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New Wilner Piece on the Proposed PAC Equity Sale & CBS's Renewal with the SEC
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JRsec Offline
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New Wilner Piece on the Proposed PAC Equity Sale & CBS's Renewal with the SEC
02-20-2019 01:54 PM
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ken d Offline
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RE: New Wilner Piece on the Proposed PAC Equity Sale & CBS's Renewal with the SEC
(02-20-2019 01:54 PM)JRsec Wrote:  Courtesy of Murdcu:

https://www.mercurynews.com/2019/02/20/p...ower-five/

It wouldn't seem prudent to me to count as revenue over five years a permanent capital infusion. What happens after five years when that one time pot of money is spent?
02-20-2019 03:12 PM
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JRsec Offline
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RE: New Wilner Piece on the Proposed PAC Equity Sale & CBS's Renewal with the SEC
(02-20-2019 03:12 PM)ken d Wrote:  
(02-20-2019 01:54 PM)JRsec Wrote:  Courtesy of Murdcu:

https://www.mercurynews.com/2019/02/20/p...ower-five/

It wouldn't seem prudent to me to count as revenue over five years a permanent capital infusion. What happens after five years when that one time pot of money is spent?

Well that's a simple question with an easy answer. The investors either get hosed, or the revenue distribution takes a nose dive.

This follows a blog piece I posted at the top of one of the last pages in the PAC Woes thread in the CS/CR portion of the forum where an Oregon blogger was urging 6 PAC schools to defect to the Big 12.

Venerated and protected by geography or not, stuff is brewing in the PAC. Will it be enough to bring change? I have my doubts as to any kind of realignment, but it seems to me the present commissioner is grasping at straws and local trustees and BMD's are seething behind the scenes.
(This post was last modified: 02-20-2019 03:17 PM by JRsec.)
02-20-2019 03:13 PM
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Wedge Offline
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RE: New Wilner Piece on the Proposed PAC Equity Sale & CBS's Renewal with the SEC
The points that Wilner makes (as opposed to what anyone is trying to read into it) are solid.

1) It's silly to think that any pie-in-the-sky financing scheme can conjure up SEC-level money. The SEC is always going to have more TV money because they have more rabid fans and more college football fans in their footprint. The comparison to what the ACC and Big 12 make is the correct comparison, as Wilner noted.

2) Tennis Larry's "equity sale" scheme would provide only a temporary cash spike. The correct move is to make a better deal for P12N going forward, rather than borrowing against equity to partly compensate for the mistakes Larry & Co. have made.

This is consistent with the internal grumblings from schools including Stanford, which is not surprising given that Stanford is where Wilner gets most of his inside info.
02-20-2019 05:57 PM
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XLance Offline
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RE: New Wilner Piece on the Proposed PAC Equity Sale & CBS's Renewal with the SEC
Interestingly he did not mention the supposed equity distribution of the B1G network.
02-21-2019 05:19 AM
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JRsec Offline
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RE: New Wilner Piece on the Proposed PAC Equity Sale & CBS's Renewal with the SEC
(02-21-2019 05:19 AM)XLance Wrote:  Interestingly he did not mention the supposed equity distribution of the B1G network.

There are a lot of variables not covered but probably because it was a speculative piece. For instance he didn't cover the Big 10's new contract by 2023-4. I'm guessing a 5% bump since the valuations will only be 6 years old and they have built in escalators. I think the equity distributions were baked into the 51 million but we would know for sure if they had posted their annual equity value as they had done each year until last year. Hmm?

Also remember the Big 10's last contract was for 6 years for a reason. The networks don't want to be locked in forever either. As Boomers pass the % of actual viewers for college football will decline and with it the advertising rates.

If the SEC gets their 300 million from CBS that they are looking to land I don't expect to see a contracted period longer than 10 years for the reason I just cited.

And, at some point the demographic shifts within regions will factor in as well.
(This post was last modified: 02-21-2019 12:11 PM by JRsec.)
02-21-2019 12:10 PM
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RE: New Wilner Piece on the Proposed PAC Equity Sale & CBS's Renewal with the SEC
(02-20-2019 05:57 PM)Wedge Wrote:  The points that Wilner makes (as opposed to what anyone is trying to read into it) are solid.

1) It's silly to think that any pie-in-the-sky financing scheme can conjure up SEC-level money. The SEC is always going to have more TV money because they have more rabid fans and more college football fans in their footprint. The comparison to what the ACC and Big 12 make is the correct comparison, as Wilner noted.

2) Tennis Larry's "equity sale" scheme would provide only a temporary cash spike. The correct move is to make a better deal for P12N going forward, rather than borrowing against equity to partly compensate for the mistakes Larry & Co. have made.

This is consistent with the internal grumblings from schools including Stanford, which is not surprising given that Stanford is where Wilner gets most of his inside info.
Pac-12 is in a large way a victim of geography and demographics.

Half of the SEC teams are in states with no NFL, NBA, NHL, MLB. Another three are roughly two hours or more away from a major professional sports team.

Matching SEC and Big Ten money is just going to be a struggle and probably isn't realistic. That noon Eastern window just isn't open to the Pac-12 when you are looking at 10 am or 9am kickoffs and the 10pm and later Eastern kickoffs aren't high value nationally because more than half the country is in bed by the time the game ends.

Most of Pac12 has a fiercer fight for local eyeballs and the later starts preclude reaching many more nationally.

I can't see the equity deal working out well. That smells of desperation by the commissioner.
02-21-2019 01:32 PM
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