I swear if I was a billionaire I would out bid everyone and name it the Cyclone Big 12. Just to piss everyone off.
Big 12 in talks with organizations to sell naming rights, ownership stake, according to reports
- Thread starter Connor_Ferguson
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Some in the conference thought this earlier. JP talked about it and about renaming after they added Houston\UCF\Cincy\BYU and the new schools were the ones who didn't want to change the name because they thought it had brand value
I need to understand the “20%” ownership in the conference and how the private equity owners would be compensated.
This does not make sense to me if you have to pay them 20% of your rev forever in exchange for $1B now unless the conference has plans to use the $1B to invest in opportunities for new revenue in the future.
For example, if the conference believes the money can be used to create new revenue streams worth $200M/yr (making it up) then maybe you do it? But even then, you only make a few million/ team if you have to pay them 20% of total rev (20% x 700M = 140M, 700M is roughly 500M this yr plus the “new” 200M). Seems risky… but what do I know?
This does not make sense to me if you have to pay them 20% of your rev forever in exchange for $1B now unless the conference has plans to use the $1B to invest in opportunities for new revenue in the future.
For example, if the conference believes the money can be used to create new revenue streams worth $200M/yr (making it up) then maybe you do it? But even then, you only make a few million/ team if you have to pay them 20% of total rev (20% x 700M = 140M, 700M is roughly 500M this yr plus the “new” 200M). Seems risky… but what do I know?
Posted in the original thread...
On one hand, we're screwed because the only way to increase revenue is by either selling rights (i.e. name) or getting in bed with private equity. People need to realize that Private Equity is awesome for startups, but is like a cash advance for a large enterprise. They either cut costs to increase profits or they wait until the value is high and sell... at which point the "Allstate 12 Sponsored by Dr Pepper" won't get that increased value, the PE firm does.
On the other hand, we're falling further behind the big dogs far more than people realize. It isn't just the big dollar amount of the media deal, it's also going to be iterative gaps like playoff payout, etc that keep adding extra $5mil/yr here and $4mil/yr there, etc. The result is that what $3mil/yr means to Iowa State is peanuts for what it means for Iowa. That means we have to do things that would normally feel gross in order to keep the gap somewhat manageable.
You now calculate another $22mil/yr out of the AD budget and bam, massive gap. You think that $22mil/yr is going to be made up by increased donors at a school like Iowa State? Think again. The P1 will be more likely to backfill. That ignores the fact that NIL is never going away - it is endorsement money that is largely beyond regulation/limitations.
The only other option is the P2 stops trying to compete with the P1 and accepts it's basically now Division 2 - which sucks too.
There is no "good" answer, it's just trying to find the one(s) that gives the most stability, equality with our peers, and minimizes the massive impacts to AD budgets coming up.
On one hand, we're screwed because the only way to increase revenue is by either selling rights (i.e. name) or getting in bed with private equity. People need to realize that Private Equity is awesome for startups, but is like a cash advance for a large enterprise. They either cut costs to increase profits or they wait until the value is high and sell... at which point the "Allstate 12 Sponsored by Dr Pepper" won't get that increased value, the PE firm does.
On the other hand, we're falling further behind the big dogs far more than people realize. It isn't just the big dollar amount of the media deal, it's also going to be iterative gaps like playoff payout, etc that keep adding extra $5mil/yr here and $4mil/yr there, etc. The result is that what $3mil/yr means to Iowa State is peanuts for what it means for Iowa. That means we have to do things that would normally feel gross in order to keep the gap somewhat manageable.
You now calculate another $22mil/yr out of the AD budget and bam, massive gap. You think that $22mil/yr is going to be made up by increased donors at a school like Iowa State? Think again. The P1 will be more likely to backfill. That ignores the fact that NIL is never going away - it is endorsement money that is largely beyond regulation/limitations.
The only other option is the P2 stops trying to compete with the P1 and accepts it's basically now Division 2 - which sucks too.
There is no "good" answer, it's just trying to find the one(s) that gives the most stability, equality with our peers, and minimizes the massive impacts to AD budgets coming up.
I’m not sure those would be worth anything near what the Big12 is looking at. Having your name in every conversation around the conference is worth a lot more than tacking it on to the end of the name. Everyone will continue to just use the Big10 and SEC names without mentioning the sponsor.
Take a look at the Big12 championship game. Do you ever refer to it as the Dr Pepper Big12 Championship game?
I don't but every single time it's mentioned on TV it is. That's where the value is when you combine it with on court/on field advertising.
During the broadcast yes. But the money is having the sportscenter highlights refer to the Allstate 12 every week. Just having your company name become synonymous with the conference is huge.
It’s like the Winston Cup, the Sears Trophy, or the Tostitos Bowl. It’s different than the Sugar Bowl presented by Allstate.
Blasphemer!Yes. The conference of leftovers who don’t play defense.
They might not be willing to go to the same lengths as the Big12. But they could take half steps that might be just as valuable.
Dropping down to the school level, Texas has Bevo, TAM has the collie, Colorado has Ralphie. Rather than having the expense of a live animal, sell rights to companies - get John Deere to run a remote control tractor around the field pulling an electric driven fan blowing sideways into the lower stands. Put bball players in the cab for NIL money.
How can these schools and athletic programs still claim tax exempt status? You want to be a business, time to be a business.
