The Big Ten is on the verge of moving forward with a private capital proposal worth $2.4 billion, but officials from two schools in the conference might be standing in the way.
Late last week, multiple outlets reported that the conference was in talks with an investment fund of the University of California pension system about potentially infusing $2.4 billion in immediate cash into the conference’s 18 schools and helping create a conference subsidiary, Big Ten Enterprises.
According to Yahoo Sports, the UC pension’s investment system (UC Investments) would invest $2.4 billion into the conference, at least $100 million per school (and an average of $140 million per school), in exchange for a 10% equity stake in Big Ten Enterprises, which would be a spin-off of Big Ten conference assets such as media rights.
UC Investments manages the endowment and retirement savings of the UC system and is independent from the universities within the system, such as Cal Berkeley. It currently manages a $190 billion portfolio.
Those with knowledge of the negotiations told Yahoo Sports on Friday that Big Ten executives and commissioner Tony Petitti made moves to accelerate the process and finalize details of the deal with school presidents, athletic directors and board members.
However, although it was reported that a vote was likely to take place early this week, officials from the University of Michigan and USC might throw a wrench in things.
According to Front Office Sports (FOS), board members from the two schools met virtually on Tuesday to discuss their concerns with the deal, and at this point, both university boards “have close to unanimous feelings of opposition.”
The university presidents in the Big Ten will ultimately be the ones who vote on the proposal, but a source told FOS that the boards at Michigan and USC “wield major power within their universities.”
Board members reportedly expressed shared concerns about the concept of selling an equity stake to any private capital entity, and noted that they think this may be a temporary fix to long-term issues in college football.
USC officials were also reportedly unhappy with the tiered structure for the initial one-time payments, according to FOS. Under the current system, Michigan, Ohio State and Penn State would be in the top tier and receive $190 million, while other schools, including USC, would receive less.
100 million is not all that much when you consider Penn State just paid one person half of that to quit his job.
Letting the fox into the henhouse, eh?
College football and basketball (and college athletics, generally) have already spun out of control, owing to what I consider some foolish antitrust decisions by feckless judges. So now there are essentially no rules, commercialism is rampant, top college prospects can be bribed to sign with schools, all college athletes will be paid, a steadily increasing number of players is transferring every year. And we’ve just had a high-school player file a lawsuit, demanding that HE get NIL money. THAT will be interesting to follow: where will high schools and swim clubs find the money to pay all their kids?
As if there weren’t enough worms crawling out of the can, now… Read more »
What did you think would happen? That they would just pay kids all of a sudden and nothing would change? This has been a calculated move all along. The writing was on the wall for years.
Found this of interest in the linked Yahoo article.
The league is expected to introduce a new uneven model for distribution derived from conference media rights and Big Ten Enterprises, featuring a performance and marketing mechanism most similar to the uneven distribution structure recently implemented by the ACC.
Either the small revenue schools are really desperate for a cash influx or really scared the Big Dogs could bolt if they are willing to ditch equal revenue distribution (the Big Ten has always had the most equal revenue distribution model of the major conferences to the point they even partially pool gate receipts for conference FB and MBB games.)
I think the conference’s lesser football programs HAVE expressed a need for more money to pay athletes, etc.—and I think I read that one provision in this ‘Sell Your Soul to the Private Sector’ deal will be that the conference must stay whole for many years into the future–I think a year has been stipulated, but can’t recall what it is–meaning no schools can leave. I don’t know if the conference could add even more members, adding to the already ridiculous nature of ginormous, unwieldy leagues.
Small correction.
According to Yahoo Sports, the UC pension’s investment system (UC Investments) would invest $2.4 billion into the conference, at least $100,000 per school (and an average of $140,000 per school), in exchange for a 10% equity stake in Big Ten Enterprises, which would be a spin-off of Big Ten conference assets such as media rights.
Those should be $100,000,000 and $140,000,000.
Those numbers don’t seem right in the third paragraph. There isn’t enough info here to know whether it’s a good idea, but USC isn’t in the same revenue class as those other three.
U of S. Cal is traditionally a bigger media name than Penn State – and if their football is back, bigger than Michigan.
USC blows up the pac 12 and causes this whole problem of conference realignment and is now causing problems in their new conference?
Quick. Blame Grant House and Greg Meehan!
PAC 12 blew themselves up. USC was just smart enough to realize it first.