- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Can LSU's Dreams Come True? What If LSU Big Donors Contribute $100 Million for 10% Income?
Posted on 8/4/26 at 7:53 am
Posted on 8/4/26 at 7:53 am
Everyone wants LSU to get the best players, but LSU's NIL deals total tens of millions of dollars. Thus, everyone wants LSU's Big Donors to pay for LSU's NIL deals / player salaries.
Everyone wants LSU to replace bad coaches, but LSU's coaching contract buyouts total tens of millions of dollars. Thus, everyone wants LSU's Big Donors to pay for LSU's coaching contract buyouts.
Everyone says, "LSU's NIL deals aren't self-sustaining," and "Why would donors, who get nothing back, continue to contribute?"
We can't really expect LSU's Big Donors to contribute tens of millions of dollars and not get some return on their money.
What if LSU's Big Donors were willing to contribute the necessary money but wanted a little return on their money in return for their contribution? What if those donors only wanted a small minority share of a commercial joint venture with LSU that pools commercial operations like ticketing, licensing, sponsorships, and NIL sales into a separate for-profit entity? What if LSU keeps full operational and athletic control? This control includes all decisions including AD staffs, coaching staffs, and student-athletes.
LSU cannot legally take a loan from LSU's Big Donors and promise to repay it.
So what if LSU's Big Donors get together with LSU. (Let's say that each individual investor has to contribute at least $100k to be involved.) LSU's Big Donors contribute to an entity (let's call it Bayou Equity) that agrees to give LSU $100 million. In return, LSU agrees to pay Bayou Equity less than 10% of LSU's sports future income stream.
Bayou Equity has only a right to 10% of the future income stream. Bayou Equity has no control over operations. LSU keeps full operational and athletic control, including decisions on coaching staffs and student-athletes.
There is literally no difference from what everyone wants and the Bayou Equity deal except that 10% of LSU's future income goes to LSU's Big Donors.
LSU gets its own angel investors and white knights to put a huge sum of money into LSU's coffers for 10% of its future income. LSU retains the right to buy it all back in five years.
Everyone wants LSU to replace bad coaches, but LSU's coaching contract buyouts total tens of millions of dollars. Thus, everyone wants LSU's Big Donors to pay for LSU's coaching contract buyouts.
Everyone says, "LSU's NIL deals aren't self-sustaining," and "Why would donors, who get nothing back, continue to contribute?"
We can't really expect LSU's Big Donors to contribute tens of millions of dollars and not get some return on their money.
What if LSU's Big Donors were willing to contribute the necessary money but wanted a little return on their money in return for their contribution? What if those donors only wanted a small minority share of a commercial joint venture with LSU that pools commercial operations like ticketing, licensing, sponsorships, and NIL sales into a separate for-profit entity? What if LSU keeps full operational and athletic control? This control includes all decisions including AD staffs, coaching staffs, and student-athletes.
LSU cannot legally take a loan from LSU's Big Donors and promise to repay it.
So what if LSU's Big Donors get together with LSU. (Let's say that each individual investor has to contribute at least $100k to be involved.) LSU's Big Donors contribute to an entity (let's call it Bayou Equity) that agrees to give LSU $100 million. In return, LSU agrees to pay Bayou Equity less than 10% of LSU's sports future income stream.
Bayou Equity has only a right to 10% of the future income stream. Bayou Equity has no control over operations. LSU keeps full operational and athletic control, including decisions on coaching staffs and student-athletes.
There is literally no difference from what everyone wants and the Bayou Equity deal except that 10% of LSU's future income goes to LSU's Big Donors.
LSU gets its own angel investors and white knights to put a huge sum of money into LSU's coffers for 10% of its future income. LSU retains the right to buy it all back in five years.
Posted on 8/4/26 at 7:55 am to Salviati
This sounds much better than just a typical PE agreement.
It’s also putting a lot of pressure on football to win but I’m here for that.
It’s also putting a lot of pressure on football to win but I’m here for that.
Posted on 8/4/26 at 7:57 am to Salviati
That's how companies put themselves into financial distress.
Posted on 8/4/26 at 8:00 am to Salviati
Selling future cash flows in order to cover current/future liabilities will only create a larger deficit down the line as those budget shortfalls won't go away and future revenues will now drop by whatever the haircut is
This post was edited on 8/4/26 at 8:02 am
Posted on 8/4/26 at 8:04 am to SECCaptain
quote:Both Kelly’s and McMahon’s contracts have ending dates. Those contracts are very much in play for the current deficit. The TigerRag article in the other thread is a good read.
those budget shortfalls won't go away
Posted on 8/4/26 at 8:04 am to BrianKellysbuyout
quote:Want to know what really put LSU into financial distress?
That's how companies put themselves into financial distress.
quote:Part of this deal is a way to get past the short-term shortfall.
BrianKellysbuyout
Posted on 8/4/26 at 8:05 am to SECCaptain
Sounds like a gamble on future TV contracts.
Posted on 8/4/26 at 8:11 am to SECCaptain
quote:First, you assume that future revenues will stay at their current level. That is not a reasonable assumption. The SEC is expected to increase revenue greatly in the future.
Selling future cash flows in order to cover current/future liabilities will only create a larger deficit down the line as those budget shortfalls won't go away and future revenues will now drop by whatever the haircut is
Second, a portion of the additional money will be used to increase future revenue.
Third, the current/future liabilities (buyouts) are not going away by themselves. They will end, but they need to be paid in the interim. Any time an entity takes a loan, they are using future cash flow to pay that loan. Future cash flow will be impacted one way or the other.
This post was edited on 8/4/26 at 8:13 am
Posted on 8/4/26 at 8:12 am to Ponchy Tiger
quote:Correct and if the reporting is accurate, there would be an optional buyback after 5 years at LSU’s discretion. If exercised, it would make this a temporary move to infuse cash now.
Sounds like a gamble on future TV contracts.
Posted on 8/4/26 at 8:13 am to drizztiger
There's a $25-35 million deficit for this year. Now add another 10% of whatever the media-rights revenue is for the year to that deficit. Kelly+McMahon are being paid what this year?
This post was edited on 8/4/26 at 8:15 am
Posted on 8/4/26 at 8:14 am to Ponchy Tiger
quote:
Sounds like a gamble on future TV contracts
This, plus a gamble of coaches we have in place working out, plus maybe a gamble of somewhat of a structure being put in place in college sports down the road.
If all of those things happen, it could be a brilliant move by LSU. If none of them happen, we will have to keep kicking that can down the road.
There are people way smarter than us, with a much better insight into the future making decisions......hopefully
This post was edited on 8/4/26 at 8:15 am
Posted on 8/4/26 at 8:17 am to SECCaptain
quote:Over $10 million of the deficit is tied to those contracts. It isn’t the entire reported deficit, I understand that, but to say that the deficit will remain the same is not considering the contracts have expiration dates.
There was a $25-35 million deficit. Now add another 10% of whatever the media-rights revenue is this year to that deficit. Kelly+McMahon are being paid what this year?
Posted on 8/4/26 at 8:22 am to Salviati
Credit goes to RedEye and JR Ball.
LSU sports ventures into new capital
JR might be wrong about this deal, but he has plenty of credibility.
JR is the Co-Founder of RedEye.
He was the Associate Publisher and Executive Editor at Baton Rouge Business Report.
He was the Managing Editor of NOLA.com.
He was the Executive Editor of Tiger Rag Magazine.
He was the General Manager of the Baton Rouge Bombers.
He is the Head Lacrosse Coach at LSU.
He was the OC of the 2022 LA state champ Catholic High lacrosse team.
See also Tiger Rag Analysis: LSU Athletics’ Potential Creative Financing Plan
LSU sports ventures into new capital
JR might be wrong about this deal, but he has plenty of credibility.
JR is the Co-Founder of RedEye.
He was the Associate Publisher and Executive Editor at Baton Rouge Business Report.
He was the Managing Editor of NOLA.com.
He was the Executive Editor of Tiger Rag Magazine.
He was the General Manager of the Baton Rouge Bombers.
He is the Head Lacrosse Coach at LSU.
He was the OC of the 2022 LA state champ Catholic High lacrosse team.
See also Tiger Rag Analysis: LSU Athletics’ Potential Creative Financing Plan
This post was edited on 8/4/26 at 8:24 am
Posted on 8/4/26 at 8:22 am to Salviati
No argument here. Im sure that people have looked the numbers over and over and LSU must feel good about it if this is going forward, but there's always the potential it can backfire. A hurricane that does enough damage to cause LSU to have to move a few home games, another pandemic a global war,even though the odds are low, they aren't zero.
This post was edited on 8/4/26 at 8:23 am
Posted on 8/4/26 at 8:25 am to Salviati
10% seems too high... if you're doing this because you love the team and want to support it, I'd think something closer to the 10y or 30y bond would be appropriate and wouldn't create a long-term drag on the financials.
Sign me up at a 6% coupon.
Sign me up at a 6% coupon.
Posted on 8/4/26 at 8:27 am to Salviati
This is a great idea IMO
Where did 10% come in however? Arbitrary number?
Where did 10% come in however? Arbitrary number?
Posted on 8/4/26 at 8:27 am to austiger
They need to take the $100M, invest it and create a fund the produces annual income in perpetuity. That’s the smart play so they don’t have to do this every year.
Posted on 8/4/26 at 8:27 am to SECCaptain
quote:
Selling future cash flows in order to cover current/future liabilities will only create a larger deficit down the line as those budget shortfalls won't go away and future revenues will now drop
Yes. And furthermore this is all a GAMBLE that we win and win big. The BK disaster really put us in a bad bad position
Posted on 8/4/26 at 8:28 am to Ponchy Tiger
quote:Bear in mind that, unlike a loan with required specific periodic payments, this would be merely a payment of a percentage of revenue.
Sounds like a gamble on future TV contracts.
With a loan, you have to make specific periodic payments regardless of revenue, even if you have no revenue.
With a sharing of revenue agreement, if the revenue decreases, the payment decreases.
Posted on 8/4/26 at 8:32 am to SECCaptain
quote:
those budget shortfalls won't go away
Stop firing coaches and they just might
Popular
Back to top


15








