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- Thread starter Mike80
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ScriptOhio
Everybody is somebody else's weirdo.
B1G denies Michigan coercion claim over PE deal
The Big Ten pushed back Tuesday on a claim by a University of Michigan regent that commissioner Tony Petitti threatened to punish the school if it refuses to support a plan that would clear the way for $2.4 billion in private investment in the league.
Big Ten denies Michigan regent coercion claim over $2B plan
The Big Ten Conference pushed back Tuesday on a claim by a University of Michigan regent that commissioner Tony Petitti threatened to punish the school if it refuses to support a plan that would clear the way for $2.4 billion in private investment in the league.Mark Bernstein, chairman of the Michigan board of regents, told The Associated Press this week that Petitti had attempted to "strong-arm" Michigan in a move he said "calls into question his continued leadership of the Big Ten Conference."
"The Big Ten conference commissioner has threatened the University of Michigan with penalties if we do not approve this deal," said Bernstein, declining to provide specifics. "Nobody pushes around the University of Michigan -- ever."
The Big Ten disputed the allegation that any school is being forced to back the plan since discussions began last year.
"After receiving interest from third party investors, we formed a working group chaired by then-President (Santa J.) Ono of the University of Michigan to explore and evaluate all options on behalf of our members and the more than 12,000 student athletes in the Big Ten," said Maryland President Darryll Pines, chair of the Big Ten Council of Presidents and Chancellors. "Since we first met in 2024, this has been a collaborative, fair and thorough process that included the University of Michigan. Any other characterization of the work of the COPC and the conference office is inaccurate.
"At Michigan's direction," he added, "the conference continues to work with a consultant retained by Michigan to evaluate the transaction."
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Zurp
I have misplaced my pants.
Is there somewhere that explains what's going on, as if I were a 5-year-old? Someone with$2.4B wants to invest in the Big Ten? Who? What do they get out of it? Who gets the money? Does it get split amount 18 teams? $130M per team? What is the downside? What is the upside?
Also, if the cheaters want to leave the conference for football, can they be kicked out for all other sports? Why do they get special treatment?
Also, if the cheaters want to leave the conference for football, can they be kicked out for all other sports? Why do they get special treatment?
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PE group wants to invest in a new entity
That new entity is (essentially) the sports tv rights/brand of the B1g ten, not the big ten academic institution we know today
In return for ~2Billion they get 10% and no operational control, B1G gets 90% and runs the show.
Both are betting together that the value of the B1G sports brand (and subsequent tv contracts) will go way up in the newly created seperate entity (again, not the B1G we all know right now).
It appears tsun and USC are saying that locking in those tv rights for 21 years is a deal breaker, and if it's that simple in reality, I completely agree.
The concept of the deal is smart and makes sense. That detail is way out of whack.
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Usually, the capital infusion is required to increase the entity’s revenue (e.g. buy tooling to increase manufacturing capacity).
I haven’t heard how the B1G will use the money. If it’s operational, it’s a failing model.
I haven’t heard how the B1G will use the money. If it’s operational, it’s a failing model.
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In this case, it keeps the sports entity from siphoning any money from the educational entity, no?
That's been the assumption I've been under as to "why take the money" from the start.
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I’m not a finance guy, but there has to be a better way of countering short term deficits than selling part of your business. Even the siphoning from the university seems better.
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Oh. I don't see it as clearing a deficit.
I see The academic B1G looking for a way to 1) capitalize on the sports money and 2) get it separated from the academic side somehow
So, you do that by creating a new entity (The B1G Sports entity) and when you do that you have to ask yourself, "how do we fund it?"
1) take money from the current entity
2) borrow
3) bring on an investor
1 and 2 both have the same bad result in which they impact the current entity's balance sheet in a negative way (less cash or more debt).
#3 is the best way to get something up off the ground, get it hydrated with enough Op Ex to make sure it can live and then share in the profits if there are any but not being obligated to pay anyone a fixed note or collateralized assets if it fails.
I'm quite sure that some of the B1G member schools are wanting the deal done o they can get some cash and get rid of the balance sheet hole that their non money making sports teams create. The others don't have that problem and are going to resist the deal and pull any levers they can in their own self interest if they are "forced" into a deal.
I still think this is what tsun and USC are doing but the reason they are claiming to use to hold it up seems valid. The PE firm asking for 21 years of contracted tv rights deals to help them be able to project better is nonsense. The inflationary forces we have in the economy today are baked in, they cannot be put back in the closet. No asset (like the B1G sports rights) is going down nor should it be locked in to todays prices for the next 21 years.
That is juts nucking futz (which tells me there is more to it because guys at this level are far too sophisticated for it to be that simple. The PE guys who can do a 2+ Billion dollar deal with the B1G are many things but stupid isn't one of them.
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Yea, this is why the lesser teams want this, the realignment security. Why we want it though, I have no idea.
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ROI seems better for lesser teams. Hell, just compare this shit to Big Noon on Fox. Guess who gets fucked over.
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