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University of Utah nearing landmark private equity deal expected to generate $500 million


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Posted
1 hour ago, Don Johnson said:

The best owners are usually the ones who have fuck you money and are more worried about winning than turning a profit.

It's ironic that Jerry Jones was a better owner before he had "fuck you" money. He's gotten worse the richer he's gotten.

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Posted
4 hours ago, Reynolds Woodcock said:

I don’t have first handle knowledge of this deal, but I’d tend to agree that it is loan-like, although as a technical matter it reads more like a pref equity instrument than a debt instrument to me (which would be preferred from Utah’s perspective). Share in distributions of free cash flow during life of investment, with a put/call feature in 5-7 years that has price protections for both sides. 
 

“As for Utah’s partnership, in exchange for the upfront cash, Otro will earn a large percentage of annual revenues generated from Utah Brands & Entertainment as it splits funds with the university. An exit strategy — in five to seven years — exists, and the university holds the right to purchase Otro’s ownership stake”

Super cool to see something that belongs to taxpayers (the Ute brand) get sold to PE and it’s somehow mitigating that if it all goes sideways a taxpayer owned institution has the right to buy it back. 

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Posted
10 hours ago, dieucla98 said:

How does that end up making money exactly?

They’ll make a killing burning through resources and when nothing is left then move on

 

 

 

 

Oh you meant for Utah? 

 

Posted
5 hours ago, Reynolds Woodcock said:

I don’t have first handle knowledge of this deal, but I’d tend to agree that it is loan-like, although as a technical matter it reads more like a pref equity instrument than a debt instrument to me (which would be preferred from Utah’s perspective). Share in distributions of free cash flow during life of investment, with a put/call feature in 5-7 years that has price protections for both sides. 
 

“As for Utah’s partnership, in exchange for the upfront cash, Otro will earn a large percentage of annual revenues generated from Utah Brands & Entertainment as it splits funds with the university. An exit strategy — in five to seven years — exists, and the university holds the right to purchase Otro’s ownership stake”

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Posted

It is New Year’s Day 1991. Your eyes are blurry as you come to in your buddy’s S-10 in the parking lot of the Cotton Bowl.

”Hey man, you kind of overdid with the beers in there, I know the game sucked. What the hell were you talking about? ‘Private equity’ buying the Big 10? ‘Venmoing’ a ‘collective’ to get a seventh year senior DT from Middle Tennessee in a ‘portal’? Just recline the seat and chill out.” 
 

The future must not come to pass. The SWC must be saved. 

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Posted
35 minutes ago, 956 Worldwide said:

Super cool to see something that belongs to taxpayers (the Ute brand) get sold to PE and it’s somehow mitigating that if it all goes sideways a taxpayer owned institution has the right to buy it back. 

Oh yeah.  If Otro Capital is taking most of the athletic department revenues, where is the $$$ going to come from in 5 years when the Utes desperately want out of this deal?  

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Posted

A lot of people have no idea what working under ‘private equity’ means; you’re lucky if you’re in the layoff group, the “has to stay” group is a lot worse. I’ve been through 3 KKRs, a Blackstone, and a PPG…

Posted
10 hours ago, Deej said:

A lot of schools just need to shutter their football programs instead of continuing to chase debt. 

 

9 hours ago, TexArcher said:

Pretty sure that's coming, maybe in a big way.

Honestly, it might make college basketball more interesting for quite a few schools if they funnel their resources into that instead.

Only 25 athletic departments were breaking even before the pandemic.  I'm sure it's lower now, plus we are adding expenses.  Something has to give.

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