Big Ten and other Conference Expansion

[TampaBuckeyes]

20 years is a long fucking time. The investors are hoping for the current valuation trend in media rights to continue on their current trajectory. In which case they will make a large fortune. The fact that this deal is coming tells me the schools think we may be in a bubble and are trying to capitalize.

The ACC thought similarly when they signed a 30 year contract in 2013.

 

[CincyInterloper]

You are mixing the concepts of debt and equity. There is no note or bond or any of those kind of structures (from what we know and what makes logical sense). It's equity.

You hit the key right here:


It won't be forever because the investor wants to make a profit sometime in the next 3-5 years most likely. Different groups have different time lines.

I think it's important for people to really see this as a win for the "academic" side of the University house. Keeping it very high level-you have two businesses in one. The "school side of all these places and the "sports" side, let's call it.

By doing it this way, you are keeping all risk, any kind of contagion from a blow up in sports, firewalled away from the "school" side of the balance sheet. The same concept applies when people ask why do it this way. If you don't go get the money this way then you have to borrow it or take it from the school side of the ledger. Borrowing would indeed create the nightmare scenario a lot of people are expressing here in which school side assets get put at risk for sports side borrowing.

This is a win for the school side and for the record, I very much believe in and hope we continue to see them go this way. I've been on record many times saying they should split sports off entirely. The University mission is far mar important (and bigger money) so sports shouldn't be out there as a possible risk t it.

Well, now we are seeing that play out in a way. This new venture is keeping sports from hurting school.

Yeah, but if the sports side tanks, do you think the university will let the sports side fail (whatever that looks like), or will they bail it out? They may be separated legally, but I think the reality is a bit different.

 

[Steve19]

I think that the likelihood is VERY low that universities would step in to support the sports administration project tanks. The press is up in arms about this in Pennsylvania. Stories highlight that the $49 million buyout is the second-largest in college football history. Under the leadership of Neeli Bendapudi (one-time Fisher College marketing professor), Penn State has been on a cost-cutting campaign that includes the closure of seven branch campuses, due to enrollment and financial challenges. The buyout has inflamed prominent faculty criticism of the University's misplaced priorities, especially given recent budget cuts to campuses and Bendapudi's own recent 47% pay raise. Critics argue the $50 million could have supported struggling campuses, students, and local communities, bringing the disconnect between University financial decisions and the needs of students and staff into the spotlight.

A storm that will disappear? Maybe, but as student fees go up and faculty research funds are impacted already in the politics of the time, there may be another storm brewing.

 

[Mike80]

RE: Ped State - Fuck em. They made their bed with JoePed. Karma.