OT: Big 12 Considering Private Investment To 1 Billion

[ashokan]

"Big 12 members are considering a first-of-its kind private equity investment to ensure the league's long-term financial and competitive security, multiple sources tell CBS Sports.

On the table is a possible cash infusion of $800 million to $1 billion from Luxembourg-based CVC Capital Partners in exchange for a 15% to 20% stake in the league, those sources said. A portion of the money would go directly to the 16 conference members, and the partnership would give the conference access to CVC's investment services and clients.

CVC is a global private equity giant that manages over $200 billion in investments worldwide, according to its website. The firm made a presentation to the league at the recent Big 12 spring meetings in Dallas."

Big 12 considering private equity investment of up to $1 billion for as much as 20% of conference

The proposed deal with a Luxembourg-based firm would bring a massive influx of cash to the league

www.cbssports.com

 

[Brisket and Bourbon]

Bold and risky…

 

[RUTGERS95]

interesting
curious what the legalities are for the public Side of this proposal

 

[Rutgers85]

 

[Brisket and Bourbon]

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That’s sad…smells of desperation…but this is a conference that lost A&M, OU, Neb, MU, Tex, and CU who came back when the PAC ship caught fire…

 

[Devilsfan118]

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Good God just let it die before doing that

 

[pmvon]

"Big 12 members are considering a first-of-its kind private equity investment to ensure the league's long-term financial and competitive security, multiple sources tell CBS Sports.

On the table is a possible cash infusion of $800 million to $1 billion from Luxembourg-based CVC Capital Partners in exchange for a 15% to 20% stake in the league, those sources said. A portion of the money would go directly to the 16 conference members, and the partnership would give the conference access to CVC's investment services and clients.

CVC is a global private equity giant that manages over $200 billion in investments worldwide, according to its website. The firm made a presentation to the league at the recent Big 12 spring meetings in Dallas."

Big 12 considering private equity investment of up to $1 billion for as much as 20% of conference

The proposed deal with a Luxembourg-based firm would bring a massive influx of cash to the league

www.cbssports.com

If the Big 12 is worth 5 billion then the BIG is worth 20 billion.

No idea how this could work and talk about jeopardizing the non profit status…..

 

[ashokan]

If the Big 12 is worth 5 billion then the BIG is worth 20 billion.

No idea how this could work and talk about jeopardizing the non profit status…..

As Deion says "everybody is chasing a bag" these days. I'm sure the non-profit thing has a shelf life.
Foreign investors have been banging on the door of US sports hard.
Billionaire owners in US aren't enough anymore.


Sports: The next frontier of foreign influence in America

Sports: The next frontier of foreign influence in America

American sports had remained one of the few sectors in American society that was largely insulated from foreign influence. Until now.

www.sportsbusinessjournal.com

The NBA is also hoping its worldwide growth helps it cash in on new media-rights deals, with 75% of the league’s viewership coming from outside the U.S.

NBA Wants to Cash in With Foreign Investors in More Ways

The league’s deputy commissioner says there is no doubt conversations are happening about new team investors.

frontofficesports.com

The NFL currently allows individual ownership only, but there has been talk of expanding the universe of potential ownership interests to counter the struggles associated with finding individuals having enough cash to buy at least 30 percent of a team from the get-go.

NBA to consider foreign investment in a team, for the first time ever

Yes, it feels inevitable that the NFL eventually will say yes to foreign investment.

www.nbcsports.com

Qatar sovereign wealth fund buys stake in Washington's NBA, NHL and WNBA teams, AP source says

Qatar sovereign wealth fund buys stake in Washington's NBA, NHL and WNBA teams, AP source says

This is believed to be the first time the government of Qatar is investing in U.S. professional sports.

www.cbsnews.com

 

[chiphi80]

As someone who has worked for, and been acquired by, private equity, there will be no good outcome for the Big12 if they take that investment.

PE is solely focused on making money, which is their job. But if something goes awry they will typically do what they need to protect their investment. If that is detrimental to the conference, so be it.

I've seen it a number of times.

 

[RUTGERS95]

As someone who has worked for, and been acquired by, private equity, there will be no good outcome for the Big12 if they take that investment.

PE is solely focused on making money, which is their job. But if something goes awry they will typically do what they need to protect their investment. If that is detrimental to the conference, so be it.

I've seen it a number of times.

agree 100%

think Les Grossman lol

 

[Joey Bags]

Wait until the Saudis show up. The Big Aramco Conference.

**** this

 

[angmo]

Universities should not be running professional sports teams. It's delusional to think they are equipped to do so.

Like it or not, it's moving to full on pro leagues. Universities will have to divest and license out their names and other IP. They will also rent the facilities and have some financial interest in the pro sports teams, but the sharks are circling.

Universities are in way over their heads and everybody knows it.

 

[pmvon]

The difference is the non profit status. Rutgers has a 5 billion operating budget with no profit. Sports is 100 million. Nothing in the grand theme. Important but not at all when considering the non profit status.

 

[MADHAT1]

Looks like the players aren't the only ones going after NIL money

 

[rutgersguy1]

Saw that yesterday plus it and a few G5 conferences are exploring selling the naming rights for their leagues.

Naming rights is palatable even if you get some corporate name but I’d watch selling equity in the league. What may seem good now may not be in the future.

 

[Ridge 22]

So if the PE firms get XX% ownership, does that also mean they receive a proportionate share of the media rights? If so, the schools accomplished nothing more than frontloading the cash flows

 

[GoodOl'Rutgers]

interesting
curious what the legalities are for the public Side of this proposal

yeah.. weird stuff. But a recent answer in a thread mentioning PSU's status as a "private" public university makes me wonder how common such things are. And the ability for what I think of as PUBLIC state-owned entities to sell their assets or, in this case, to pay dividends in one way or another, to outside entities... it is just confusing.

Is this firm buying a revenue share like both member institutions get?

How does that work?

What if the conference goes belly-up or reforms?

What new barriers to conference realignment will be erected to protect this investment?

sooo many questions.

 

[Racinejake]

The difference is the non profit status. Rutgers has a 5 billion operating budget with no profit. Sports is 100 million. Nothing in the grand theme. Important but not at all when considering the non profit status.

It would be simple enough to carve out athletic departments as separate, for profit endeavors subject to tax. Concept of Unrelated Business Income (UBI) in the non-profit world and seems to fit squarely with college athletics in its current form.

 

[RUTGERS95]

yeah.. weird stuff. But a recent answer in a thread mentioning PSU's status as a "private" public university makes me wonder how common such things are. And the ability for what I think of as PUBLIC state-owned entities to sell their assets or, in this case, to pay dividends in one way or another, to outside entities... it is just confusing.

Is this firm buying a revenue share like both member institutions get?

How does that work?

What if the conference goes belly-up or reforms?

What new barriers to conference realignment will be erected to protect this investment?

sooo many questions.

can't imagine the issues this could lead to. As we are seeing in the ACC break up, state's have rights over aid and assets and that contracts for revenue sharing to outside private enterprise, are clearly open to litigation regardless of contract or long standing affiliation.

bold move by B12 but PE won't care if the coach has a 5yr plan

 

[RUTGERS95]

It would be simple enough to carve out athletic departments as separate, for profit endeavors subject to tax. Concept of Unrelated Business Income (UBI) in the non-profit world and seems to fit squarely with college athletics in its current form.

RU does NOT want that because then it's easier to get rid of 'less desirables'

 

[pmvon]

It would be simple enough to carve out athletic departments as separate, for profit endeavors subject to tax. Concept of Unrelated Business Income (UBI) in the non-profit world and seems to fit squarely with college athletics in its current form.

Except they pay tax on a money losing business for most. And increasingly so as now they have to pay athletes. Consider every other sport dead as only football and basketball would survive.

 

[Scarlet Jerry]

This is a bad idea all around, and one where Congress may actually have a useful and appropriate role to ban that kind of investment.

 

[Brisket and Bourbon]

This is a bad idea all around, and one where Congress may actually have a useful and appropriate role to ban that kind of investment.

This is hilarious considering how much shady insider investment goes on DAILY by those clowns. It’s like asking Oscar Meyer to come up with vegan non-dairy guidelines! 😆😆😆😆😆😆😆

 

[NickRU714]

Except they pay tax on a money losing business for most. And increasingly so as now they have to pay athletes. Consider every other sport dead as only football and basketball would survive.

Nothing is stopping Universities (and taxpayers) from continuing to fund every other sport.
If these sports are such a crucial part of the university mission, then keep spending on them.

 

[NickRU714]

It would be simple enough to carve out athletic departments as separate, for profit endeavors subject to tax. Concept of Unrelated Business Income (UBI) in the non-profit world and seems to fit squarely with college athletics in its current form.

Two Athletic Departments.

One for CFB/CBB (funded by conference money)
One for all other sports funded by the Universities (and perhaps a nominal amount of conference money)

 

[koleszar]

This is a bad idea all around, and one where Congress may actually have a useful and appropriate role to ban that kind of investment.

If a Conference or University is dumb enough to get involved with a Private Equity firm, they deserve to be sold off piecemeal till there's nothing left on the rotting carcass. It's like making a deal with the devil, eventually your soul will come due.

 

[RU Cheese]

If the Big 12 is worth 5 billion then the BIG is worth 20 billion.

No idea how this could work and talk about jeopardizing the non profit status…..

Well if the numbers in report are accurate, the investment reflects a B1G valuation of 5-6B.