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CU has rejoined the Big 12 and broken college football - talking out asses continues

#1 pick said:
That's their exit fee. Crazy huh. The Mountain West get about 4mil and their exit fee is 34 million
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I think the thing that many are missing on these exit fees is the idea of amortizing them over time.

General concept with rough numbers:

‐New conference pays out, say 30 million/yr over 5 year life of broadcast contract.

‐School currently only gets 4 million.

‐New conference offers them 1/2 share, so 15 million.

‐Old conference has 30 million "exit fee"

I can literally guarantee that any university endowment investment officer would jump at the chance to lend their AD $30 mm at 8% interest with a 5 year amortization to pay that exit fee.

The AD's payment on that note would be a little over $7mm.

So, the AD would go from getting $4mm/yr from their conference to $8mm (15 from conference minus 7 million loan payment).

The point is that even with 1/2 shares, these exit fees aren't a serious impediment.

Now, the ACC's GOR buyout is a different kettle of fish.
 
skibum said:
I think the thing that many are missing on these exit fees is the idea of amortizing them over time.

General concept with rough numbers:

‐New conference pays out, say 30 million/yr over 5 year life of broadcast contract.

‐School currently only gets 4 million.

‐New conference offers them 1/2 share, so 15 million.

‐Old conference has 30 million "exit fee"

I can literally guarantee that any university endowment investment officer would jump at the chance to lend their AD $30 mm at 8% interest with a 5 year amortization to pay that exit fee.

The AD's payment on that note would be a little over $7mm.

So, the AD would go from getting $4mm/yr from their conference to $8mm (15 from conference minus 7 million loan payment).

The point is that even with 1/2 shares, these exit fees aren't a serious impediment.

Now, the ACC's GOR buyout is a different kettle of fish.
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Also, usually half share escalates each year so it's a full share within 5 years, give or take.
 
The idea of a business charging itself interest on their own loan is wild. Somehow an academic definitely came up with that brilliant ****ing concept
 
Buffnik said:
If the B1G took UW and Stanford to crash the Pac, the Big 12 (after having already added UA and ASU for 15) should release a statement that it has high interest in expanding to 18, is evaluating options, and is very intrigued by the cultural fit and stability that Oregon State, Wazzu and Boise State would add to the conference in the Pacific Northwest market - with emphasis on liking OSU's proximity to Portland and none of them duplicating markets.

It's not a bad model, actually, and the responses from Duck & Ute fans would be legendary.
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Dear Santa, I've tried hard to be good all year. Please deliver this for Christmas, or sooner, if possible.
 
The Alabaster Yak said:
The idea of a business charging itself interest on their own loan is wild. Somehow an academic definitely came up with that brilliant ****ing concept
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Not a business.

The school's endowment has a duty to support the university *and* to fulfill the pledge made to the donors (essentially that "we'll invest your donation and only use the gains to financially support the university, so you your donation will help the university forever."

Oddly, charging the AD interest, and then using endowment gains to support the AD by the same amount would likely raise fewer eyebrows than an interest free loan...
 
#1 pick said:
It's not wide open. It's Washington. Then it's between Oregon and Stanford and Stanford got more supporters in the room than Oregon. If Oregon doesn't get the invite, Oregon State and Washington State will be the happiest teams. Gonzaga too but Gonzaga has interest from the Big XII as well
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Holy Fook! Oh Lord please.. oh please keep Oregon out of the Big10. The tears out of the Pacific NW would cause a major flood. Knowing the ego of Oregon, they would be stupid enough to explore going independent.
 
skibum said:
Not a business.

The school's endowment has a duty to support the university *and* to fulfill the pledge made to the donors (essentially that "we'll invest your donation and only use the gains to financially support the university, so you your donation will help the university forever."

Oddly, charging the AD interest, and then using endowment gains to support the AD by the same amount would likely raise fewer eyebrows than an interest free loan...
Click to expand...
Making the AD pay back the loan is one thing and completely reasonable, but charging the AD interest is the dumb part no matter how you justify it.
 
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