Interesting conversation on ESPNU radio this morning - Full Ride....
Chris and Rick were discussing what would potentially come first. ND joining a conference, or conferences "fracturing" with private equity funding - i.e. schools either selling their entire athletic department or just football to PE firms. Rick said he thought the later would come first. He went on to mention that the President of Arizona was recently asked by another faculty member if the school would be better off "selling" (i think it would actually be leasing, but you get the point) the athletic department to a PE firm and the Pres. said that was being considered/investigated.
Interesting dynamics come into play with that model for sure.....
** Edited by 133193Hokie at 2/27/2024, 6:17:55 PM
5 Replies
2
2hhoop3
2y
buy the entire athletic department? Even the most profitable departments do not have P&L's that would excite them. Divesting/ceasing non-profitable sports to improve the P&L comes with a variety of potential challenges. Finally, just a general question, how many PE deals work out well for others beside the PE firm? They're generally(not all) blood sucking leeches that strip the carcass for quick cash returns from asset sales, dress up the cadaver and foist it upon naive investors in an IPO or other transaction while parachuting out of the deal with nice total returns.
(In response to this post by 133193Hokie)
2y
goal is to sell the acquisition, break it up, or as you say - put lipstick on it - but the main goal is to get an ROI, and sell their position in the future. They are not buy and hold firms. The end game, it seems to me, would to position a school to get a P2 invite. FSU may fit that bill, but Arizona would not in my opinion.
I don't see any other way they get an ROI in the college athletics segment. A separation of football from college athletics? that would get them an ROI as well, and maybe some know more than we, the consumer, are privy too.
So far, however, no one has pulled the trigger.
(In response to this post by 2hhoop3)
V
VTDC
2y
In the name of bringing efficiency to the market. But that is largely left with leftover pieces that get split up among others, with a windfall for cutting fat and loading debt.
Good for the acquirer, less for the thing being acquired.
(In response to this post by Big12 guy)
2y
dealing with a coven of PE vultures?
** Edited by mancunian at 2/28/2024, 10:09:42 AM
(In response to this post by Big12 guy)