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- Thread starter Mike80
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5.8 million per school per year seems like a pretty meager amount to let an investor own 1/20th of the revenue for a league that just keeps exploding, and has the potential to level up further once apple, Amazon, Notre Dame, the acc and others get involved.
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How is capital limiting B1G revenue? Reading these articles remind me of the idiocy of current “journalism”.
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The big brands have an entirely different set of real world conditions than the mid to low end brands, like any business.
Unlike the NFL and other big 4 pro sports, there isn't one unifying league brand to help those smaller teams out.
IMO, this is just another step toward the tiered super league and lower divisions thing playing out. Minnesota, Iowa and Rutgers (as examples) aren't playing the same sport as OSU, Oregon tsun when you take the programs as a whole.
As far as that article goes, it's breathtaking to me just how little sportswriters seem to understand business and finance.
The two or three big dogs have a business that doesn't need any investment capital.
The rest are straining to keep up and need the money.
So the little guys are actually asking the big guys to suffer some so the little guys can keep up with them.
Sure the big guys will throw around platitudes like quoted in the article from tsun but they don't really care about that shit. That is a public way to send the message to the little guys that "if we are going to take money we don't need and give up future revenue because of it then then we are getting a bigger cut and it's coming at your expense". The little guys may be desperate enough to strike the bad deal and then when it hurts them down the road the sportswriters and fans will clutch their pearls about the evils of big money yadda yadda yadda.
Money is a tool, like a tractor or a gun. Use them intelligently and they help you be more productive and create even more value. Use them like a fucking moron and you'll likely end up killing yourself.
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osuvictory1
Just a schlub from Y-town
Would each state legislation need to pass something allowing for each university to go along with this, because there definitely seems to be risk that could potentially lead to a bail out by the state? Can a football conference declare bankruptcy, and what does that look like?
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ORD_Buckeye
Wrong glass, Sir.
Private equity is called "vulture capital" for a reason. They don't exist to build long term brand equity and value. They exist to--through a dizzying variety of schemes and mechanisms--strip mine companies of value to maximize the PE firm's short term profits. This is completely unnecessary, and nothing good will come of it. The fact that Petitti is even considering it leads me to strongly believe that he and some other prominent players are getting paid off.
As usual, I expect zero leadership and vision from Slapshot.
As usual, I expect zero leadership and vision from Slapshot.
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CincyInterloper
Hall of Fame
I'm sure they will structure any payouts to at least make it look legal, like a performance bonus for meeting some metric or some such thing, but I tend to agree with you. This sort of thing seems to happen a lot with mergers and acquisitions. The guys who negotiate the deal make out like bandits, but the end result is the combined companies have less value than they did before, and the CEO gets a golden parachute after the stock tanks.
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CincyInterloper
Hall of Fame
Nowhere. It was just intended to be another example of how deal makers make money without really creating anything.
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That is apples and oranges though.
M&A deals are done by investment bankers and they destroy value for firms at something like a 75% clip (someone probably has better data than I do). The deal makers make all the money.
VC shops are not investment banks. They typically create value (regardless of stereotypes and catchy names people give them) and in cases like this where the company doesn't really need money their capital is usually used for strategic purposes more so than day to day operational money.
Railing against anyone who makes a deal of any sort is like saying all lawyers are ambulance chasers.
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ORD_Buckeye
Wrong glass, Sir.
VC and private equity are two entirely different animals with diametrically opposed business models. VC does create value and build equity, often out of nothing more than an ambitious business plan. PE's model is to extract value from existing companies, hence the play with turning the term venture capital into vulture capital in describing them.
Their usual play is to buy into older, struggling businesses that have substantial physical or intellectual assets and strip mine those for short term profits, which makes it extremely suspicious that a very healthy profitable organization like the Big Ten would be thinking about crawling into bed with them.
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