Smoke your cigars and enjoy the band while you can....

[deputy dawg]

TBH, I'm missing the downside here.  We're already doing stupid crap like playing non-saturday games and adding UCF and Cincinnati and giving up home games to play in Dallas and Ireland. 

Frankly, I'm surprised and a little flattered that someone still think we have a soul to buy at all.

If we're letting private equity buy 20% of the conference, doesn't that mean they are entitled to 20% of all future revenue? How are we supposed to remain viable that way when our revenue is already lower to begin with? Seems like it's only a good deal for the first few years until the cash is spent.

For the first few years, barring flagrant irresponsible spending by the conference, the Big 12 will have some mighty tempting cash reserves that might make us an attractive target for acquisition (for the $$$), and subsequent dismantlement (jettisoning members not performing from a revenue standpoint).  How this might be effected is beyond me, but so was private equity investment in a collegiate sports conference until about 2 weeks ago.

[DQ12]

TBH, I'm missing the downside here.  We're already doing stupid crap like playing non-saturday games and adding UCF and Cincinnati and giving up home games to play in Dallas and Ireland. 

Frankly, I'm surprised and a little flattered that someone still think we have a soul to buy at all.

getting PE money seems like a foolish short-term play.

Help me understand why?  What should i be afraid of if i'm a fan of the Allstate 12?

Does PE need to be involved to get money from a sponsor? I thought I was pretty clear that I was ok with a sponsor.

Generally my experience is that PE will make every decision based on what is most profitable for the PE firm in the short term, with little to no regard on the long term health of the the entities/people/institutions they invest in. I don't know specifically what harm they could do, but I know they will do whatever they can to maximize their profit.

Yeah, I guess that's where my question is.  I don't have a problem with them trying to maximize their profit -- we've already showed we can slut it up with the best of them to maximize our profit (shout out to our great partners at Aer Lingus!).  So i'm not entirely sure what exactly we're supposed to be afraid of with the PE bogeyman.

If someone was like "well you see, if PE gets involved they could make X change and there's nothing the conference schools could do about it" then that would be one thing.  But the "bad things could happen" warnings right now seem so vague that it's hard for me to really appreciate the risk.

If the risk is "our rights could be worth more than they're willing to pay," it's like, well yeah, maybe.  Or they could be worth less?  I'm just some idiot guy, none of us know how much they're actually worth.

[michigancat]

TBH, I'm missing the downside here.  We're already doing stupid crap like playing non-saturday games and adding UCF and Cincinnati and giving up home games to play in Dallas and Ireland. 

Frankly, I'm surprised and a little flattered that someone still think we have a soul to buy at all.

getting PE money seems like a foolish short-term play.

Help me understand why?  What should i be afraid of if i'm a fan of the Allstate 12?

Does PE need to be involved to get money from a sponsor? I thought I was pretty clear that I was ok with a sponsor.

Generally my experience is that PE will make every decision based on what is most profitable for the PE firm in the short term, with little to no regard on the long term health of the the entities/people/institutions they invest in. I don't know specifically what harm they could do, but I know they will do whatever they can to maximize their profit.

Yeah, I guess that's where my question is.  I don't have a problem with them trying to maximize their profit -- we've already showed we can slut it up with the best of them to maximize our profit (shout out to our great partners at Aer Lingus!).  So i'm not entirely sure what exactly we're supposed to be afraid of with the PE bogeyman.

If someone was like "well you see, if PE gets involved they could make X change and there's nothing the conference schools could do about it" then that would be one thing.  But the "bad things could happen" warnings right now seem so vague that it's hard for me to really appreciate the risk.

If the risk is "our rights could be worth more than they're willing to pay," it's like, well yeah, maybe.  Or they could be worth less?  I'm just some idiot guy, none of us know how much they're actually worth.

I think I've said at least three times I'm not worried about taking ad money or "slutting it up". (I don't know why you're so upset about Ireland but whatever). I'm worried about something like what GoSP said.

"Hey, we have the KC market covered with KU - why are we paying Kansas State?" Maybe they get creative with payouts in a way that doesn't benefit us? Try to dissolve the GoR to maximize profits? Sell the largest market teams to another conference?

who knows, though. I mean I didn't even realize you could buy a share in a college athletics conference before today though so LOL. I'm just a dumb guy who has worked with PE-owned companies and saw them find creative ways to make my personal situation worse that I didn't expect.

[DQ12]

TBH, I'm missing the downside here.  We're already doing stupid crap like playing non-saturday games and adding UCF and Cincinnati and giving up home games to play in Dallas and Ireland. 

Frankly, I'm surprised and a little flattered that someone still think we have a soul to buy at all.

getting PE money seems like a foolish short-term play.

Help me understand why?  What should i be afraid of if i'm a fan of the Allstate 12?

Does PE need to be involved to get money from a sponsor? I thought I was pretty clear that I was ok with a sponsor.

Generally my experience is that PE will make every decision based on what is most profitable for the PE firm in the short term, with little to no regard on the long term health of the the entities/people/institutions they invest in. I don't know specifically what harm they could do, but I know they will do whatever they can to maximize their profit.

Yeah, I guess that's where my question is.  I don't have a problem with them trying to maximize their profit -- we've already showed we can slut it up with the best of them to maximize our profit (shout out to our great partners at Aer Lingus!).  So i'm not entirely sure what exactly we're supposed to be afraid of with the PE bogeyman.

If someone was like "well you see, if PE gets involved they could make X change and there's nothing the conference schools could do about it" then that would be one thing.  But the "bad things could happen" warnings right now seem so vague that it's hard for me to really appreciate the risk.

If the risk is "our rights could be worth more than they're willing to pay," it's like, well yeah, maybe.  Or they could be worth less?  I'm just some idiot guy, none of us know how much they're actually worth.

I think I've said at least three times I'm not worried about taking ad money or "slutting it up". (I don't know why you're so upset about Ireland but whatever). I'm worried about something like what GoSP said.

"Hey, we have the KC market covered with KU - why are we paying Kansas State?" Maybe they get creative with payouts in a way that doesn't benefit us? Try to dissolve the GoR to maximize profits? Sell the largest market teams to another conference?

who knows, though. I mean I didn't even realize you could buy a share in a college athletics conference before today though so LOL. I'm just a dumb guy who has worked with PE-owned companies and saw them find creative ways to make my personal situation worse that I didn't expect.

I'm not upset about ireland -- it just seems like that's the type of stuff that it would make sense for people to be afraid of with PE (i.e. selling home games to foreign countries).

I would be very surprised if a party with a 20% interest could cut a team's interest rights or sell them to another conference.  But I guess, yeah if we made that possible for them I would be very much against that (except for UCF/Cincy...we can sell them imo).

[Rage Against the McKee]

Maybe Allstate will work with us to get rid of all of the schools that don't have State in their name.

[Spracne]

TBH, I'm missing the downside here.  We're already doing stupid crap like playing non-saturday games and adding UCF and Cincinnati and giving up home games to play in Dallas and Ireland. 

Frankly, I'm surprised and a little flattered that someone still think we have a soul to buy at all.

getting PE money seems like a foolish short-term play.

Help me understand why?  What should i be afraid of if i'm a fan of the Allstate 12?

Does PE need to be involved to get money from a sponsor? I thought I was pretty clear that I was ok with a sponsor.

Generally my experience is that PE will make every decision based on what is most profitable for the PE firm in the short term, with little to no regard on the long term health of the the entities/people/institutions they invest in. I don't know specifically what harm they could do, but I know they will do whatever they can to maximize their profit.

Yeah, I guess that's where my question is.  I don't have a problem with them trying to maximize their profit -- we've already showed we can slut it up with the best of them to maximize our profit (shout out to our great partners at Aer Lingus!).  So i'm not entirely sure what exactly we're supposed to be afraid of with the PE bogeyman.

If someone was like "well you see, if PE gets involved they could make X change and there's nothing the conference schools could do about it" then that would be one thing.  But the "bad things could happen" warnings right now seem so vague that it's hard for me to really appreciate the risk.

If the risk is "our rights could be worth more than they're willing to pay," it's like, well yeah, maybe.  Or they could be worth less?  I'm just some idiot guy, none of us know how much they're actually worth.

I think I've said at least three times I'm not worried about taking ad money or "slutting it up". (I don't know why you're so upset about Ireland but whatever). I'm worried about something like what GoSP said.

"Hey, we have the KC market covered with KU - why are we paying Kansas State?" Maybe they get creative with payouts in a way that doesn't benefit us? Try to dissolve the GoR to maximize profits? Sell the largest market teams to another conference?

who knows, though. I mean I didn't even realize you could buy a share in a college athletics conference before today though so LOL. I'm just a dumb guy who has worked with PE-owned companies and saw them find creative ways to make my personal situation worse that I didn't expect.

I'm trying to wrap my head around the legal structure and consequences of selling 20% of a college athletics conference. What type of legal entity even is the Big 12? Is it a corporation? Partnership? LLC? Who "owns" the Big 12 and has the right to sell property interests? I assume there is some form of charter/bylaws/company agreement. What is the process for changing them? I assume a certain threshold of members would have to agree to give up a portion of their payouts. I'm realizing I know very little about how this is all set up ...

[michigancat]

TBH, I'm missing the downside here.  We're already doing stupid crap like playing non-saturday games and adding UCF and Cincinnati and giving up home games to play in Dallas and Ireland. 

Frankly, I'm surprised and a little flattered that someone still think we have a soul to buy at all.

getting PE money seems like a foolish short-term play.

Help me understand why?  What should i be afraid of if i'm a fan of the Allstate 12?

Does PE need to be involved to get money from a sponsor? I thought I was pretty clear that I was ok with a sponsor.

Generally my experience is that PE will make every decision based on what is most profitable for the PE firm in the short term, with little to no regard on the long term health of the the entities/people/institutions they invest in. I don't know specifically what harm they could do, but I know they will do whatever they can to maximize their profit.

Yeah, I guess that's where my question is.  I don't have a problem with them trying to maximize their profit -- we've already showed we can slut it up with the best of them to maximize our profit (shout out to our great partners at Aer Lingus!).  So i'm not entirely sure what exactly we're supposed to be afraid of with the PE bogeyman.

If someone was like "well you see, if PE gets involved they could make X change and there's nothing the conference schools could do about it" then that would be one thing.  But the "bad things could happen" warnings right now seem so vague that it's hard for me to really appreciate the risk.

If the risk is "our rights could be worth more than they're willing to pay," it's like, well yeah, maybe.  Or they could be worth less?  I'm just some idiot guy, none of us know how much they're actually worth.

I think I've said at least three times I'm not worried about taking ad money or "slutting it up". (I don't know why you're so upset about Ireland but whatever). I'm worried about something like what GoSP said.

"Hey, we have the KC market covered with KU - why are we paying Kansas State?" Maybe they get creative with payouts in a way that doesn't benefit us? Try to dissolve the GoR to maximize profits? Sell the largest market teams to another conference?

who knows, though. I mean I didn't even realize you could buy a share in a college athletics conference before today though so LOL. I'm just a dumb guy who has worked with PE-owned companies and saw them find creative ways to make my personal situation worse that I didn't expect.

I'm trying to wrap my head around the legal structure and consequences of selling 20% of a college athletics conference. What type of legal entity even is the Big 12? Is it a corporation? Partnership? LLC? Who "owns" the Big 12 and has the right to sell property interests? I assume there is some form of charter/bylaws/company agreement. What is the process for changing them? I assume a certain threshold of members would have to agree to give up a portion of their payouts. I'm realizing I know very little about how this is all set up ...

https://big12sports.com/documents/2023/1/2/Handbook_v_2_01_02_2023_.pdf

Tldnr

[Kat Kid]

I think it is possible that some athletic directors, university presidents and Brett Yormark will outsmart Wall Street types on a business deal because the Wall Street guys are too greedy and are missing something about our valuation. But I think hoping for a mutually beneficially long term relationship or taking advantage of those Wall Street suckers is delusional at worst and the bargaining stage at best.

[Spracne]

So it's a Delaware corporation. I'm not going to read further to figure out who legally "owns" it and whatnot. I'm also not going to pay the $20 to retrieve the certificate of incorporation.

[michigancat]

TBH, I'm missing the downside here.  We're already doing stupid crap like playing non-saturday games and adding UCF and Cincinnati and giving up home games to play in Dallas and Ireland. 

Frankly, I'm surprised and a little flattered that someone still think we have a soul to buy at all.

getting PE money seems like a foolish short-term play.

Help me understand why?  What should i be afraid of if i'm a fan of the Allstate 12?

Does PE need to be involved to get money from a sponsor? I thought I was pretty clear that I was ok with a sponsor.

Generally my experience is that PE will make every decision based on what is most profitable for the PE firm in the short term, with little to no regard on the long term health of the the entities/people/institutions they invest in. I don't know specifically what harm they could do, but I know they will do whatever they can to maximize their profit.

Yeah, I guess that's where my question is.  I don't have a problem with them trying to maximize their profit -- we've already showed we can slut it up with the best of them to maximize our profit (shout out to our great partners at Aer Lingus!).  So i'm not entirely sure what exactly we're supposed to be afraid of with the PE bogeyman.

If someone was like "well you see, if PE gets involved they could make X change and there's nothing the conference schools could do about it" then that would be one thing.  But the "bad things could happen" warnings right now seem so vague that it's hard for me to really appreciate the risk.

If the risk is "our rights could be worth more than they're willing to pay," it's like, well yeah, maybe.  Or they could be worth less?  I'm just some idiot guy, none of us know how much they're actually worth.

I think I've said at least three times I'm not worried about taking ad money or "slutting it up". (I don't know why you're so upset about Ireland but whatever). I'm worried about something like what GoSP said.

"Hey, we have the KC market covered with KU - why are we paying Kansas State?" Maybe they get creative with payouts in a way that doesn't benefit us? Try to dissolve the GoR to maximize profits? Sell the largest market teams to another conference?

who knows, though. I mean I didn't even realize you could buy a share in a college athletics conference before today though so LOL. I'm just a dumb guy who has worked with PE-owned companies and saw them find creative ways to make my personal situation worse that I didn't expect.

I'm trying to wrap my head around the legal structure and consequences of selling 20% of a college athletics conference. What type of legal entity even is the Big 12? Is it a corporation? Partnership? LLC? Who "owns" the Big 12 and has the right to sell property interests? I assume there is some form of charter/bylaws/company agreement. What is the process for changing them? I assume a certain threshold of members would have to agree to give up a portion of their payouts. I'm realizing I know very little about how this is all set up ...

https://big12sports.com/documents/2023/1/2/Handbook_v_2_01_02_2023_.pdf

Tldnr

Looks like it's a nonprofit

https://projects.propublica.org/nonprofits/organizations/752604555

(That pays tim weiser $800k/year??????!!!!!!!)

[star seed 7]

I think it is possible that some athletic directors, university presidents and Brett Yormark will outsmart Wall Street types on a business deal because the Wall Street guys are too greedy and are missing something about our valuation. But I think hoping for a mutually beneficially long term relationship or taking advantage of those Wall Street suckers is delusional at worst and the bargaining stage at best.

Well said kk

[Spracne]

TBH, I'm missing the downside here.  We're already doing stupid crap like playing non-saturday games and adding UCF and Cincinnati and giving up home games to play in Dallas and Ireland. 

Frankly, I'm surprised and a little flattered that someone still think we have a soul to buy at all.

getting PE money seems like a foolish short-term play.

Help me understand why?  What should i be afraid of if i'm a fan of the Allstate 12?

Does PE need to be involved to get money from a sponsor? I thought I was pretty clear that I was ok with a sponsor.

Generally my experience is that PE will make every decision based on what is most profitable for the PE firm in the short term, with little to no regard on the long term health of the the entities/people/institutions they invest in. I don't know specifically what harm they could do, but I know they will do whatever they can to maximize their profit.

Yeah, I guess that's where my question is.  I don't have a problem with them trying to maximize their profit -- we've already showed we can slut it up with the best of them to maximize our profit (shout out to our great partners at Aer Lingus!).  So i'm not entirely sure what exactly we're supposed to be afraid of with the PE bogeyman.

If someone was like "well you see, if PE gets involved they could make X change and there's nothing the conference schools could do about it" then that would be one thing.  But the "bad things could happen" warnings right now seem so vague that it's hard for me to really appreciate the risk.

If the risk is "our rights could be worth more than they're willing to pay," it's like, well yeah, maybe.  Or they could be worth less?  I'm just some idiot guy, none of us know how much they're actually worth.

I think I've said at least three times I'm not worried about taking ad money or "slutting it up". (I don't know why you're so upset about Ireland but whatever). I'm worried about something like what GoSP said.

"Hey, we have the KC market covered with KU - why are we paying Kansas State?" Maybe they get creative with payouts in a way that doesn't benefit us? Try to dissolve the GoR to maximize profits? Sell the largest market teams to another conference?

who knows, though. I mean I didn't even realize you could buy a share in a college athletics conference before today though so LOL. I'm just a dumb guy who has worked with PE-owned companies and saw them find creative ways to make my personal situation worse that I didn't expect.

I'm trying to wrap my head around the legal structure and consequences of selling 20% of a college athletics conference. What type of legal entity even is the Big 12? Is it a corporation? Partnership? LLC? Who "owns" the Big 12 and has the right to sell property interests? I assume there is some form of charter/bylaws/company agreement. What is the process for changing them? I assume a certain threshold of members would have to agree to give up a portion of their payouts. I'm realizing I know very little about how this is all set up ...

https://big12sports.com/documents/2023/1/2/Handbook_v_2_01_02_2023_.pdf

Tldnr

Looks like it's a nonprofit

https://projects.propublica.org/nonprofits/organizations/752604555

(That pays tim weiser $800k/year??????!!!!!!!)

I wonder if it's a not-for-profit membership association, like AAA.

[Rage Against the McKee]

https://twitter.com/QuikTrip/status/1801284756572672399?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1801284756572672399%7Ctwgr%5E0bff0bdbb148d0f8bdee030e3d9d954461ac67f0%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.surlyhorns.com%2Fboard%2Findex.php%3Fapp%3Dcoremodule%3Dsystemcontroller%3Dembedurl%3Dhttps%3A%2F%2Fx.com%2FQuikTrip%2Fstatus%2F1801284756572672399

[Winters]

Mods, please change Dlew12 to the Monterey chicken burrito 12 presented by Jose peppers

Okay

[cfbandyman]

Like, I'm fine with the adverts, and trying to squeeze cash where you can, I just don't want it to be selling naming right to the conference. They can be presented by, or the exclusive partner of, or whatever just let's not be changing an identity thing. I don't care if it ends up like a nascar level of sponsorships and tiers and crap, just keep the naming consistent.

[michigancat]

I think it is possible that some athletic directors, university presidents and Brett Yormark will outsmart Wall Street types on a business deal because the Wall Street guys are too greedy and are missing something about our valuation. But I think hoping for a mutually beneficially long term relationship or taking advantage of those Wall Street suckers is delusional at worst and the bargaining stage at best.

Well said kk

Yes. It's just absurd. I could wrap my head around taking on PE investment if the league were truly dying, but I didn't think it is. Permanent second tier? Probably. But not dying, and this doesn't put us in the first tier long term. Maybe but even short term

[Houstoncat93]

I think it is possible that some athletic directors, university presidents and Brett Yormark will outsmart Wall Street types on a business deal because the Wall Street guys are too greedy and are missing something about our valuation. But I think hoping for a mutually beneficially long term relationship or taking advantage of those Wall Street suckers is delusional at worst and the bargaining stage at best.

Well said kk

PE money is a short term cash influx to meet our new $20M per year payroll.  It is not a fix but let's us kick the can down the road until (hopefully) we find a long-term fix.  I get the need from the conference perspective.  I don't see how the PE guys are going to make money since they are essentially buying 20% of the holding company when the real value is in the schools.

Yes. It's just absurd. I could wrap my head around taking on PE investment if the league were truly dying, but I didn't think it is. Permanent second tier? Probably. But not dying, and this doesn't put us in the first tier long term. Maybe but even short term

[pissclams]

the only way I could see an equitable relationship between the league and a PE partner would be through a revenue sharing agreement that essentially expands our marketing and sponsorship strategy beyond what the league is currently capable of. 

i’ve have a lot of experience in private equity, as do others here, and can safely say that the introduction of PE into ownership rarely benefits more than one party.

[wetwillie]

Why don't we just sell the naming rights to all state without dicking around with PE

[Spracne]

Why don't we just sell the naming rights to all state without dicking around with PE

Because it's much less money. I've gotten to the point that I don't give a crap, anymore. The veil has been lifted. The scales have been removed from my eyes. It would be kinda clever to be the Allstate 12, considering how spread out we are, now. Smoke your cigars and enjoy the band, indeed. (Btw, one of the best thread titles in history.)

[KITNfury]

Why don't we just sell the naming rights to all state without dicking around with PE

Because it's much less money. I've gotten to the point that I don't give a crap, anymore. The veil has been lifted. The scales have been removed from my eyes. It would be kinda clever to be the Allstate 12, considering how spread out we are, now. Smoke your cigars and enjoy the band, indeed. (Btw, one of the best thread titles in history.)

Maybe Nationwide would be interested

[Pete]

the only way I could see an equitable relationship between the league and a PE partner would be through a revenue sharing agreement that essentially expands our marketing and sponsorship strategy beyond what the league is currently capable of. 

i’ve have a lot of experience in private equity, as do others here, and can safely say that the introduction of PE into ownership rarely benefits more than one party.

Owners get quick cash, staff gets manipulated and mumped over. That’s been my experience.

[michigancat]

I'm mildly surprised no one has put out a good explainer of how this would fundamentally work. But it looks like the same PE firm invested 2billion Euros into La Liga in exchange for 8% of TV revenue over 50 years. So they probably wouldn't actually have ownership of the Big 12, but a share of our media rights over time.

https://www.forbes.com/sites/vitascarosella/2024/03/26/cvc-deal-helps-laliga-clubs-score-financially/

They tried to do the same with the Bundesliga but it got shut down by fan protests:

https://apnews.com/article/bundesliga-investor-protests-a0c43c0f08de6c26248ba8b1aacde8ec

I don't know. seems fishy

[chum1]

What are we going to do with that new money? What are the Big Ten and SEC going to do with their new money? How does that money help us stay competitive with them? What does staying competitive with them even mean here?

[michigancat]

What are we going to do with that new money? What are the Big Ten and SEC going to do with their new money? How does that money help us stay competitive with them? What does staying competitive with them even mean here?

I'm assuming a chunk of it will go to NIL but the bulk of it will be infrastructure improvements to suck more money from fans

Here's what La Liga did:

As part of the project, teams are allowed to spend up to 70 per cent of funding from the total investment on infrastructure. Meanwhile, 15 per cent of the remaining pool will be allocated to servicing debt, with the other 15 per cent to be used on signing players.

Speaking at a media roundtable, Jaime Blanco Manrique, head of clubs office for LaLiga, noted that the league has kept the remaining amount of the funds sent by CVC.

“LaLiga has [retained] around 20 per cent of the total funds, because those funds are not freely distributed to the clubs,” he said. “The clubs need to present us a development plan, they need to present us with initiatives and evidence of what they want to do.

“The clubs office then evaluates those initiatives, and if it’s all correct, and with the spirit of [LaLiga Impulso], the funds are transferred to the clubs.

“We want the clubs to spend the funds properly. Those funds need to have a return because they have to generate more funds, more income etc. We’re talking that almost 100 per cent of the funds that need to be distributed to the clubs, it will all be focused on growth.”

https://www.sportspromedia.com/news/laliga-impulso-cvc-investment-infrastructure-real-betis/