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I think there are two separate issues. The revenue generation is one thing, but at the end of the day the investor is just buying a share of the media rights money. Any additional value is going to be peanuts compared to that.
The investor will get $80-100m/yr in pretty much guaranteed cash flow off the bat. If the media rights money grows, then they’ll get even more over the long term. Also if the SEC/B1G consolidate at some point they’ll get a piece of that—if that happens their share of the pie would be worth a lot more than what they’re paying id guess.
Where are you reading that?
Patches alone aren’t going to bring in $2B.
Revenue sharing is the only way I can see this making sense.
It’s in the article. They would basically get an even cut of the revenue, same as the teams.
We're almost there
My reading comprehension must be shit. I can't make heads or tails out of that article. So much jargon in it that doesn't say anything. Creating a new entity to focus on business development... better scale and leverage our 18 members... organize ourselves better... modernize operations... wtf does any of it mean.
The link in the tweet has more details in plain English. Dannen’s statement is a bunch of fucking gibberish, and I say that as a management consultant with an MBA.
Right here:
So the assumption is that equity shares will be equal? Because that’s not the case with corporations. And the article sets the stage for unequal distributions.
This is the corporate lawyer in me talking but I doubt that the schools would have separate classes of shares/units amongst themselves. Maybe the PE group gets a class with certain veto rights, etc., but I doubt they’d be getting preferred equity or anything like that. It’s not like the B1G NEEDS the cash—they’re looking at like $1b+ in revenue this year. I guess we’ll see how it all shakes out after the full details come out.
