B1G considering $2B private equity deal

[BamaNation]

Sources: Big Ten mulling $2B private capital deal

The Big Ten is in talks about a private capital deal, which includes a 10-year grant of rights extension through 2046, that would infuse at least $2 billion into the league and its schools, sources told ESPN.

www.espn.com

If this is the way, P4 need to immediately remove themselves from NCAA and create their own structure and go for $10+B. The cash is out there. But no way should one conference be allowed to do this on its own.

 

[CB4]

Sources: Big Ten mulling $2B private capital deal

The Big Ten is in talks about a private capital deal, which includes a 10-year grant of rights extension through 2046, that would infuse at least $2 billion into the league and its schools, sources told ESPN.

www.espn.com

If this is the way, P4 need to immediately remove themselves from NCAA and create their own structure and go for $10+B. The cash is out there. But no way should one conference be allowed to do this on its own.

I think we knew this would be the next beast to raise its head in college athletics.

 

[smokies1]

has private equity ever improved a product?

 

[Elefantman]

That's what this sport needs. More money grubbing jackwagons who's only interested in preserving the amateur aspect of competition.​

 

[4Q Basket Case]

$2 Billion for a 5% share.

If you assume a 9% cost of capital and a 4% growth rate, that values the B1G’s athletic departments at a total of $2B/(.09-.04).

Or $2B/.05. Or $40 Billion dollars.

Each school gives up 5% of what they would have otherwise received, in perpetuity, in exchange for a one-time payment today of $2B/19, or roughly $105M

Each.

Yeah, that’s a game-changer. The good news is that the SEC is the only other conference that can truly play that game at that level.

The bad news is that the suits are at the table. And even though they have only a 5% interest, they know how to play the legalities to have an outsized influence.

This makes the NFL look simple.

 

[KrAzY3]

If I understand the math correctly, this essentially values Big 10 teams programs at an average of 2 billion each? That part doesn't make sense. The financials aside though, there's another huge potential complication here.

I think this could really complicate future expansion for the conference. First off, the private equity investor is not going to want to have their share diluted. So, they're going to want to own 5% no matter if there's 18 other programs or 30 other programs. This would become a bigger deal the more programs join, as the piece of the pie shrink even further.

On the other end, most major programs are not going to want to join a conference where the other teams have that 100 million windfall advantage over them while their piece of the pie remains 95% of what it otherwise would be.

Also, the 100 million isn't really as big a deal as it sounds like at first glance, at least not for a major program. Alabama football alone makes more than that in one year, so if a program is desperate it's a big deal but otherwise it's basically a coaches buyout or something.

 

[RammerJammer14]

I hate that Supreme Court decision more and more every week. Just nuked collegiate everything.