B1G Investigating $2.4B Private Equity Investment, Uneven Revenue Distribution

Crusader Husker said:
So this investment is tied to the California pension system? To be fair, I don't understand any of this, but I don't like the tiered system of pay. Quick and easy money is never quick and easy money.
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Yes, the organization in charge of the California pension system is looking to "invest" in the B1G.
 
This is a big development for Nebraska that all Cornhusker fans should keep a close eye on.

I have not read anywhere as of yet that describes Nebraska's official position on this deal.

In my opinion Nebraska should be very cautious going down this road. Private equity - especially with the kind of numbers floated in this proposal - can be very sketchy.

As a poor apples to oranges example, look what happened to Cabelas. The company was built in Nebraska in 1961 and grew to a huge success story for over 55 years. But then when an activist investor got involved Cabelas was acquired by Bass Pro through the help of a private equity firm helping to finance the deal. Today Cabelas is still around but it's not exactly quite the same store as it used to be, and anyone who has driven out by their headquarters in Sidney, NE knows that it is not the same for the company out there either.


Once a private equity firm gets a return on its investment it will cut the cord and sell, also known as a BUY, STRIP & FLIP model. This leads to a sharp decline in quality service, a lack of control and transparency, and the potential loss of other assets. For a public university - getting involved with private equity could threaten the university's tax-exempt status. It could also lead to an uneven distribution of wealth.


Long story short – I know Nebraska is looking at all financial options to help with the university and also the upcoming stadium project, but I would be very leary of signing onto this private equity deal that the Big Ten and Tony Petitti are trying to push through.
 
The Duke said:
This is a big development for Nebraska that all Cornhusker fans should keep a close eye on.

I have not read anywhere as of yet that describes Nebraska's official position on this deal.

In my opinion Nebraska should be very cautious going down this road. Private equity - especially with the kind of numbers floated in this proposal - can be very sketchy.

As a poor apples to oranges example, look what happened to Cabelas. The company was built in Nebraska in 1961 and grew to a huge success story for over 55 years. But then when an activist investor got involved Cabelas was acquired by Bass Pro through the help of a private equity firm helping to finance the deal. Today Cabelas is still around but it's not exactly quite the same store as it used to be, and anyone who has driven out by their headquarters in Sidney, NE knows that it is not the same for the company out there either.


Once a private equity firm gets a return on its investment it will cut the cord and sell, also known as a BUY, STRIP & FLIP model. This leads to a sharp decline in quality service, a lack of control and transparency, and the potential loss of other assets. For a public university - getting involved with private equity could threaten the university's tax-exempt status. It could also lead to an uneven distribution of wealth.


Long story short – I know Nebraska is looking at all financial options to help with the university and also the upcoming stadium project, but I would be very leary of signing onto this private equity deal that the Big Ten and Tony Petitti are trying to push through.
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As I've stated in this thread, I am 1000% against this deal because of all of what you have described here. If anyone is delusional enough to think that once private equity gets involved that they are going to pay us all that money and not demand certain things change......well.....you're delusional. And, so often those changes are NOT in the best interest of the company, customers and even more so, the employees.

This is an absolutely horrible idea.
 
The Duke said:
I have not read anywhere as of yet that describes Nebraska's official position on this deal.
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I've not seen anything either. Not sure any school has an "official" position at this point. But it seems that Michigan and USC are the main ones pushing against, so that would seem to indicate that everyone else is at least strongly considering if not if favor of.

The Duke said:
In my opinion Nebraska should be very cautious going down this road. Private equity - especially with the kind of numbers floated in this proposal - can be very sketchy.

As a poor apples to oranges example, look what happened to Cabelas. The company was built in Nebraska in 1961 and grew to a huge success story for over 55 years. But then when an activist investor got involved Cabelas was acquired by Bass Pro through the help of a private equity firm helping to finance the deal. Today Cabelas is still around but it's not exactly quite the same store as it used to be, and anyone who has driven out by their headquarters in Sidney, NE knows that it is not the same for the company out there either.


Once a private equity firm gets a return on its investment it will cut the cord and sell, also known as a BUY, STRIP & FLIP model. This leads to a sharp decline in quality service, a lack of control and transparency, and the potential loss of other assets. For a public university - getting involved with private equity could threaten the university's tax-exempt status. It could also lead to an uneven distribution of wealth.


Long story short – I know Nebraska is looking at all financial options to help with the university and also the upcoming stadium project, but I would be very leary of signing onto this private equity deal that the Big Ten and Tony Petitti are trying to push through.
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I don't know this for sure. But from what I understand they would not have enough power to really force anything by themselves. So I don't know that the Cabelas comparison is fair.
 
Mavric said:
I don't know this for sure. But from what I understand they would not have enough power to really force anything by themselves. So I don't know that the Cabelas comparison is fair.
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I would never ever trust private equity to stand off and not be able to put pressure for certain things. They will figure out how to do that.
 
Mavric said:
I don't know this for sure. But from what I understand they would not have enough power to really force anything by themselves. So I don't know that the Cabelas comparison is fair.
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On the Cabelas comparison that is why I said it was a very poor apples to oranges comparison.

I guess my point was no matter what business you are in - it would be prudent to be very cautious when dealing with private equity.
 


It's getting close to that time for the University of Nebraska to let their fans and the public at large know exactly where they stand on this issue.

I for one would hope that like Michigan and USC that Nebraska would be against it.
 
The Duke said:
It's getting close to that time for the University of Nebraska to let their fans and the public at large know exactly where they stand on this issue.

I for one would hope that like Michigan and USC that Nebraska would be against it.
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Nebraska is for it.

If Nebraska was against it, we would be hearing about them in the same vein that we are hearing about USC and Michigan.
 
Red Five said:
Nebraska is for it.

If Nebraska was against it, we would be hearing about them in the same vein that we are hearing about USC and Michigan.
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I suspect you're right on this. I guess we will all see how this pans out. I'm still very hesitant about Nebraska going down this road though if true.
 
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