Big Ten and other Conference Expansion

[Jaxbuck]

I associate Venture Capital more with businesses that are starting out (hence a "venture"), and Private Equity with already established businesses that are bought out, made to churn out a more cheaply made inferior product while cashing in on the name recognition, and ultimately run into the ground. That's not always the case, but I think it is a fair generalization.

Every VC and PE shop out there has a particular niche. All of them have their share of success and failures.

Trying to paint them all with one stroke is like saying all research universities are the same because they just do research.

The B1G has a lot of money and a lot of really good lawyers, I am sure. They aren't going to get duped like some retiree being scammed by a rouge contractor.

 

[Jagdaddy]

Every VC and PE shop out there has a particular niche. All of them have their share of success and failures.

Trying to paint them all with one stroke is like saying all research universities are the same because they just do research.

The B1G has a lot of money and a lot of really good lawyers, I am sure. They aren't going to get duped like some retiree being scammed by a rouge contractor.

So long as the taxpayers aren’t the bag holders if it goes bad (i.e backing the credit of private debt assumption), I’m wait and see with suspicion about it. I don’t have as much confidence as you in the BIG’s competence or the ability if their counsel to make a good deal.

 

[calibuck]

Lived in Silicon Valley for a time, and actually met one of the VC guys. You guys got the essence of VCs. They listen to a number of entrepreneurs, pitch their idea of the 'next best thing', and from that, decide whether to commit capital to bring that product from conceptual to actual. VCs fund this process, and keep an eye on how well they progress. Other than money, most of the VCs are experienced businessmen/managers, and since they have skin in the game, can and do, offer 'suggestions' to the originator. Kinda like Shark Tank, only bigger. Usually, along the way, more funding is needed, called mezzanine financing, which means more capital infused, to actually produce a product, or ramp up production to take to market. All of this chips away at the founder's (and his co-founder's) equity position. To skip ahead, when the company is sold to another company, then the founder and VC's cash in on their 'Founder's Stock', usually issued at pennies a share, to cash, or shares in the acquiring company to recover/make their profit. The Private Equity (or Investment Banker) slice, is exactly what was mentioned. This is where the 'Corporate Raiders' or such step in. Companies find themselves in need of money, and really sell themselves to an acquirer, or maybe get into a situation where someone starts buying (usually at a discount) their shares. Then, (am skipping some parts) the company is dismantled by shedding the pieces/divisions/non-viable groups to other companies, keeping the core group intact. Has been called many things over the years, such as 'right sizing', downsizing. Essence is that the Sum of the parts is greater than the whole. KKR/rupert Murdoch, and others have made headlines over the years. Some sell everything, taking their profits, and others may keep the crown jewel, and run that alone. Excuse the rant, and excuse some of the above that some may take issue with, but what I remember from my MBA days. PS, my cousin had worked for at least seven of these 'start-ups', and earned a good but not great living (ultimate payout was a large number of founders shares). Have lost touch, but hope he hit it big.

 

[OregonBuckeye]

Every VC and PE shop out there has a particular niche. All of them have their share of success and failures.

Trying to paint them all with one stroke is like saying all research universities are the same because they just do research.

The B1G has a lot of money and a lot of really good lawyers, I am sure. They aren't going to get duped like some retiree being scammed by a rouge contractor.

Yeah, with how corrupt our government is and how greedy corporations are to do anything for a quick buck and ignore long term outcomes, I'm not going to put faith into the appeal to authority fallacy

 

[dragurd]

If rhis article is accurate is the the Califonia universities system Fund? They trying to buy Cal's way in?

Sources: Big Ten closes in on private equity deal

The Big Ten is approaching a vote on a private capital agreement and the formation of Big Ten Enterprises, which would infuse league schools with more than $2 billion, according to sources.

www.espn.com

 

[ORD_Buckeye]

If rhis article is accurate is the the Califonia universities system Fund? They trying to buy Cal's way in?

Sources: Big Ten closes in on private equity deal

The Big Ten is approaching a vote on a private capital agreement and the formation of Big Ten Enterprises, which would infuse league schools with more than $2 billion, according to sources.

www.espn.com

Oh man, that's bad news. We saw how arrogant and entitled the UC Regents were when we took UCLA.

 

[Jaxbuck]

Yeah, with how corrupt our government is and how greedy corporations are to do anything for a quick buck and ignore long term outcomes, I'm not going to put faith into the appeal to authority fallacy

Not really an appeal to authority.

I’m saying you have the resources to do your homework. If you get fucked, it’s on you.

 

[DZ83CK]

Yeah, with how corrupt our government is and how greedy corporations are to do anything for a quick buck and ignore long term outcomes, I'm not going to put faith into the appeal to authority fallacy

Right. Pretty common for private capital to reward executives of companies they're feeding off of with big pay days. Dave Brandon was perfectly happy to sell out his Toys R Us employees, getting a $2.8 million bonus 4 days before the company filed for bankruptcy, meanwhile bankruptcy allowed private capital to dodge paying severance money the company normally would have owed to workers. I expect there is some sort of sweetheart deal offered to Big Ten executives in order to allow private capital to take a stake in the conference.

 

[ScriptOhio]

If rhis article is accurate is the the Califonia universities system Fund? They trying to buy Cal's way in?

Sources: Big Ten closes in on private equity deal

The Big Ten is approaching a vote on a private capital agreement and the formation of Big Ten Enterprises, which would infuse league schools with more than $2 billion, according to sources.

www.espn.com

Oh man, that's bad news. We saw how arrogant and entitled the UC Regents were when we took UCLA.

Per the article:

Traditional conference functions are expected to remain with the conference. Any decision-making within Big Ten Enterprises would be controlled by the conference. The UC pension fund would receive a 10% stake in Big Ten Enterprises and hold typical minority investor rights but no direct control.

"Think of it this way -- the conference is not selling a piece of the conference," a league source told ESPN last week. "Traditional conference functions would remain 100 percent with the conference office -- scheduling, officiating and championships. The new entity being created would focus on business development, and it would include an outside investor with a small financial stake."

Just sayin': Supposedly the B1G will still be making all the decisions, etc. It's all about the money:

ESPN reported last week that a tiered structure is expected in the initial allocation of the $2 billion-plus in capital, with larger brands receiving more money. Each school, however, would receive a payout in at least the nine-figure range, sources said.

 

[DZ83CK]

There's not going to be any magic business wisdom coming here. This deal is only going to make the Big Ten more slimy. The private equity skillset includes making cheaper products & worse services, raising prices, sloughing off obligations to pay employees, shielding from liability for shoddy business practices, figuring out how to commit tax fraud the smart way, and greasing the wheels of government.

 

[Jaxbuck]

Per the article:





Just sayin': Supposedly the B1G will still be making all the decisions, etc. It's all about the money:

So a minority, non voting position for strategic initiatives?

Who could have guessed?

 

[DZ83CK]

I expect private capital to push the envelope, try and use leverage to get things done their way (i.e., to make the most money for themselves at the expense of everyone else). We'll see how things play out, but the skepticism of the industry has been well-earned.

 

[Thump]

Oh man, that's bad news. We saw how arrogant and entitled the UC Regents were when we took UCLA.

Ugh……..

 

[Thump]

Ronnie Milsap even sees this as bad news.

 

[Tomateaux Quinoa Gumbeaux]

Ronnie Milsap even sees this as bad news.

Is that bad?