LSU explores setting up company to house broadcast revenues, sell stakes to private investors

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LSU is considering the creation of a new entity to house broadcast revenue it earns via the SEC’s media rights deal with ESPN, with the hope being that the private company could use the revenue for investments, creating a “perpetual revenue-generating model” to help “alleviate strain in an NIL era, where big-money contracts for both coaches and athletes have stretched donors thin,” according to a report by Alyse Pfeil and Jon Blau in the New Orleans Times-Picayune.

The new entity would reportedly sell a nine percent stake to a private investor believed to be Acrisure CEO Greg Williams in exchange for a $100 million investment. Williams would then receive seven percent of any profits the business generates. The university would consider selling an additional 11 percent stake to other partners, with the athletic department “likely” to control 80 percent of the new company. The plan was shared with the school’s top athletics boosters last week.

LSU athletics have been hit with two very large and self-imposed bills this year: one from firing head football coach Brian Kelly with $54 million remaining on his contract, and another from hiring Lane Kiffin away from Ole Miss for an additional $91 million. Those coaching-related decisions have seemed to inspired LSU’s creativity from a revenue-generation standpoint.

The school wouldn’t be the first to formally seek outside investment, though it would be the first to do so by leveraging the revenue generated through its media rights payouts. Clemson, the Times-Picayune notes, established a similar entity for its multimedia rights (which are separate and much less valuable than a team’s TV rights payouts). And Utah recently accepted investment from a private equity firm. LSU does not plan on allowing direct investment into its proposed entity from private equity, the report says.

But the concept of moving revenue earned from broadcast rights into a private company, where the capital can presumably be used for investments that generate a higher return than if it were to sitting inside the athletic department, is novel.

In the 2024-25 fiscal year, LSU received $72.4 million in broadcast revenue from the SEC. That figure is expected to jump considerably when ESPN’s media rights deal with the conference expires in 2030.

There is, of course, plenty of risk associated with what LSU is trying to do. Investors expect a return on their capital, and LSU could now feel pressure to make decisions based on how best to maximize profits rather than how to best run an athletic department.

LSU’s proposal has an eerily similar feel to that of FIFA president Gianni Infantino’s recent gambit to privatize the World Cup. That plan didn’t get far, as confederations across the globe swiftly pushed back, and now Infantino might pay the ultimate price by losing his job atop FIFA.

No such criticism has been levied towards LSU, at least not yet. And if the school’s plan does become a reality, other universities will certainly be keeping a close eye on how it turns out, and whether they should consider a similar arrangement for their own athletic department.

The post LSU explores setting up company to house broadcast revenues, sell stakes to private investors appeared first on Awful Announcing.

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