Sources: Big Ten discussing $2 billion private capital deal

The Big Ten is in talks about a private capital deal, which includes a 10-year grant of rights extension through '46, that would infuse at least $2 billion, sources told ESPN.

ESPN.com

Sources: Big Ten mulling $2B private capital deal

The Big Ten is in talks about a private capital deal, which includes a 10-year grant of rights extension through 2046, that would infuse at least $2 billion into the league and its schools, sources to

Big Ten’s Latest Bad Idea: Selling Its Future for Private Capital

Talks about a $2 billion capital deal have dragged for months and lacked unanimity, but Wednesday brought a new sign of progress.

SI

Big Ten’s Latest Bad Idea: Selling Its Future for Private...

Talks about a $2 billion capital deal have dragged for months and lacked unanimity, but Wednesday brought a new sign of progress.

Is this money going to help the non revenue sports? Is it to offset the travel costs of the expanded map already in play or potentially when the league expands into the South with FSU, North Carolina, Virginia and Georgia Tech ? Why are Michigan and Ohio State potentially against this?

"If a private equity firm can create a win-win scenario where it invests, fine. But if not, it will create a win for itself first and foremost."

'nough said.

32 minutes ago, GatOrlando said:

Is this money going to help the non revenue sports? Is it to offset the travel costs of the expanded map already in play or potentially when the league expands into the South with FSU, North Carolina, Virginia and Georgia Tech ? Why are Michigan and Ohio State potentially against this?

$2 billion for media rights extension through 2046? For 100% of the media rights. Are the B1G media rights now pledged by all member schools through 2036, with the current media deal expiring in 2030?

On the surface, the deal appears to be thin, no? Future media deal projections estimate each school receiving up to $100 million a year in revenue distributions beginning in 2031. If the new deal runs through 2036, that's $600 million a member, $10.8 billion total. But, wait a minute ...

As Pete Thamel's article on ESPN notes, the equity share payment to each member would be tiered; Northwestern would not receive the same share as Ohio State. And the entity infusing the capital would own 5%, one twentieth, of Big Ten Enterprises. The conference would remain in control of its business affairs.

Now, the potential deal makes more sense. I trust Petitti and the Big Ten's investment bankers not to get taken advantage of. So-called 'Expert Journalists,' excluding Pete Thamel, whose article is explanatory rather than critical, opining that this is another bad idea from the B1G, are again clueless. (We will see an AQ PO format and PO expansion, probably sooner than later.)

Tony Petitti's goal is to keep the Big Ten together as a holistic enterprise; no need to form a Super Conference. No need to leave any program behind, while also taking into consideration that not all members, when it comes to the bottom line, are equal. Coming from a media background, another likely goal of Petitti is to own and control Big Ten broadcasts, including when football games kick off.

The B1G and other big-time college sports conferences and teams will continue to seek out new revenue sources. As the conference with the most revenue, the B1G is in the driver's seat.

AAaaannddd there it is. As soon as college football became NFL-lite "money" ideas started to be put into play by Non-football entities. Always, always seems, looks, feels positive and a greAt idea (sold to us that way), and sometimes it can be, but as Steven A pointed out that when the "profits" hit the bottom line the ONLY concern a "private equity" firm has is for themselves and their Largest investors. Maybe the B1G should have a "chat" with struggling Las Vegas and how their "partnerships" with the "private equity" firms have worked out for them so far.

Lord please let the Ducks win the "Natty" before too much of what we love About this sport, that we enjoy and follow so adamantly; gets morphed into simply another "product" to mold, control, manipulate, and bullrushed into squeezing every last penny of profit out of it by people who give an absolute rat'butt about the product that they squeeze the life out of.

Hope they know what can-O-worms they are opening and how the echos of the consequence's will become permanent and irreversible to the NFL-lite landscape.

Be careful for what you wish for.

Monkeypaw energy with this announcement.

Go Ducks.

I’m not going to dig too much into anything I have zero control over, such as how my entertainment is funded.

That being said, agreeing to anything that goes until 2046 seems completely insane on the surface imo. If you want an example, just look at how bad (moving forward) the ACC current grant of rights deal looks right now…and it still has 11 years to go.

Edited 6 hours ago6 hr by JabbaNoBargain

Beware of wolves in sheep’s clothing.

Let’s see…Private equity looks at ways they can improve the BIG 10 (they just want to make money), all you have to do is sell us equity rights, in something that is very hard to value.

The problem is that each University brings a different valuation to the table. Therefore, you immediately set up an argument over proper valuation, and distribution.

Absolutely no way this goes smoothly.

32 minutes ago, MicroBurst61 said:

AAaaannddd there it is. As soon as college football became NFL-lite "money" ideas started to be put into play by Non-football entities. Always, always seems, looks, feels positive and a greAt idea (sold to us that way), and sometimes it can be, but as Steven A pointed out that when the "profits" hit the bottom line the ONLY concern a "private equity" firm has is for themselves and their Largest investors. Maybe the B1G should have a "chat" with struggling Las Vegas and how their "partnerships" with the "private equity" firms have worked out for them so far.

Lord please let the Ducks win the "Natty" before too much of what we love About this sport, that we enjoy and follow so adamantly; gets morphed into simply another "product" to mold, control, manipulate, and bullrushed into squeezing every last penny of profit out of it by people who give an absolute rat'butt about the product that they squeeze the life out of.

Hope they know what can-O-worms they are opening and how the echos of the consequence's will become permanent and irreversible to the NFL-lite landscape.

Be careful for what you wish for.

Monkeypaw energy with this announcement.

Go Ducks.

I get your well-made point. But CFB is a hard beast to kill.

According to Fox Media Analytics president Mike Mulville, CFB viewership is up 19% year to year and 36% over the last five years.

Even amongst all of the free agent transfer portal chaos and pay-for-play concerns, CFB is a growth industry.

This seems like a huge risk that is not necessary at this time. This is something the PAC-12 should have considered when the ship was starting to sink in an effort to save the conference. This is not something the BIG should do in position No.1 among all the conferences, IMO.

This has a Goodfellas Restaurant scene vibe:

Edited 6 hours ago6 hr by GeotechDuck

38 minutes ago, MicroBurst61 said:

AAaaannddd there it is. As soon as college football became NFL-lite "money" ideas started to be put into play by Non-football entities. Always, always seems, looks, feels positive and a greAt idea (sold to us that way), and sometimes it can be, but as Steven A pointed out that when the "profits" hit the bottom line the ONLY concern a "private equity" firm has is for themselves and their Largest investors. Maybe the B1G should have a "chat" with struggling Las Vegas and how their "partnerships" with the "private equity" firms have worked out for them so far.

Lord please let the Ducks win the "Natty" before too much of what we love About this sport, that we enjoy and follow so adamantly; gets morphed into simply another "product" to mold, control, manipulate, and bullrushed into squeezing every last penny of profit out of it by people who give an absolute rat'butt about the product that they squeeze the life out of.

Hope they know what can-O-worms they are opening and how the echos of the consequence's will become permanent and irreversible to the NFL-lite landscape.

Be careful for what you wish for.

Monkeypaw energy with this announcement.

Go Ducks.

Concerns noted and understood. However, the proposed deal gives the investor(s) only a 5% stake in the to-be-formed Big Ten Enterprises through 2046. If $2B buys 5% for a fixed term only, the conference, through 2046, is valued at $40 billion.

Tony Petitti, the Big Ten, and the conference's investment bankers will not be hosed over.

The conference retains all of its governance rights. After 2046, the investor(s) one twentieth interest ends.

Well the Devil is in the details. One thing I absolutely like is that would obliterate a Super League. I'm no longer a fan of the Second P2, but millions of people are, and they matter to the future of college football if it will thrive as an institution like it thrives now.

I absolutely love the idea of "play in" games for the college playoff. But only if the field is twelve teams. The second P2 won't see much in a boost in ratings, but they'll get much needed money.

We're way past the late 1800s. CFB has been an money making business institution since the 70s. The kids were massively exploited, and now they're not. While I despise knowing 17 year olds are getting paid millions because they might be good, now any kid that can garnish a huge social media following can and should get paid.

And average players are getting paid for the time they invest in the sport. That just. Not fair, but actually a just act on the part of the universities.

Us "mummies" remember an era when integrity was an actual institution itself. Now greed, as Michael Douglas so eloquently explained, is good.

The idea that the B1G is looking at preserving itself as an institution isn't horrible, it is pragmatic. Clearly the SEC is trying to scheme everyone else. So I see nothing wrong with the B1G mapping out a future for itself.

We'll have to scour the details to determine if they pulled off a wise move. If course it's no surprise seeing Ohio State and Michigan trying to rule things. Methinks OBD need to win this conference five years straight so they recognize a new sheriff is in town.

I've changed mind about going undefeated all year and winning the conference again. Ohio State and Michigan need a tremendous dose of humble pie.

Sorry for the rant, but I'm getting tired of being ignored when it's clear "new money" is here to stay. The Rockefellers and Vanderbilts are getting rocked by new blood. We're taking the mantle damn it, and there's nothing they can do about it.

Now if we can get a couple of Natty's...

I have worked with private equity firms and they use questionable tactics.

33 minutes ago, Mike West said:

Well the Devil is in the details

They will always tout their management expertise to increase values, but generally look for short term profits with little regard to the long term health. Private equity works best when valuation of assets is based upon an active marketplace.

They will pay themselves huge management fees, and once they own something, they also have the rights to sell it.

I would immediately vote no on the idea of capitalization of something that is so very difficult to value. How often do you see equity right to a Universities ability to generate income up for sale?

I hate private equity that typically seems to strip mine everything it can at everyone's expense.

In this case it appears the B1G is getting:

1. $2B

2. Outsourced Business Management

3. Outsourced Business development, with incentives to drive growth

The entity is getting 5% of the profits going forward.

It seems like a reasonable deal.

My concerns lie in strip mining fans which the B1G governance has to limit, but they will be under a lot more incentive and pressure from the entity to do bad things for the fans that increase profits (i.e. corruption).

I'm also nervous about how this affects the flexibility of the league and it's compounded by extending the grant of right to TWO DECADES which as another poster commented sounds extremely foolish in light of the ACC experience.

Is conference realignment frozen by this? Are distributions to the equity holders frozen by this? Are the media deals frozen by this?

Bottom line, anytime private equity gets involved the public's pockets are going to get picked. This will be no different. The inflation of prices for everything the B1G gets a cut of will be huge as the find the pricing pain point where hardcore fans tap out. Jerseys, game and tailgating tickets, B1G network subscriptions, longer commercial breaks, etc.

And who knows what the future holds and how the lack of flexibility could leave the B1G out in the cold as the industry innovates, resulting in hollowing out the league.

Edited 2 hours ago2 hr by Solar

I am reminded of a short story I read in high school some 71 plus years ago about a fellow who sold his soul to the devil. Didn't turn out too great for him.

This deal is being promoted by people who will make a commission off the sale. I'm reasonably positive that the best interests of Duck fans are not at the top of their list of goals.

Right now, college football and college athletics in general are in a constant state of change. Not a time to put your feet in concrete for the next 20 years.