advantage for those 12 schools.

That’s what makes this investment a good hedge. IF the West continues to grow, and IF the MWC schools continue to get frozen out, then the PAC will be on a goldmine of talent and fans at the expense of the other regions/conferences. Getting a 10th of the action would be a substantial hedge.

 

[N.Y. Orangeman]

You can just see a PE partner pushing for the addition of UCF, Cincinnati, etc. in order to maximize their investment (I can't blame them). My God; what are they thinking?

 

[supp]

Want to buy a stake in the Pac-12 Conference? It’s exploring taking on private equity partners.

Pac-12 Conference leadership pitched university presidents and chancellors a strategic plan aimed at bailing out the struggling conference and helping it keep pace with its Power Five Conference peers.

The “Pac-12 NewCo” plan was introduced to the conference presidents and chancellors at their mid-November meeting and was subsequently discussed in a conference call in December, per sources. Private investors would own 10 percent equity in the newly formed entity in exchange for a $500 million investment.

---

When you're selling a piece of your conference to private investors it makes the whole "student athlete" canard a bit more difficult to shill.

Why would anyone buy in unless there's a profit to be made? And if there is a profit to be made, how do the universities wall off athletics in a semi-privatized conference while retaining their non-profit status?

I think this is going nowhere but more importantly this idea shows how unsustainable bigtime college athletics has become. People are flinging sh#t at the wall and hoping something sticks.

 

[Rocco]

What a joke. If this happens, collegiate sports have officially ended.

Makes me even more proud that SU is a member of the ACC.

 

[Scooch]

I think this is going nowhere but more importantly this idea shows how unsustainable bigtime college athletics has become. People are flinging sh#t at the wall and hoping something sticks.

Agree that it's going nowhere.

I'm not sure that it speaks specifically to the overall unsustainability of college sports, although that may be true. I do think it speaks to (a) how terribly unwise it was for the Pac-12 to launch a cable TV network without a media partner, and (b) how much of a huge miss it was when Larry Scott couldn't land Texas and make a Pac-16.

I do fancy a future where there is a ~30 team "American Coastal Conference" with Atlantic and Pacific divisions. The conference championship game could be called the "Biggie Smalls/Tupac Shakur Classic".

 

[All4SU]

You think college sports is corrupt now? Just wait and see it if something like this catches on. Holy crap!

 

[Don]

maybe they could sell it as a naming rights which might not be a bad idea such as the Boeing Pac 12 conference for instance and they get to advertise and have there name on the championship game, otherwise selling your conference to private equity business smells like trouble

 

[CuseLegacy]

 

[MadNY3]

The underlying element of all this is that the P12 didn’t do a deal with Disney (ESPN) or FOX or even a WME IMG to handle key content issues.

It’s seeking capital the same way the YES Network, The Players Tribune and a number of Major daily pubs have: by raising outside capital.

The PR firm is an investment to help 1) drive content awareness, 2) drive up/maintain higher value of the content it has, and 3) likely serve as a defense mechanism to avoid losing a school or two to a poaching conference.

I don’t think this at all speaks to the unsustainability of college sports; if anything, the greed around it is what’s driving this. And there is a lot of private dollars out there seeking deals and this is a unique asset.

There is a legitimate play here. Not sure I’d be excited for it as a University President, but it is differentiated.

 

[Cheriehoop]

The underlying element of all this is that the P12 didn’t do a deal with Disney (ESPN) or FOX or even a WME IMG to handle key content issues.

It’s seeking capital the same way the YES Network, The Players Tribune and a number of Major daily pubs have: by raising outside capital.

The PR firm is an investment to help 1) drive content awareness, 2) drive up/maintain higher value of the content it has, and 3) likely serve as a defense mechanism to avoid losing a school or two to a poaching conference.

I don’t think this at all speaks to the unsustainability of college sports; if anything, the greed around it is what’s driving this. And there is a lot of private dollars out there seeking deals and this is a unique asset.

There is a legitimate play here. Not sure I’d be excited for it as a University President, but it is differentiated.

Could the conference and it’s pass through university members still be tax exempt and still get IRS consideration as a 501 C3 etc entity?

 

[ForCuseSake]

Want to buy a stake in the Pac-12 Conference? It’s exploring taking on private equity partners.

Pac-12 Conference leadership pitched university presidents and chancellors a strategic plan aimed at bailing out the struggling conference and helping it keep pace with its Power Five Conference peers.

The “Pac-12 NewCo” plan was introduced to the conference presidents and chancellors at their mid-November meeting and was subsequently discussed in a conference call in December, per sources. Private investors would own 10 percent equity in the newly formed entity in exchange for a $500 million investment.

---

When you're selling a piece of your conference to private investors it makes the whole "student athlete" canard a bit more difficult to shill.

I have difficulty seeing how PE ultimately cashes out.

I wonder how much control PAC 12 leadership (i.e. Presidents/BOTs) would have over how a PE firm sells its stake.

Would they have the ability to veto a deal to a foreign buyer? I'm guessing they'd vet this before taking capital but I'd guess restrictions like these would narrow the investor pool.

Might be a nice way to re-invest CalPERs cash...

 

[MadNY3]

Could the conference and it’s pass through university members still be tax exempt and still get IRS consideration as a 501 C3 etc entity?

Too smart for me!

 

[Cheriehoop]

Too smart for me!

Me too. It seems to defy the definition. From the little I know, to stay tax exempt all the profits would need to go back to benefit the non profit organization’s mission not to benefit individual shareholders with dividends etc,

 

[supp]

The underlying element of all this is that the P12 didn’t do a deal with Disney (ESPN) or FOX or even a WME IMG to handle key content issues.

It’s seeking capital the same way the YES Network, The Players Tribune and a number of Major daily pubs have: by raising outside capital.

The PR firm is an investment to help 1) drive content awareness, 2) drive up/maintain higher value of the content it has, and 3) likely serve as a defense mechanism to avoid losing a school or two to a poaching conference.

I don’t think this at all speaks to the unsustainability of college sports; if anything, the greed around it is what’s driving this. And there is a lot of private dollars out there seeking deals and this is a unique asset.

There is a legitimate play here. Not sure I’d be excited for it as a University President, but it is differentiated.

My argument on the unsustainability front would be that conference revenues and the related arms race will push many, many teams and conferences to the sidelines eventually. Not all, mind you, but many. The SEC and B1G are miles ahead of the rest right now. They have built-in advantages that others don't. Someone posted the a link to the top tv ratings week by week. The SEC and B1G dominate. And even there, it's a handful of programs in those two conferences.

College sports will continue but I think some schools in the P5 are even getting priced out of the highest levels of it.

 

[supp]

Agree that it's going nowhere.

I'm not sure that it speaks specifically to the overall unsustainability of college sports, although that may be true. I do think it speaks to (a) how terribly unwise it was for the Pac-12 to launch a cable TV network without a media partner, and (b) how much of a huge miss it was when Larry Scott couldn't land Texas and make a Pac-16.

I do fancy a future where there is a ~30 team "American Coastal Conference" with Atlantic and Pacific divisions. The conference championship game could be called the "Biggie Smalls/Tupac Shakur Classic".

All I'll say in response is mo' money, mo' problems. (Sorry, couldn't help myself).