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Utah for-profit equity deal: the endgame for CFP

305_separatist

305_separatist

Threskiornithidae
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This is ******* massive and something I thought would happen eventually. It makes total sense and will be the model. There’s just too much money needed and too much money to make.

My unsolicited advice to whoever has any pull at the program whatsoever: start planning this seriously. Start the conversations. Start pushing it. And line up Bezos and or Ken Griffin to be major backers. This is the next best thing to owning a NFL team as far as prestige, with a lot of real value potential.

Do it now. Be early to this like we were the transfer portal. Profit.
 
BigDikDaddyFromCincinnati said:
At what point does the cost of being a fan cause a downtrend in viewership? Eyeballs are essentially what drives the currency, no?

Not disputing the OP point. PE firms aren’t doing this to not make an ROI. Who will pay? The fans.
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That is true. Fans already generate a lot of money, and let’s be honest. The better we are, the more money we’re willing to spend. More games and more merch. Infusing this kind of capital to turbocharge the program is not only going to help with that, but will be instantly necessary and become the new standard once a single program does it if anyone else wants to compete.

Turn this into a straight up business and it also opens up more content creation too that a lot of us would happily pay for. Imagine a UM subsidiary funded by bezos and has a deal with Prime. Prime produces its own behind the scene content and team interviews and the works for consumption there to add to their catalog, we get stuff we would never see otherwise as fans.

So yes the point is to extract more money from us, but the best way to do that is to create a better product and more community investment in the team.
 
305_separatist said:
That is true. Fans already generate a lot of money, and let’s be honest. The better we are, the more money we’re willing to spend. More games and more merch. Infusing this kind of capital to turbocharge the program is not only going to help with that, but will be instantly necessary and become the new standard once a single program does it if anyone else wants to compete.

Turn this into a straight up business and it also opens up more content creation too that a lot of us would happily pay for. Imagine a UM subsidiary funded by bezos and has a deal with Prime. Prime produces its own behind the scene content and team interviews and the works for consumption there to add to their catalog, we get stuff we would never see otherwise as fans.

So yes the point is to extract more money from us, but the best way to do that is to create a better product and more community investment in the team.
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I don't disagree with your points. I'm not sure you understood what I was trying to say (I mean that respectfully). Let me give you a couple personal experiences. I live in Southern California. Making it to games at The Rock is not exactly convenient. I go to about one game a year at this point, generally based around where our closest road game and assisted by a business trip as well (when I can). Last year I went up to Berkeley and this year I went to SMU. I took my sons (early 20's) to the game in Berkely and went ot the SMU game solo this year (with a fellow alum). The Berkeley weekend cost me about $1500 between travel, tickets and lodging. The SMU game cost me about $400 (I stayed with frined as he lives in Dallas area and I had a biz trip planned around the game so I could help offset the travel cost). The tickets alone to the SMU game were $150. I don't remember the exact cost of the Cal tix last year. I make a decent living. I'm not rich, but I'm not hurting either. My concern is that once PE firms enter the equation full bore, that $1500 weekend will end up being $6500 and the $400 SMU game becomes $1700. If those numbers come to frutition (not accounting for inflation), at some poiint I bow out and find a new hobby. Again, I make a decent living and I'm not a paycheck-to-paycheck guy.

Sidenote - I'm not ripping anyone in any way. I'm trying to simply list my example and keep it real.

Now, apply those same concepts to what you outlined for television (Amazon/Peacuck/YouTubeTv/Paramount etc) and I see a world where the games are all pay-per-view or subscription required. I first had this thought when Sunday Ticket first came out. The NFL seems to be the model for what college will do and you can't watch a Thursday game if you don't have Prime (or a way around it :)). They had a game on Peacuck last year. Again, the point of all this whiny drivel is that I'm afraid at some point that CFB just becomes a cash vaccuum for the fans. Some will embrace it I'm sure and some will not. I'm curious as to what it does to the net number of viewers.

Feel free to call me a grouchy old person and light a bag of dogs.hit on fire and set it on my porch. But when you finish, let me know how much of what I wrote you think is a real possibility.
 
BigDikDaddyFromCincinnati said:
I don't disagree with your points. I'm not sure you understood what I was trying to say (I mean that respectfully). Let me give you a couple personal experiences. I live in Southern California. Making it to games at The Rock is not exactly convenient. I go to about one game a year at this point, generally based around where our closest road game and assisted by a business trip as well (when I can). Last year I went up to Berkeley and this year I went to SMU. I took my sons (early 20's) to the game in Berkely and went ot the SMU game solo this year (with a fellow alum). The Berkeley weekend cost me about $1500 between travel, tickets and lodging. The SMU game cost me about $400 (I stayed with frined as he lives in Dallas area and I had a biz trip planned around the game so I could help offset the travel cost). The tickets alone to the SMU game were $150. I don't remember the exact cost of the Cal tix last year. I make a decent living. I'm not rich, but I'm not hurting either. My concern is that once PE firms enter the equation full bore, that $1500 weekend will end up being $6500 and the $400 SMU game becomes $1700. If those numbers come to frutition (not accounting for inflation), at some poiint I bow out and find a new hobby. Again, I make a decent living and I'm not a paycheck-to-paycheck guy.

Sidenote - I'm not ripping anyone in any way. I'm trying to simply list my example and keep it real.

Now, apply those same concepts to what you outlined for television (Amazon/Peacuck/YouTubeTv/Paramount etc) and I see a world where the games are all pay-per-view or subscription required. I first had this thought when Sunday Ticket first came out. The NFL seems to be the model for what college will do and you can't watch a Thursday game if you don't have Prime (or a way around it :)). They had a game on Peacuck last year. Again, the point of all this whiny drivel is that I'm afraid at some point that CFB just becomes a cash vaccuum for the fans. Some will embrace it I'm sure and some will not. I'm curious as to what it does to the net number of viewers.

Feel free to call me a grouchy old person and light a bag of dogs.hit on fire and set it on my porch. But when you finish, let me know how much of what I wrote you think is a real possibility.
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That's all fair and valid. Maybe it's besides the point, but I don't think it has to be a PE firm necessarily. That's why I bring up Bezos. A major sponsor and de facto partial owner could be a better fit. They still care about the bottom line of course, but it might be less pure cash generation focus and also clout, like sport team ownership usually is. So I'm not trying to focus on the PE aspect nor would I want that for the Hurricanes as the partner.

That being said regardless of who it is, yes, the general trend is in the direction you are describing. Ultimately, I think some of it is unavoidable, and some of it would be crossing the line and back fire in terms of brand damage and fan good will. You have to manage both things as a business which is not simple. Again, I think PE is almost always going to take it to far vs someone who has more money than god already and is more worried about legacy, prestige, community standing, etc. The operation needs to still be in the black and have healthy growth, but they don't have an incentive to bleed it dry.
 
BigDikDaddyFromCincinnati said:
Who will pay? The fans.
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Good question.

Yes, fans probably be paying.

But a for-profit entity, such as this thing that will run Univ. of Utah's athletics, probably a has a better hand in deciding price points based on the market (supply and demand). If the for profit entity wants to keep making money, they'd be wise not to price themselves out of that market.

Could be very interesting to see this thing.
 
rsa coral gables said:
how do they circumvent not for profit rules?
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It is not hard lmfao. I mean look at OpenAI. That broke the seal on all of this. Non-for profit and raising billions on billions of equity dollars from VCs, microsoft, etc. It can be done, it just took one program to set it in motion for college sports. There will be court cases and some eyeballs, but this is happening. The main school entity is the non-profit, and it can own a for profit subsidiary, and that subsidiary can have outside ownership and equity that can be issued for cash etc. That's structurally all it is. Miami needs to be the first Florida school to do this, and I'm sure will have the backing of the State government especially if DeSantis continues to hold influence after the next elections.
 
BigDikDaddyFromCincinnati said:
I don't disagree with your points. I'm not sure you understood what I was trying to say (I mean that respectfully). Let me give you a couple personal experiences. I live in Southern California. Making it to games at The Rock is not exactly convenient. I go to about one game a year at this point, generally based around where our closest road game and assisted by a business trip as well (when I can). Last year I went up to Berkeley and this year I went to SMU. I took my sons (early 20's) to the game in Berkely and went ot the SMU game solo this year (with a fellow alum). The Berkeley weekend cost me about $1500 between travel, tickets and lodging. The SMU game cost me about $400 (I stayed with frined as he lives in Dallas area and I had a biz trip planned around the game so I could help offset the travel cost). The tickets alone to the SMU game were $150. I don't remember the exact cost of the Cal tix last year. I make a decent living. I'm not rich, but I'm not hurting either. My concern is that once PE firms enter the equation full bore, that $1500 weekend will end up being $6500 and the $400 SMU game becomes $1700. If those numbers come to frutition (not accounting for inflation), at some poiint I bow out and find a new hobby. Again, I make a decent living and I'm not a paycheck-to-paycheck guy.

Sidenote - I'm not ripping anyone in any way. I'm trying to simply list my example and keep it real.

Now, apply those same concepts to what you outlined for television (Amazon/Peacuck/YouTubeTv/Paramount etc) and I see a world where the games are all pay-per-view or subscription required. I first had this thought when Sunday Ticket first came out. The NFL seems to be the model for what college will do and you can't watch a Thursday game if you don't have Prime (or a way around it :)). They had a game on Peacuck last year. Again, the point of all this whiny drivel is that I'm afraid at some point that CFB just becomes a cash vaccuum for the fans. Some will embrace it I'm sure and some will not. I'm curious as to what it does to the net number of viewers.

Feel free to call me a grouchy old person and light a bag of dogs.hit on fire and set it on my porch. But when you finish, let me know how much of what I wrote you think is a real possibility.
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Great questions and thoughts. Yeah, you are a old guy Hater like me, but you make a lot of sense. I agree with the notion that once PE is involved that the #1 thing is creating a consisitent revenue stream and expected income, profit. That means jacking the prices for basically the same experience we have now. "Monetized" lol. As a comparison, Vegas in the 2000's comes to mind. It was fun up until it wasn't.
 
305_separatist said:
It is not hard lmfao. I mean look at OpenAI. That broke the seal on all of this. Non-for profit and raising billions on billions of equity dollars from VCs, microsoft, etc. It can be done, it just took one program to set it in motion for college sports. There will be court cases and some eyeballs, but this is happening. The main school entity is the non-profit, and it can own a for profit subsidiary, and that subsidiary can have outside ownership and equity that can be issued for cash etc. That's structurally all it is. Miami needs to be the first Florida school to do this, and I'm sure will have the backing of the State government especially if DeSantis continues to hold influence after the next elections.
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Piggybacking off of this, from the article:

"Utah received clearance from the NCAA to enter the partnership, according to Yahoo Sports. It must abide by certain stipulations to remain an NCAA member, though. For instance, university president Taylor Randall and athletic director Mark Harlan must retain majority decision-making control."
It's done. Expect a dozen more of these 1 year from now and the rest to follow. $500 million, and that's for ******* Utah.
 
305_separatist said:


This is ******* massive and something I thought would happen eventually. It makes total sense and will be the model. There’s just too much money needed and too much money to make.

My unsolicited advice to whoever has any pull at the program whatsoever: start planning this seriously. Start the conversations. Start pushing it. And line up Bezos and or Ken Griffin to be major backers. This is the next best thing to owning a NFL team as far as prestige, with a lot of real value potential.

Do it now. Be early to this like we were the transfer portal. Profit.
Click to expand...

This isn't something new. It's been going on at various spots. It's simply not spoke about or put on paper like this previously. It will become the norm with the current state of college athletics. Has to.
 
As for Utah’s partnership, in exchange for the upfront cash, Otro will earn a large percentage of annual revenues generated from Utah Brands & Entertainment as it splits funds with the university. An exit strategy — in five to seven years — exists, and the university holds the right to purchase Otro’s ownership stake.

The emergence of private equity in college sports is a long time coming.

For the last two years, as university athletic departments face mounting financial stressors, dozens of schools pursued private capital or equity deals, including conferences as a whole — most notably the Big 12 and Big Ten. However, when these projects reached the finish line, they were stymied for various reasons.

For instance, Big 12 commissioner Brett Yormark has twice presented such a deal before his presidential board. Big Ten officials nearly reached the point of a vote on a $2.4 billion capital deal before at least two schools — USC and Michigan — scuttled the project.

Yormark’s pursuit of a capital deal caught the attention of Harlan and Utah administrators, who, more than two years ago, began the process that resulted in the potential deal with Otro.
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I mean if PE is entering college football... There is only one logical answer to this for Miami.

We need an agreement with that Saudi money
 
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