Private equity firms would run college football much better than school presidents and ADs | Commentary
As a college football fan, the initial inclination is to recoil at the very idea of our beloved sport getting into bed with a private equity firm and selling its soul for a massive influx of new cash to help fund the expensive impending revenue sharing with athletes.
The No. 1 objection you always hear is this: “If a private equity firm gets involved by loaning billions of dollars to college athletic programs across the country, then those firms will have the power to tell college athletic directors and presidents how that money would best be spent.”
Question: Is that really such a bad thing?
If you ask me, college ADs and presidents need to be told how their money should best be spent because, quite frankly, they’ve done a lousy job of managing their money for generations.
The only reason college athletic programs have been able to turn a profit over the decades is because they have not had to pay their employees, er, student-athletes and have essentially been getting free labor. It was a great — albeit illegal — business model while it lasted.
Now that colleges will soon start paying their athletes as part of the groundbreaking settlement in the House vs. NCAA class-action lawsuit, there is a mad dash for more cash. Lots more cash. As we know, this growing insatiable appetite for more moolah is why the Pac-12 imploded, why Texas and Oklahoma bolted the Big 12 for the SEC and why FSU and Clemson are trying to to sue their way out the ACC for a more lucrative deal in the SEC or Big Ten.
Now, according to some excellent reporting by Yahoo’s Ross Dellenger, we learn that Smash Capital, a private equity firm led by former Disney executives, has met with at least two dozen Power 4 athletic directors to discuss a plan called “Project Rudy” — a proposal for a college football super league of the nearly 70 schools in the SEC, Big Ten, ACC, Big 12 and Notre Dame.
The proposal, according to Dellinger’s reporting, would incorporate the power conferences into this 70-team framework, tier the revenue distribution based upon performance, arrange more marquee games between power conference programs by eliminating all games against Group of Five and FCS opponents and consolidating the media rights under one agreement instead of the current structure of five different packages (one for each power league and Notre Dame). All the while there would be an infusion of $9 billion in private capital cash for the schools involved and they would make an extra $15 billion over a 12-year period.
Hey, sign me up!
Are you kidding me?
Better games. More money. A level playing field. Programs getting paid based upon performance instead of prestige.
Who doesn’t want that system?
“Two bits, four bits, six bits, 15 billion dollars,
All for private equity stand up an holler! “
It seems to me the private equity honchos want to do what the movers and shakers of college football should have done decades ago. They want to give us exciting regular-season games between UCF and Florida State instead of mundane games between UCF and New Hampshire or FSU and Charleston Southern. They want more meaningful playoff games at the end of the season and less meaningless bowl games. And they don’t think Vanderbilt should make more TV money than Clemson.
Of course, as you would expect, the SEC and Big Ten are pushing back on the idea of private equity groups getting their hands on college football’s cash cow. The commissioners of the two conferences — Greg Sankey of the SEC and Tony Petitti of the Big Ten — met earlier this week and rejected the idea of college football programs partnering with private equity firms.
I’d like to think it’s because Sankey and Petitti honorably believe that college athletics should not be for sale, but we all know college football traded honor for profit years ago. The reason the SEC and the Big Ten are against this plan is because they are the two richest and most influential conferences and they don’t want a more level playing field — even if it means they, too, would make more money. They’d rather have more power than more money.
“I have yet to see a single thing in any [private equity] plan that I’ve learned details about that contains things that we couldn’t do ourselves and our [Powerful 4] colleagues as well,” Petitti said earlier this week. “At the end of the day, there’s a strong commitment that you have the ability to do all of this ourselves.”
Do it yourselves, Tony Baloney?
Really?
Seriously?
You’ve had 150 years to do it yourselves and you still don’t have the coordination, cooperation or leadership to figure it out.
Your sport is a lawless, chaotic mess with rules and regulations that cannot be enforced by a toothless NCAA that has been robbed of its power by the court system and by pandering pom-pom-waving state politicians who make laws to shield their local schools from having to follow NCAA rules. Your sport is in such disarray, you are actually begging the federal government to help you legislate it.
Can you name another business that actually wants the government to get involved?
Pathetic.
Meanwhile, college ADs continue to spend money like a trust-fund kid with daddy’s platinum card. They give coaches 10-year, $100 million contracts and then fire them and pay them $50 million in buyout money. They borrow money to build palatial facilities they don’t really need and to hire bloated football staffs that aren’t really necessary.
If you ask me, college football ADs, presidents and commissioners desperately need a private equity firm to not only invest money but to tell them how to spend it and make even more money.
After all, the current power brokers of college football have had over a century to manage their money-printing machine, and what have they done with it?
As the sport finally faces the music of revenue-sharing, why not let a group of financial grown-ups take the wheel?
Email me at moc.lenitnesodnalro@ihcnaibm. Hit me up on X (formerly Twitter) @BianchiWrites and listen to my Open Mike radio show every weekday from 6 to 9:30 a.m. on FM 96.9, AM 740 and 969TheGame.com/listen
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