Privatization of College Football (or all of sports)

[StevensTechU]

The latest: https://sports.yahoo.com/college-footba ... 45573.html

Sounds like USC and Michigan aren't fans of it, but there are some desperate parties who are trying to skirt the current governance in order to make it happen. One thing Ducks fans will be interested to note is that the investment requires Ohio State, Michigan, and Penn State get a greater share of distributions than Oregon and everyone else.

It's a paltry amount of money over 20 years and 18 schools to be frank, especially accounting for the tilted payments. So that ~135M (over 20 years) is coming in at like 4.5M/year extra.

What does Oregon need that for relative to the risk of giving away potentially even more down the line?

I think you missed that there's also an annual revenue component in which those three schools would also receive 10% more annual distributions (5.5% cut versus 5% cut).

[duckpoint]

It seems that Michigan's resistance is not rooted in the proposed unequal distributions, but in the 20 yr extension of agreements to certain current member schools that otherwise might be on the cut list in the next round of realignment. Ohio State is willing to extend those agreements to secure the unequal distributions.

I suspect that there's a similar battle being waged on the SEC side of things.

IMO, the changing structure of CFB should seek to create a more level playing field instead of locking in advantages to certain teams. Privatizing only makes things worse.

[pezsez1]

That's BS about Ohio State, Michigan and Penn State getting bigger revenue shares that Oregon and USC.

However, this is what we climbed into bed with when we ditched the Pac-12. Yes, it was the right move, but we gave up the chance to be the biggest fish in a smaller pond vs a smaller fish in a bigger pond. Ohio State, Michigan, and Penn State already had their hands on the levers of power in the B1G, and the thing about people who gain power is they usually hate giving it back.

At this point I don't think the Ducks have much of a choice in the matter.

[Duck07]

I think you missed that there's also an annual revenue component in which those three schools would also receive 10% more annual distributions (5.5% cut versus 5% cut).

No I gathered that which is why I put our payment estimate around 4.5M/year instead of around 6.3M just based on rough estimates of that 20yr 2.4B.

Is the "other" revenue source supposed to come on top of taking away "Autzen Stadium" and renaming it ChatGPT Stadium? Or will they all become "B1G Meta Stadium presented by OnlyFans" and 1 sponsor controls all the naming rights?

None of it makes any fiscal sense to me because you just immediately skyrocket so many other costs such as coaching salaries, player payments for nothing tangible for the fans.

[StevensTechU]

I think you missed that there's also an annual revenue component in which those three schools would also receive 10% more annual distributions (5.5% cut versus 5% cut).

No I gathered that which is why I put our payment estimate around 4.5M/year instead of around 6.3M just based on rough estimates of that 20yr 2.4B.

Is the "other" revenue source supposed to come on top of taking away "Autzen Stadium" and renaming it ChatGPT Stadium? Or will they all become "B1G Meta Stadium presented by OnlyFans" and 1 sponsor controls all the naming rights?

None of it makes any fiscal sense to me because you just immediately skyrocket so many other costs such as coaching salaries, player payments for nothing tangible for the fans.

I don't come to this forum to play school. Thought you were spreading only the upfront component.

[Duck07]

Sometimes I miss things when im on my phone but it just seems like a small amount of money now for taking away a bigger piece of our slice of the pie later.

[buckmarkduck]

Bringing in private equity money is basically the same thing as the networks flashing wads of cash at schools to get them to leave conferences. They're hoping to blind schools and conferences with money to overlook how bad of an idea privatization is, similar to how they got them to overlook the negatives of realignment.

Here is a decent breakdown of the deal. Also, they kind of say it without totally saying it, but as we all know SC is a bunch of arrogant pricks that only care about themselves. I’d say they are against the deal, because they are being evaluated at the same level as UO, and below the other 3 schools.

https://youtu.be/N5APcfDKf-8?si=sjBmDU6dV0P4Rz8q

[StevensTechU]

Bringing in private equity money is basically the same thing as the networks flashing wads of cash at schools to get them to leave conferences. They're hoping to blind schools and conferences with money to overlook how bad of an idea privatization is, similar to how they got them to overlook the negatives of realignment.

Here is a decent breakdown of the deal. Also, they kind of say it without totally saying it, but as we all know SC is a bunch of arrogant pricks that only care about themselves. I’d say they are against the deal, because they are being evaluated at the same level as UO, and below the other 3 schools.

https://youtu.be/N5APcfDKf-8?si=sjBmDU6dV0P4Rz8q

I just finished listening to this. They spoke little of the supposed performance component, but that may be due to lack of details available. I wish they had a little better business/financial acumen so they could go a level deeper in this than they did, as they really only talked about a couple variables in this (cash payment up front, length of time, share percentages). I'd like to know if Oregon and washington are going to be brought up to full-revenue levels faster than the existing agreement. I want to know if the assumption of future revenue is the same with and without this plan, or if there's an assumption that the Big Ten Enterprises adds value (and how). I want them to address what the upfront payment is meant to help with and what the argument FOR is from various schools, as they only talked about the reason for the two schools being AGAINST.

[Duck07]

Congress is looking into removing the Tax Exempt status of Universities now that PE is getting involved.

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[StevensTechU]

Congress is looking into removing the Tax Exempt status of Universities now that PE is getting involved.

Yea... If I'm being honest, it's reasonable if deals like this occur.

[bdkipe]

That is beyond a slippery slope. Go ahead and start taxing universities and watch what happens to the already ridiculous cost of “higher education”.

These kind of decisions do not exist in a vacuum and would have implications beyond just creating tax revenue.

I love the knee jerk reaction of politicians who lean a certain way in their attitudes about creating revenue. “Well, they have money, they can afford it.”

[bdkipe]

I’ve never heard of Maria Cantwell, but the moment I read “we need to tax that”, I was like “I know what party she belongs to.” Looked her up and in a shocking development I was right.

Before the left-leaning side of the board lights up the torches and sharpens the pitchforks, allow me to say that I also don’t think that “less taxation” is always the answer.

Socio-economic decisions like these have far reaching implications beyond the instant creation of tax revenue.

That is generally where the extremists on both sides fail. They only look at the first initial pond ripple without exploring the reaching sneaker waves down the road.

Start taking money out of the university systems and what do you think will happen? Maybe it won’t happen to the major-brand players who separate their AD revenue from general Rev but there are several big name universities who have AD’s that run at a deficit and are subsidized by the university general funds.

Maybe the solution is to tax the AD’s, although then you bring in creative /elite accounting into play.

[StevensTechU]

As a general rule, profit-seeking institutions are not tax-exempt. Universities do not have, at current, ownership structures that make them profit-seeking, which is why they are tax exempt. If that changes, then it becomes a business like any business and so the point about putting them in the same category as other enterprises is valid.

Edit for context: I agree with the "slippery slope" comment but it goes both ways. It's a pension fund now, but why can't I - an "accredited investor" as defined by the Securities Exchange Commission - also participate in this kind of investment? The tax code is plenty complicated already, and it's going to be a ridiculous situation when I'm sending my tax preparer documentation showing that my investment returns are non-taxable because they're tied to the distributions of the ACC....

[Duck07]

That is beyond a slippery slope. Go ahead and start taxing universities and watch what happens to the already ridiculous cost of “higher education”.

These kind of decisions do not exist in a vacuum and would have implications beyond just creating tax revenue.

I love the knee jerk reaction of politicians who lean a certain way in their attitudes about creating revenue. “Well, they have money, they can afford it.”

You clearly don't understand why the cost of education has risen if you think it has anything to do with Tax exempt status.

You can make college affordable but you'd have to get the Banks to stop their practice of usury with Student Loans - this is the single largest cause of the cost of education rising because you can't get out of your college debt like you can with a business debt.

[bdkipe]

I don’t think current cost of education has anything to do with tax-exempt status and I agree that student loans are almost a form of reverse-redlining, targeted at naive 17-18 year olds and families that might not do their full due diligence or understand long-term debt load.

My comment was meant to state my opinion that if you remove the tax exempt status of a public university, or changed the structure as STU pointed out, it will have other implications and consequences some of which could include higher cost of education, resulting in larger student debt.

We are singing from the same hymnal Duck07.