College Sports (Football)

Status
Not open for further replies.
#101      
Battle89
sbillini said:
taking away the colorful "payday" language - the DIA has taken a lot of loans out under Whitman. So much so that Illinois is now the most indebted program in the big ten. So hopefully you'll understand when some people don't blindly trust him when a bunch of cash is waving in his face that take care of his short-term problems at the potential expense of the program's long-term success.
Click to expand...
Again I struggle reconciling my businessman vs. my fan perspective...

I'm all for paying down debt, if that is JW's plan. It's a hole we've dug ourselves and eventually that hole will need to be filled.

But as a fan, what a buzzkill if we got all this money and had nothing tangible to show for it, while other programs boost NIL, upgrade facilities, etc.
 
#102      
Pikeillinifan
sbillini said:
taking away the colorful "payday" language - the DIA has taken a lot of loans out under Whitman. So much so that Illinois is now the most indebted program in the big ten. So hopefully you'll understand when some people don't blindly trust him when a bunch of cash is waving in his face that take care of his short-term problems at the potential expense of the program's long-term success.
Click to expand...

While I'm not trying to underplay the crazy debt we have, but do you or anyone know how much was committed as donations that are being paid over time vs. flat-out debt we need to figure out?

Meaning is $250M of the $300M+ in debt already committed donations, which are paid at $XX annually (depending on the donor's wishes), or is $100M committed and the rest is on us to find through revenue or further donations?

And I know our debt servicing is what, close to $30M annually?
 
#103      
fuddrules
sbillini said:
taking away the colorful "payday" language - the DIA has taken a lot of loans out under Whitman. So much so that Illinois is now the most indebted program in the big ten. So hopefully you'll understand when some people don't blindly trust him when a bunch of cash is waving in his face that take care of his short-term problems at the potential expense of the program's long-term success.
Click to expand...
Just for clarification for everyone, not only isn’t this a payday loan, but it’s not a loan at all. It’s a purchase of 10% of Illinois’ future BTE earnings for the next 20-years. I happen to think BTE will increase Illinois’ revenue over 10% what they would otherwise do on their own, at least the portion outside of media rights. I’ve said before, BTE should hire a Disney executive. No one is better at extracting money from its customers. No one walking around Disney has a fat wallet but most have a smile on their face.

Personally, I think Whitman has done a phenomenal job of using money. Almost all companies borrow money. You need money to make money. I just liked a post where it stated Illinois is in their “glory days”. I agree and it seems to me Illinois athletics is in as good of shape competitively as they’ve ever been . At least in modern times. It’s as challenging now as ever and Illinois is thriving. That doesn't come free.

If Whitman feels he can make better use of a tranche money today rather than slowly spread out over the next 20-years, I hope he gets it.

As far as using it to pay down the debt, I doubt much of it would be used for that purpose. But if it was it would at least free up a lot of cash flow to be used as needed.
 
Last edited:
#104      
sbillini
fuddrules said:
Just for clarification for everyone, not only isn’t this a payday loan, but it’s not a loan at all. It’s a purchase of 10% of Illinois’ future BTE earnings for the next 20-years. I happen to think BTE will increase Illinois’ revenue over 10% what they would otherwise do on their own, at least the portion outside of media rights. I’ve said before, BTE should hire a Disney executive. No one is better at extracting money from its customers. No one walking around Disney has a fat wallet but most have a smile on their face.

Personally, I think Whitman has done a phenomenal job of using money. Almost all companies borrow money. You need money to make money. I just liked a post where it stated Illinois is in their “glory days”. I agree and it seems to me Illinois athletics is in as good of shape competitively as they’ve ever been . At least in modern times. It’s as challenging now as ever and Illinois is thriving. That doesn't come free.

If Whitman feels he can make better use of a tranche money today rather than slowly spread out over the next 20-years, I hope he gets it.

As far as using it to pay down the debt, I doubt much of it would be used for that purpose. But if it was it would at least free up a lot of cash flow to be used as needed.
Click to expand...

A correction in what you're saying -

1) i never said the BTE deal was a debt deal. I was just responding to your post asking what payday loans DIA has taken out under Whitman. They've taken a lot of loans under Whitman. The BTE deal is very much an equity deal, not debt.
2) from everything i've seen, UC Investments is not purchasing 10% of future BTE earnings for the next 20 years. It's purchasing 10% of of BTE earnings into perpetuity (or at least as long as they're owners of the 10%) and, as part of that deal, extending GoR to get to 20 years. Both are linked as in it's part of the same package, but are mutually exclusive beyond that.

With that said, your perspective on why you like the deal is reasonable and is what's being said by the deals' proponents (at least the ones talking). like i've said before, this argument is saying they are doing this as a form of "offense" not "defense". And while that may very well be what eventually ends up happening, the opposite perspective - that this deal is from a position of defense - is no less valid nor less likely. There's been quite seismic changes to the college sports game the last 5 years, accompanied with massive spending/debt increases. Rising tide lifting all boats...eventually...is an easy selling point when you need to raise cash now.

Finally, something less discussed, but still important to me, is creating effectively a for-profit entity to manage college sports is wholly antithetical to the mission of universities. We've been sliding this way for college sports for a while now, and this just puts a rubber stamp on saying that's ok, and, instead of using this money to support the mission of the universities, you have returns-demanding entities with a vested interest that often will not align with those non-profit missions.
 
#105      
Pikeillinifan
sbillini said:
Finally, something less discussed, but still important to me, is creating effectively a for-profit entity to manage college sports is wholly antithetical to the mission of universities. We've been sliding this way for college sports for a while now, and this just puts a rubber stamp on saying that's ok, and, instead of using this money to support the mission of the universities, you have returns-demanding entities with a vested interest that often will not align with those non-profit missions.
Click to expand...

In fairness, I work at a large university. While it's called a 'non-profit', it's actually a for-profit business where, instead of profits/growth going to owners or shareholders, they are reinvested in endowments, faculty and staff growth, new program development, marketing, fundraising, and other initiatives.

There is a P&L that is managed as maniacally as a Fortune 500 company, but tenured faculty are immune from layoffs, so they can focus on the mission, but staff and administration are a different story and are purely business/revenue driven.
 
#106      
sbillini
Pikeillinifan said:
In fairness, I work at a large university. While it's called a 'non-profit', it's actually a for-profit business where, instead of profits/growth going to owners or shareholders, they are reinvested in endowments, faculty and staff growth, new program development, marketing, fundraising, and other initiatives.

There is a P&L that is managed as maniacally as a Fortune 500 company, but tenured faculty are immune from layoffs, so they can focus on the mission, but staff and administration are a different story and are purely business/revenue driven.
Click to expand...

yes, in my experience you're 100% correct. but where the two missions differ is how investments are thought about. in the for-profit world, investments are typically managed to gaining a return above your cost of capital. If i have $100 to spend, where can i spend it to get a % return greater than what I would get just buying back my own stock with the $100 or dividending it out to shareholders who can get their own returns elsewhere. It's structured like that because that's what the shareholders demand, and that'll be how UC Investments demand (with a minority voice) how investments are made by BTE (I know this because i work in the investment management industry, and it's what i demand).

With a non-profit entity (and correct me if i'm wrong), yes, you're expected to generate revenues that at least match, and preferably exceed your expenses, but the thought process of what you do with that excess capital is very different. As a simple example, if DIA's were truly for-profit entities, why would they have any other sport other than basketball and football? There's no economical reason to do so, but there's a rationale behind it driven by the non-profit mission.

My point is when you blend the two together like as is proposed, it's going to, at the very least, muddy the dynamics and, in a worst case, drive it to act more for-profit and less non-profit.
 
#107      
fuddrules
sbillini said:
A correction in what you're saying -

1) i never said the BTE deal was a debt deal. I was just responding to your post asking what payday loans DIA has taken out under Whitman. They've taken a lot of loans under Whitman. The BTE deal is very much an equity deal, not debt.
2) from everything i've seen, UC Investments is not purchasing 10% of future BTE earnings for the next 20 years. It's purchasing 10% of of BTE earnings into perpetuity (or at least as long as they're owners of the 10%) and, as part of that deal, extending GoR to get to 20 years. Both are linked as in it's part of the same package, but are mutually exclusive beyond that.

With that said, your perspective on why you like the deal is reasonable and is what's being said by the deals' proponents (at least the ones talking). like i've said before, this argument is saying they are doing this as a form of "offense" not "defense". And while that may very well be what eventually ends up happening, the opposite perspective - that this deal is from a position of defense - is no less valid nor less likely. There's been quite seismic changes to the college sports game the last 5 years, accompanied with massive spending/debt increases. Rising tide lifting all boats...eventually...is an easy selling point when you need to raise cash now.

Finally, something less discussed, but still important to me, is creating effectively a for-profit entity to manage college sports is wholly antithetical to the mission of universities. We've been sliding this way for college sports for a while now, and this just puts a rubber stamp on saying that's ok, and, instead of using this money to support the mission of the universities, you have returns-demanding entities with a vested interest that often will not align with those non-profit missions.
Click to expand...

20-year deal written by Ross Dellenger, who is the lead journalist on this topic - linked below:

sports.yahoo.com

Sources: Big Ten execs pressing to make $2.4 billion investment deal — without Michigan and USC if needed

The Big Ten has signaled to those at Michigan and USC that it is moving forward with the deal, even delivering to each program an ultimatum with a deadline.
sports.yahoo.com sports.yahoo.com

Nobody in their right mind would sell part of the B1G for perpetuity. Hence the reason the additional 10-years added to the GOR. UC investments needs to ensure the conference stays together for 20 years. The length of their investment.
 
#108      
sbillini
fuddrules said:
20-year deal written by Ross Dellenger, who is the lead journalist on this topic - linked below:

sports.yahoo.com

Sources: Big Ten execs pressing to make $2.4 billion investment deal — without Michigan and USC if needed

The Big Ten has signaled to those at Michigan and USC that it is moving forward with the deal, even delivering to each program an ultimatum with a deadline.
sports.yahoo.com sports.yahoo.com

Nobody in their right mind would sell part of the B1G for perpetuity. Hence the reason the additional 10-years added to the GOR. UC investments needs to ensure the conference stays together for 20 years. The length of their investment.
Click to expand...
Interesting. why would nobody do that?
 
#111      
fuddrules
sbillini said:
Interesting. why would nobody do that?
Click to expand...

Maybe this is rudimentary or redundant but I’m going to go back to square 1.

UC Investments (UCI) is similar to SURS or TRS - all 3 are pension funds responsible for managing the retirement system of their respective plans (UCI also manages the endowment fund). Here’s the portfolio info from TRS, the Teacher Retirement System of the State of Illinois (TRS):

“Using the combined resources of external investment managers, internal staff and consultants, TRS invests the trust assets in accordance with the general fiduciary rules of both state and federal laws. The market value of the TRS total fund on June 30, 2025 was $77.20 billion. Below is the asset allocation as of June 30, 2025.”

https://www.trsil.org/investments/portfolio-information

They use a lot of different investment managers to try and diversity their investments. They even let private equity firms manage tranches of money. Maybe a PE firm specializes in real estate so they throw $250 million at them so the PE firm invests that portion of the portfolio.

UCI manages ~$200 billion. Not chump change. To find investments beyond stocks/bonds/real estate and diversifying strategies (TRS words) for this $200B – UCI has looked to the B1G and feels it’s a good opportunity to diversify. I’m guessing TRS would categorize the B1G investment as diversifying strategy in their asset allocation page I linked.

In the case of the B1G I’m sure UCI feels like it’s a very safe investment. Viewing it somewhat like a bond. A 20-year bond to be exact. If, a big if, the B1G stays together, UCI investment is safe. As we have seen, not easy. So, UCI locks everyone in for 20-years (or 10 more years). Everyone. For some B1G programs, whooohooo, we are in like flint for 20-years. High fives all around and they break out the bourbon. Except 2 – they have their wine and they’re happy as is and want nothing to do with bourbon.

So UCI isn’t buying the B1G, they are investing in the B1G (for a return). Like buying a bond. No bond pays for infinity. Some similarities to an annuity. No annuity pays for infinity given the annuitant eventually dies. There’s no way to price the value of the B1G for infinity. It likely won’t exist for infinity. Infinity is a long time, and I don’t know where infinity even ends?

In order to get a return for perpetuity, they would have to buy part of the B1G. That’s not happening. Think of this as a limited investment, not a purchase. UCI isn’t buying anything.
 
Last edited:
#112      
Battle89
SixthandWhite said:
It sure feels like MSU got whacked harder than Michigan. Michigan won a natty, MSU averaged 4.667 wins with zero bowl games to show for it.
Click to expand...
Central Michigan got whacked harder than Michigan, for Michigan's cheating scandal. It's so in-your-face favoritism it's not even funny anymore.

1762983576127.png
 
#114      
illinistephen
fuddrules said:
20-year deal written by Ross Dellenger, who is the lead journalist on this topic - linked below:

sports.yahoo.com

Sources: Big Ten execs pressing to make $2.4 billion investment deal — without Michigan and USC if needed

The Big Ten has signaled to those at Michigan and USC that it is moving forward with the deal, even delivering to each program an ultimatum with a deadline.
sports.yahoo.com sports.yahoo.com

Nobody in their right mind would sell part of the B1G for perpetuity. Hence the reason the additional 10-years added to the GOR. UC investments needs to ensure the conference stays together for 20 years. The length of their investment.
Click to expand...
The article you posted says that UC Investments will own a 10% stake in Big Ten Enterprises. Why do you then think that they aren't buying a part of the Big Ten when they will own something? Nowhere does it say that this ownership stake will go to 0% in 20 years or that after 20 years the money to them goes to zero. 20 years is mentioned in relation to the Grant of Rights extension through 2046.

Have you seen something that explicitly says that UC Investments 10% ownership in Big Ten Enterprises isn't in perpetuity? Maybe a quote from someone who would know, not a sports reporters headline.
 
#115      
sbillini
fuddrules said:
Maybe this is rudimentary or redundant but I’m going to go back to square 1.

UC Investments (UCI) is similar to SURS or TRS - all 3 are pension funds responsible for managing the retirement system of their respective plans (UCI also manages the endowment fund). Here’s the portfolio info from TRS, the Teacher Retirement System of the State of Illinois (TRS):

“Using the combined resources of external investment managers, internal staff and consultants, TRS invests the trust assets in accordance with the general fiduciary rules of both state and federal laws. The market value of the TRS total fund on June 30, 2025 was $77.20 billion. Below is the asset allocation as of June 30, 2025.”

https://www.trsil.org/investments/portfolio-information

They use a lot of different investment managers to try and diversity their investments. They even let private equity firms manage tranches of money. Maybe a PE firm specializes in real estate so they throw $250 million at them so the PE firm invests that portion of the portfolio.

UCI manages ~$200 billion. Not chump change. To find investments beyond stocks/bonds/real estate and diversifying strategies (TRS words) for this $200B – UCI has looked to the B1G and feels it’s a good opportunity to diversify. I’m guessing TRS would categorize the B1G investment as diversifying strategy in their asset allocation page I linked.

In the case of the B1G I’m sure UCI feels like it’s a very safe investment. Viewing it somewhat like a bond. A 20-year bond to be exact. If, a big if, the B1G stays together, UCI investment is safe. As we have seen, not easy. So, UCI locks everyone in for 20-years (or 10 more years). Everyone. For some B1G programs, whooohooo, we are in like flint for 20-years. High fives all around and they break out the bourbon. Except 2 – they have their wine and they’re happy as is and want nothing to do with bourbon.

So UCI isn’t buying the B1G, they are investing in the B1G (for a return). Like buying a bond. No bond pays for infinity. Some similarities to an annuity. No annuity pays for infinity given the annuitant eventually dies. There’s no way to price the value of the B1G for infinity. It likely won’t exist for infinity. Infinity is a long time, and I don’t know where infinity even ends?

In order to get a return for perpetuity, they would have to buy part of the B1G. That’s not happening. Think of this as a limited investment, not a purchase. UCI isn’t buying anything.
Click to expand...
lots to unpack here, so let me take a stab. Gonna have to get a little explanatory here, so sorry in advance if it sounds a big pedantic. But i think it's important in understanding how these deals come together and what the motivations are:

1. You originally stated that nobody would sell art of the big ten for perpetuity, but here you're arguing why UCI wouldn't buy part of the big ten for perpetuity. So not should how to square that, but let's assume you actually meant that nobody would buy 10% of BTE into perpetuity.
2. Now, if i'm a buyer of an equity stake, it's not like i'm locking myself in that stake forever. I can turn around and sell that stake as long as i can find a buyer. It's very similar to buying Amazon stock. you're an equity owner but can turn around and sell it. The only difference is Amazon equity is publicly traded so it's easier to find a buyer. BTE would (probably) not be publicly traded so it would be a private equity deal, but those types of deals happen every day. The only difference with BTE is that there's seems to be a specific 15 lock in clause where UCI can't turn around and sell the stake. But looks like they can do whatever they want after that. So what that said, there's absolutely no reason why it's not feasible for UCI to want to buy a perpetual stake in BTE. UCI is owning perptual life assets all over the place, but it doesn't mean they have to hold them perpetually.
4. UCI may be looking at BTE like a bond, but there's a big difference between a bond and an equity, and that's related to capital structure priority. With a bond, you're upside is capped, but to compensate for lower upside, you have higher claism to assets in case of financial distress. Equity is uncapped on the upside, but is risked to 100% downside (equity can be written down to zero). And equity is typically infinite-lived vs. bonds usually (but not always) having maturity. Now BTE may look like a safe equity investment. But it's still equity in many key ways.
5. Finally, yes, there is a way to value an asset to infinity. It happens every day in the equity world. It's a mathematical calculation that's a derivation of differential calculus. I usually doesn't make sense to try to value equity with a finite end date given most business' goal is to be around forever. It's like saying I'm going to buy amazon stock but only calculate the next 20 years of free cash flow and assume there's zero after that. It wouldn't come even close to its current valuation if you did that, so that's a simple example of how financial markets do, indeed, value to infinity. There are even bonds that don't have maturity dates (they're called perpetual bonds).
 
#117      
pruman91
sbillini said:
speaking only for myself, i've seen a fair amount of these types of deals in my career (frankly, probably more than JW has), and more often than not, they usually don't end well. The key question, imo, is "why?". The more i think about the "why?" the more skeptical i become.

you can call that "anti-whitman" if you want.
Click to expand...
my background in financial services allowed me the opportunity to be privy to numerous dealings such as what's being discussed now and my company ALWAYS did due diligence in ascertaining on how every deal would AGE........I don't know all the interworkings of this deal but what I have read leads me to think my company would have rejected this deal as to risky to my company and the comparison of this deal as a " payday loan " structure worries me more than anything else......the unequal distribution amounts given to different schools will eventually cause widespread arguments down the road and could lead to certain schools leaving the B$G weakening the strength of the conference beyond repair.......

OR ..............................maybe some schools are so deep in debt that this deal need's to be made to guarantee solvency and restore confidence in their bottom line...........I believe in the risk / reward principle and this just feels to much risk for such little reward
over a long period of time.....

but hey , I've been retired for 12 years now and have many other ways to spend my time and energy.........I really really do..
 
#120      
fuddrules
sbillini said:
lots to unpack here, so let me take a stab. Gonna have to get a little explanatory here, so sorry in advance if it sounds a big pedantic. But i think it's important in understanding how these deals come together and what the motivations are:

1. You originally stated that nobody would sell art of the big ten for perpetuity, but here you're arguing why UCI wouldn't buy part of the big ten for perpetuity. So not should how to square that, but let's assume you actually meant that nobody would buy 10% of BTE into perpetuity.
2. Now, if i'm a buyer of an equity stake, it's not like i'm locking myself in that stake forever. I can turn around and sell that stake as long as i can find a buyer. It's very similar to buying Amazon stock. you're an equity owner but can turn around and sell it. The only difference is Amazon equity is publicly traded so it's easier to find a buyer. BTE would (probably) not be publicly traded so it would be a private equity deal, but those types of deals happen every day. The only difference with BTE is that there's seems to be a specific 15 lock in clause where UCI can't turn around and sell the stake. But looks like they can do whatever they want after that. So what that said, there's absolutely no reason why it's not feasible for UCI to want to buy a perpetual stake in BTE. UCI is owning perptual life assets all over the place, but it doesn't mean they have to hold them perpetually.
4. UCI may be looking at BTE like a bond, but there's a big difference between a bond and an equity, and that's related to capital structure priority. With a bond, you're upside is capped, but to compensate for lower upside, you have higher claism to assets in case of financial distress. Equity is uncapped on the upside, but is risked to 100% downside (equity can be written down to zero). And equity is typically infinite-lived vs. bonds usually (but not always) having maturity. Now BTE may look like a safe equity investment. But it's still equity in many key ways.
5. Finally, yes, there is a way to value an asset to infinity. It happens every day in the equity world. It's a mathematical calculation that's a derivation of differential calculus. I usually doesn't make sense to try to value equity with a finite end date given most business' goal is to be around forever. It's like saying I'm going to buy amazon stock but only calculate the next 20 years of free cash flow and assume there's zero after that. It wouldn't come even close to its current valuation if you did that, so that's a simple example of how financial markets do, indeed, value to infinity. There are even bonds that don't have maturity dates (they're called perpetual bonds).
Click to expand...
Thank you for all of this. It sounds like you have a good grasp of the perpetual agreement between UCI and the B1G.
 
#121      
Dkayak
fuddrules said:
Yes. And each University would use that cash in various and different ways. I bet Whitman already has a plan on what he would do with the money.

Also, how many payday loans has the DIA taken under Whitman? I at least have confidence in him, unfortunately, you don't.
Click to expand...
I have full confidence in our AD, but suspect you’re overestimating AD decision-making authority in terms of new financial commitments, especially major capital investments. Every position in every organization, public or private, has limits on its spending authority. He won’t be handed a big checkbook, free to invest it however he likes. Josh certainly won’t be the only person with ideas. I’d also guess some stakeholders will argue for debt reduction, as we’ve already borrowed beyond our means.
 
Last edited:
#122      
Epsilon
I wasn’t sure where to post this but has anyone heard about USA network spinning off from Comcast / NBC / Peacock and forming its own USA Sports network (called Versant)? Sounds like the PAC 12 just inked a deal with them.

www.espn.com

Pac-12 signs TV deal with USA Sports through 2030-31

The Pac-12 has found another media partner in USA Sports, which announced Thursday it will televise 22 football games, 50 men's basketball games and up to 10 women's basketball games beginning next year.
www.espn.com www.espn.com
 
Last edited:
#123      
Bucktown
Epsilon said:
I wasn’t sure where to post this but has anyone heard about USA network spinning off from Comcast / NBC / Peacock and forming its own USA Sports network (called Versant)? Sounds like the PAC 12 just inked a deal with them.

www.espn.com

Pac-12 signs TV deal with USA Sports through 2030-31

The Pac-12 has found another media partner in USA Sports, which announced Thursday it will televise 22 football games, 50 men's basketball games and up to 10 women's basketball games beginning next year.
www.espn.com www.espn.com
Click to expand...
NBC is also restarting its broadcast sports channel. https://www.nbcsports.com/pressbox/...ew-nbc-sports-network-next-monday-november-17
 
#124      
Epsilon
#125      
Epsilon
Epsilon said:
I wasn’t sure where to post this but has anyone heard about USA network spinning off from Comcast / NBC / Peacock and forming its own USA Sports network (called Versant)? Sounds like the PAC 12 just inked a deal with them.

www.espn.com

Pac-12 signs TV deal with USA Sports through 2030-31

The Pac-12 has found another media partner in USA Sports, which announced Thursday it will televise 22 football games, 50 men's basketball games and up to 10 women's basketball games beginning next year.
www.espn.com www.espn.com
Click to expand...
This does make me curious what the total PAC-12 payout will be for each school now that they have their 3 media partners.They’ve been pretty hush hush about it all (which makes me think it’s not super great).
 
Status
Not open for further replies.
Back