If truth be told..
that article was probably written somewhere in the bowels of the PAC-12 commissioner's office as a PR puff piece to try and relieve the pressure on Larry Scott who currently plays the role of the emperor with no clothes. He sold the PAC-12 a bill of goods early on and he has been running ever since to cover his Ponzi scheme. Who can really think his latest Hail Mary with PE firms is going to turn out well? Seems to me the real question is whether PAC-12 administrators and presidents will wake up before the situation is beyond repair.
First, PE firms rarely have a very long term time horizon with existing ventures. The horizon is longer with start ups but, for existing companies the PE firms are generally looking at maximizing returns in a shorter term horizon by unlocking value either through correcting flawed processes and management, cost cutting or stripping out assets more valuable for resale or repackaging all tied to an exit strategy that fits their investment horizon. Second, the PE firms are not naïve investors and always have a plan that allows them control and maximum flexibility in protecting the principal of their investment(worst case scenario) with significant upside returns(best case scenario). Anybody really think they are going to provide one half to three quarter of a billion dollars just to let their partner(PAC-12) turn around and dole it back out of the organization as payments to the schools? IF a deal can be reached one would have to think it will come with a host of conditions and protections for the PE investors and they will not allow themselves to essentially enter the deal as the low man on the Ponzi totem pole.
The current proposal Scott is floating carries the same problem as his original plan. While the PE firms do bring some negotiating and potential management expertise and industry knowledge to the table they possess no where near the leverage and industry expertise of the media heavyweights the PAC-12 network will be negotiating with for its future. The same geographic and time zone challenges exist and the PE firms can not magically fix those or, more important, supplant the existing relationships the media companies have with the SEC, Big Ten, etc.. Scott failed to originally recognize that you need a partner who can distribute your content and that by choosing to go it alone he had neither the infrastructure or expertise to carry out the distribution on his own. I would not put a lot of stock in anything Larry Scott says about things going very, very well until actual details of any deal are finalized and there has been time to analyze the fine print. My guess is if a deal gets done the benefits to the PAC-12 will lie more in reducing any further downside risk than massive positive returns. [Post edited by 2hhoop3 at 06/18/2019 09:48AM]
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In response to this post by VT ChemE 1986)
Posted: 06/18/2019 at 09:48AM