PAC - 12 looking for investors

[The TCU Football Jerk]

ante up

https://www.oregonlive.com/sports/o...loring-taking-on-private-equity-partners.html

Want to own a piece of a major college football conference?

There may be one for sale shortly.

Pac-12 Conference leadership pitched university presidents and chancellors a strategic plan aimed at bailing out the struggling conference and helping it keep pace with its Power Five Conference peers.

The “Pac-12 NewCo” plan was introduced to the conference presidents and chancellors at their mid-November meeting and was subsequently discussed in a conference call in December, per sources. Private investors would own 10 percent equity in the newly formed entity in exchange for a $500 million investment.

 

[netty2424]

Well ok!! Now it’s time for the narrative to shift from Big12 failing to PAC12 failing.

 

[Wexahu]

ante up

https://www.oregonlive.com/sports/o...loring-taking-on-private-equity-partners.html

Want to own a piece of a major college football conference?

There may be one for sale shortly.

Pac-12 Conference leadership pitched university presidents and chancellors a strategic plan aimed at bailing out the struggling conference and helping it keep pace with its Power Five Conference peers.

The “Pac-12 NewCo” plan was introduced to the conference presidents and chancellors at their mid-November meeting and was subsequently discussed in a conference call in December, per sources. Private investors would own 10 percent equity in the newly formed entity in exchange for a $500 million investment.

I'm not smart enough to understand what this means, but conferences selling to private investors seems like a major desperation move and a terrible investment at a $5B value. Is there even any positive cash flow after expenses?

The Pac 12's problem is it's located in areas of the country where the vast majority of the people's interest in smoking pot and being weird exceeds their interest in college sports, and college football in particular. And that probably isn't changing anytime soon.

 

[froginmn]

ante up

https://www.oregonlive.com/sports/o...loring-taking-on-private-equity-partners.html

The “Pac-12 NewCo” plan was introduced to the conference presidents and chancellors at their mid-November meeting and was subsequently discussed in a conference call in December, per sources.

Pretty sure NewCo won't taste as good as original Co, and they'll bring the old one back as ClassicCo.

 

[BABYFACE]

The article didn’t give the details but how do the investors recoup their money?

If it is like invest 50 million now and pull out the 50 million in 5 years with interest, then the PAC is actually loosing money in the long run. It can’t be that they will invest the money and hope to make money after paying back the investor with interest because they said the member would have immediate access to the funds.

Without more details, this sounds like a bad deal for PAC schools. Get your money today in exchange for a lower down the road.

Unless, the equity ownership is rather a novelty that you have a piece of ownership and get some free seats and priority for PAC 12 events. Then that works for the conference, not so much for the investor.

 

[PurplFrawg]

Will it be like Green Bay Packers stock? B4P? You in?

 

[Salfrog]

Sounds like it's time for the BIG12 to be proactive and go get 2-4 teams.

 

[froginmn]

Will it be like Green Bay Packers stock? B4P? You in?

I'm sure he's already got an equity stake.

 

[Gary's Shirtless Revenge]

This would work similarly to public/private partnerships in major public use projects, such as airports. The strategic partner provides the upfront capital for use by the partnership immediately, and the partner is paid out in guaranteed dividends over XX period of time.

The fact that this was leaked, in full, to the Oregonian tells you all you need to know re: how the schools view this idea.

I've heard this is a move driven by USC primarily, supported by Larry Scott who thinks it's the only thing that can keep the conference together.

Truth be told, the Pac 12 has probably been dead/walking for a while now and they just didn't know it. I know I've said this before, but I fully expect the Pac 12 to lose two members and the Big 12 to gain two members over the next several years, with a centralized "Big 12 Network" of some kind coming right behind that. And, it isn't out of the question that one or two other Pac 12 members might jump ship for the Big 10 too... They've been talking quietly for several years.

The only way the Pac 12 moves forward with this investment is if the schools are not forced to re-up into a new grant of rights, which would mean they could take the $$ from the investment and still leave in 2-3 years... Which, as you would expect, would kill any potential of this deal ever happening.

 

[ShreveFrog]

Arizonases, Colorado, and Utah. Hello!

 

[Eight]

after the first semi-final game mack brown was filling some time by asking the other coaches some questions about college football, the cfp, etc...

this group included paul johnson who just left georgia tech, norvell at memphis, the coach at wake, and mack. mack is the only one of those four who has been the hc at a program with truly deep pockets to spend how they wish to build their programs.

mack asked if clemson and bama playing for the forth straight time would be good for college football. don't remember who gave which each, but 2 or 3 said no and 1 (believe the guy at wake) hemmed and hawed around the answer.

that question though set off a discussion that in college football today there are truly 10-12 programs who have the resources at their dispense that can spend at basically an excess level and it separates them from every other program in the country.

no one called for some type of limit on spending but it was noted there are the have's and the have not's and paul johnson went so far as to say he would be for a p5 national champion and a national championship for the group above 1-aa but not in the p5

 

[LeagueCityFrog]

Bowlsby needs to strike. I wouldn't mind the Big XII comprising of 12 members by adding Colorado, Arizona, and Arizona State and subtracting one.

 

[Portland Frog]

Well ok!! Now it’s time for the narrative to shift from Big12 failing to PAC12 failing.

Wouldn’t that be a refreshing change.

 

[netty2424]

Wouldn’t that be a refreshing change.

But then what would Aggie have to talk about?

 

[ticketfrog123]

Bowlsby needs to strike. I wouldn't mind the Big XII comprising of 12 members by adding Colorado, Arizona, and Arizona State and subtracting one.

Kicking out a member would be a legal nightmare and nearly impossible.

No state school would easily accept an invite if they have another in-state conference peer. Can’t get ASU with Arizona most likely.

This would leave Colorado and Utah as the easiest do leave behind.

Think USC would try to go independent if p12 fell apart.

 

[Eight]

Kicking out a member would be a legal nightmare and nearly impossible.

No state school would easily accept an invite if they have another in-state conference peer. Can’t get ASU with Arizona most likely.

This would leave Colorado and Utah as the easiest do leave behind.

Think USC would try to go independent if p12 fell apart.

going independent has gone so well for byu.

nd is only an independent in football and that only works because of the nbc contract.

i don't understand the logic on in-state conference peers. the two arizonia's went from the wac into the pac together

 

[BrewingFrog]

after the first semi-final game mack brown was filling some time by asking the other coaches some questions about college football, the cfp, etc...

this group included paul johnson who just left georgia tech, norvell at memphis, the coach at wake, and mack. mack is the only one of those four who has been the hc at a program with truly deep pockets to spend how they wish to build their programs.

mack asked if clemson and bama playing for the forth straight time would be good for college football. don't remember who gave which each, but 2 or 3 said no and 1 (believe the guy at wake) hemmed and hawed around the answer.

that question though set off a discussion that in college football today there are truly 10-12 programs who have the resources at their dispense that can spend at basically an excess level and it separates them from every other program in the country.

no one called for some type of limit on spending but it was noted there are the have's and the have not's and paul johnson went so far as to say he would be for a p5 national champion and a national championship for the group above 1-aa but not in the p5

That was interesting mainly to listen to Paul Johnson's answer, because he is retired. He had no need to give a "company line" reply.

 

[Eight]

That was interesting mainly to listen to Paul Johnson's answer, because he is retired. He had no need to give a "company line" reply.

paul was very entertaining and i thought his comments on the play-offs was interesting coming from georgia southern

he had as good a record against clemson as i think anyone in the acc for his 11 years without the resources of fsu and a much great academic requirement of his players

coach at wake was very careful in some of his answers

 

[CryptoMiner]

The article didn’t give the details but how do the investors recoup their money?

If it is like invest 50 million now and pull out the 50 million in 5 years with interest, then the PAC is actually loosing money in the long run. It can’t be that they will invest the money and hope to make money after paying back the investor with interest because they said the member would have immediate access to the funds.

Without more details, this sounds like a bad deal for PAC schools. Get your money today in exchange for a lower down the road.

Unless, the equity ownership is rather a novelty that you have a piece of ownership and get some free seats and priority for PAC 12 events. Then that works for the conference, not so much for the investor.

Its in the spreadsheet and over 15 years the investors break-even in 2029. A 2% return on their money. Not an attractive offer.

Initial investment of $500 million for 10% interest in NewCo. The initial investment is distributed to the programs.

NPV of cash-flow until 2034 $3,886 and total payout of $7,217. Investors get 10% or $388.6 million NPV. Their valuation uses a growth rate between 2 & 4 percent annually and a one-time payout from ESPN of $386 million upon contract renewal.

 

[Eight]

Its in the spreadsheet and over 15 years the investors break-even in 2029. A 2% return on their money. Not an attractive offer.

Initial investment of $500 million for 10% interest in NewCo. The initial investment is distributed to the programs.

NPV of cash-flow until 2034 $3,886 and total payout of $7,217. Investors get 10% or $388.6 million NPV. Their valuation uses a growth rate between 2 & 4 percent annually and a one-time payout from ESPN of $386 million upon contract renewal.

i thought their television contract expires in 2024?