The B12 has to get something (short term $$) and PE firm has to get something (mid-long term ownership stake in the B12). I’ve already discussed why future B12 valuations aren’t totally measurable until there’s a new media deal, so I can definitively state a PE firm is going to get something valuable at that time. *Disclaimer: The B12 stays at 16 for this* So let’s do a hypothetical based on rumors. PE buys 20% of the B12 for $1.2B in June 2025. This would be when the B12’s next media rights deal starts and 6 years away from the expiration of the deal with ESPN/Fox. This deal is worth $2B total over a 6 year period, so giving up $1.2B for a 20% stake of a $2B valuation isn’t a great deal on paper for the PE firm. And you better believe if the B12’s present goal is getting a cash infusion to compete now with the P2, then the PE firm will be receiving very little of that $2B in annual payments. So let’s assume PE gets $0 payments in return over the next 6 years. So… I’ve been very generous to the B12 here. PE is giving them $200M annually in exchange for a 20% stake and $0 annual payments in return. How does this help the Big 12? They get $200M per year over 6 years. Split 16 ways, each school adds $12.5M annually to its revenue. That’s great. Let’s say (to make things neat) the B12 was $25M in the hole to the P2, it just closed the gap by half. Great. So, we gotta talk about what the PE firm is going to get. They aren’t giving the B12 $1.2B over 6 years just to help a friend out in need. They want a sizable return on their investment. Well, they will get a good idea of what their investment is worth when the B12 negotiates with ESPN/Fox/CBS/NBC or whoever…. This will be 6 years from last June when the Big XII signed their about-to-be current media rights deal. Now, I’m going to make this scenario as good for the B12 as I can again. Inflation is still going right now, but slowing some, and we are about to go into a likely recession in 2025 at which point inflation stops and then we likely see a period of growth beginning in 2026 on through 2029 around when the next Big 12 deal will get worked out. Kansas and Houston each win an NCAA hoops title and Oklahoma State and Kansas State each take magical runs to the semifinals of the College Football playoff all between 2025 and 2029. So, we assume the value of the B12 is much more in 2029 than it is today. This is good for the Big 12….and the PE firm that owns 20% of the Big XII. So what happens in 2029? Let’s say a deal gets worked out between ESPN, CBS and Amazon Prime for total coverage of the Big XII for 6 years from 2031-2036. Now, average payout to the Big XII increased from $18.3M per team to $31.7M per team in this most recent deal. That is a 73% increase. Let’s assume the same 73% increase in annual average payout (and yes, for more teams). So, $31.7 * 1.73 = $54.8M annual payout! ($23M more!!) Times 16 teams equals $658M. Way to go Big XII! $658M times 6 years $3.95B dollars. Let’s just round up and call it a $4B dollar deal for the Big XII! Awesome! But, $0.8B of that $4B dollars(20%) goes to PE firm. $131.6M of that annual payout goes to the PE firm. $11M of each school’s annual payment goes to the PE firm. So each school only sees $44M per year. This is $12.2M more than they were making solely from their media rights deal before, but…they also now lose out on the $12.5 cash infusion payment they were getting form the PE firm. SO…they lose money, $300K per year in fact, on out in 2031. Now…the PE firm has put in $1.2B from 2025-2030 and is now seeing the possible distribution of….$0.8B in return from 2031-2036. Not bad, but the PE firm wants to cash out. So they sell their 20% stake to a different PE firm for…$2B dollars. They make a solid return on their investment, get their cash and move on. The new PE firm now has 20% stake in a $4B valuation of the Big XII over 6 years and the prospects of getting $131.6M in annual payouts from the Big XII’s media rights deal during that time. But….they know the Big XII schools need that $131.6M annually, so…they cut a deal, the Big XII schools retain their full media rights share of $54.8M per year (yay!) in exchange for another 10% stake in the Big XII. When combined with their new CFP payout of $25.2M per team (which I haven’t even discussed that the PE firm owns 20% of….again, I’m giving the Big XII all the latitude I can with these numbers), each Big XII school will be pulling in $80M annually in exchange for PE firms now owning 30% of their league. The Big XII can’t say no, they have to remain competitive with a P2 that will now definitely be getting well over $100M total per year and lets say the total NIL distribution payroll for a schools competing in the CFP leagues now run in excess of $30M annually. (We are hearing $20M now) So, I can see the Big XII making it work for another 12 years, but that cycle is going to start to hit harder when they can’t sell much more of their rights. (I can’t see them going over 33%)