Realignment Megathread (All The Moves)

[cykadelic2]

ICYMI, Saturday's BYU at Iowa State game on Fox at 2:30 drew 2.7 million viewers. The Minnesota at TOE game on CBS at the same time drew 1.6 million viewers.

While it is notable that ISU outdrew TOE by over a million, the bigger issue is this being another prime example of how badly CBS got effed over by Fox on their B10 sub-license deal. CBS would have got far more bang for their buck by directly engaging with the B12 instead of with Fox/B10.

 

[IceCyIce]

I'm sure the Commish is gathering all this data, for the next round of TV deals. I'm hoping we can close the gap to 25% less cash than the BIG or SEC. If that were to happen the field would be pretty even. The BIG and SEC are firing coaches L/R facing massive payments. Understood it's not TV and NIL revenue making those payments but it lowers the till that amount.

 

[ZorkClone]

I'm sure the Commish is gathering all this data, for the next round of TV deals. I'm hoping we can close the gap to 25% less cash than the BIG or SEC. If that were to happen the field would be pretty even. The BIG and SEC are firing coaches L/R facing massive payments. Understood it's not TV and NIL revenue making those payments but it lowers the till that amount.

Based on this year's viewership numbers, it feels like it might be possible to close in on the Big 10.

The SEC is a different story; I would expect their next deal to put them head and shoulders above even the Big 10.

 

[IceCyIce]

Based on this year's viewership numbers, it feels like it might be possible to close in on the Big 10.

The SEC is a different story; I would expect their next deal to put them head and shoulders above even the Big 10.

What ever gets us closer to the 20 million gap, I'm all for. We manage our money and resources better than most, so getting close helps keep us and the conference singing an dancing.

 

[cykadelic2]

 

[Icky_Mettle]

 

[IceCyIce]

Without all members - So there goes Rutgers and Maryland?

 

[SolterraCyclone]

Without all members - So there goes Rutgers and Maryland?

No. It’s kind of written weird. He means they’ll extend the GOR without all members (Michigan and USC) voting yes

What that means for Michigan and USC to be on a different GOR timeline. I’m not sure, but probably nothing.

 

[FriendlySpartan]

So stupid, two of the smartest programs and schools (no disrespect NW) don’t want to do this that should be a huge sign.

I’m very happy that Michigan has stood its ground the way I thought and I hope that they are able to stay out of this stupidity

 

[cykadelic2]

No. It’s kind of written weird. He means they’ll extend the GOR without all members (Michigan and USC) voting yes

What that means for Michigan and USC to be on a different GOR timeline. I’m not sure, but probably nothing.

I am still trying to figure out how you can have a valid GOR extension without a TV contract extension (presumably with Fox) in place (based on reports I’ve read).

 

[FriendlySpartan]

I am still trying to figure out how you can have a valid GOR extension without a TV contract extension (presumably with Fox) in place (based on reports I’ve read).

Because you can have a GOR for the conference anyways they are usually just tied along with the tv contract as that’s the only reason they are usually talked about.

Proud of Michigan for this and extremely stupid of the big ten to try to push this through.

 

[Big Daddy Kang]

Seems weird that the University of California pension system would invest in this.

 

[cykadelic2]

Because you can have a GOR for the conference anyways they are usually just tied along with the tv contract as that’s the only reason they are usually talked about.

Proud of Michigan for this and extremely stupid of the big ten to try to push this through.

Without a TV deal extension in place beyond 2036, there is nothing to “grant” beyond then so this reported GOR extension beyond 2036 appears to be BS.

 

[StPaulCyclone]

Seems weird that the University of California pension system would invest in this.

Unless they think they can get call in as a part of it.

 

[1UNI2ISU]

Without a TV deal extension in place beyond 2036, there is nothing to “grant” beyond then so this reported GOR extension beyond 2036 appears to be BS.

Sure there is. You can grant the league those rights. I don't think it's anything resembling a good idea but you can certainly do it.

 

[cykadelic2]

Sure there is. You can grant the league those rights. I don't think it's anything resembling a good idea but you can certainly do it.

What rights? There are no contracted media rights of value beyond 2036 assuming Fox doesn’t have them in perpetuity.

 

[2speedy1]

What rights? There are no contracted media rights of value beyond 2036 assuming Fox doesn’t have them in perpetuity.

They are signing on to the share of the deal, they are using their rights as collateral, just like you use a house as collateral when you get a HELOC. If they want a share of the income from the deal, they must sign up for 20 years. Which then puts them also on the hook for repayment of that share if they want out of the deal early.

The Private Capital firm expects that the current membership will be intact for a certain length of time for their investment to be worth what they are paying. If 1 or more schools leave the investment would not be worth as much, therefore they expect all the schools to sign on for the required length of time or forfeit their media rights, until the deal is up. Just because the current media deal does not go that long, does not mean these schools dont have said media rights, it is just not known what those rights will be worth after the current deal. Iowa State holds media value/rights long into the future, regardless if there is a media deal or not, they are still owned by ISU, what it means is those rights are owned by the conference for whatever length of time, regardless of what they are worth.

This is why GoRs are usually separate agreements than the Media deal, they usually go hand in hand and one is usually required of the other but nothing says they can not be longer etc. In this case because there is substantial investment on the line just like a media deal, the request is for the rights to be put up as collateral until the deal is done.

 

[FriendlySpartan]

They are signing on to the share of the deal, they are using their rights as collateral, just like you use a house as collateral when you get a HELOC. If they want a share of the income from the deal, they must sign up for 20 years. Which then puts them also on the hook for repayment of that share if they want out of the deal early.

The Private Capital firm expects that the current membership will be intact for a certain length of time for their investment to be worth what they are paying. If 1 or more schools leave the investment would not be worth as much, therefore they expect all the schools to sign on for the required length of time or forfeit their media rights, until the deal is up. Just because the current media deal does not go that long, does not mean these schools dont have said media rights, it is just not known what those rights will be worth after the current deal. Iowa State holds media value/rights long into the future, regardless if there is a media deal or not, they are still owned by ISU, what it means is those rights are owned by the conference for whatever length of time, regardless of what they are worth.

This is why GoRs are usually separate agreements than the Media deal, they usually go hand in hand and one is usually required of the other but nothing says they can not be longer etc. In this case because there is substantial investment on the line just like a media deal, the request is for the rights to be put up as collateral until the deal is done.

Exactly this.

Also if Michigan and USC aren’t going along with this that has to crater that valuation number. I get there are some cash strapped schools and the Cali education pension fund is probably as good of partner you could have if you went down this path but the whole thing is stupid and shortsighted

 

[cykadelic2]

Exactly this.

Also if Michigan and USC aren’t going along with this that has to crater that valuation number. I get there are some cash strapped schools and the Cali education pension fund is probably as good of partner you could have if you went down this path but the whole thing is stupid and shortsighted

Agree.

Ohio St, Michigan and Penn St are all better off ditching this deal and aligning with the Campbell Plan where the B10 would revert to their core 10 schools and pool their media rights. Why should they sign on for a deal that is primarily a financial bailout for schools not in the core 10 and foolishly granting their non-contracted media rights beyond 2036?

Instead, they could double/triple their media rights under the Campbell Plan with rational geographic realignment and rid themselves of schools needing this bailout like Rutgers, UCLA and Maryland. And those schools needing the bailout should enter those deals on an individual case basis as required instead of leveraging the projected media value that Ohio State and Michigan primarily provide.

 

[CascadeClone]

Seems weird that the University of California pension system would invest in this.

Pension funds and endowments are always looking for something that is "safe" like a bond, but pays a little better than a bond, or has upside potential.

IDK the specifics of the transaction, or even if they have been published. I assume they are paying for a share of the future TV money.

Assume that they could buy USG 20 year bonds making 4%. Well, if they can buy a piece of the future B1G TV money and it shows a 5% return, and maybe upside if TV money increases, then it looks like a better investment than just plain old US Bonds. Heck, even if it is only 4%, but has some potential upside, and you can talk yourself into the risk (lower TV money in future) being not really a thing (and/or insure against it), then it still it a better investment. It's also diversification, in that it isn't tied to the bond markets at all. That's worth something in and of itself.

Now, for the B1G, the question is - is this the cheapest way to get money now? What if they just issued their own bonds, would the rate be lower? Can they even issue their own bonds? I could see where it could be a good deal for the B1G (the schools that need money right now), and I could see where it could be dumb JG Wentworth type thing. Just depends entirely on the details.

UM and USC, principles aside, have endowments such that they must not need cash now (unlike Rutgers, Maryland, Iowa, et al), so they have no interest in borrowing against their future. Why would they?

Maybe UM and USC they should offer to buy 1/18th shares each of the same deal that UCI is getting. They get status quo money, and the others can borrow now vs the future TV money.