re: Can LSU's Dreams Come True? What If LSU Big Donors Contribute $100 Million for 10% Income?

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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.

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Where is the ROI, and what does it realistically look like? There's a reason that consistently operating at a deficit eventually leads to difficult outcomes. At some point, layoffs, asset sales, or even breaking up and selling portions of a company become the only viable paths to generate returns for investors.

The involvement of the government (meeting at the Louisiana Governor's mansion means Government is involved) doesn't necessarily ease those concerns. If anything, it raises additional questions. Governments have a long history of running deficits and pushing financial challenges further down the road rather than solving them outright. Those accumulating deficits can contribute to rising costs across everyday life. If that same mindset finds its way into this situation, what does that mean for ticket prices? Do they double? Triple? Become even less affordable?

I don't view this as an outright positive, but I don't necessarily see it as a negative either. My biggest concern is the lack of information and the uncertainty surrounding how this will ultimately be structured and managed. Revenue streams such as sponsorships, media rights deals, jersey patch agreements, and expanded marketing partnerships make far more sense to me because they generate cash flow without introducing the same questions that come with private equity investment or creating a private equity vehicle to work around financial limitations.

What I do take issue with is the attempt to portray this as an unquestionable win. At this stage, that's simply not an honest assessment. There are too many unanswered questions, too much uncertainty, and not enough transparency to confidently label it a complete positive. Doing so feels disingenuous.

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Do you expect expenses to increase or decrease as revenue increases?

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I expect revenues to increase more than expenses.

Where are the big donors everyone was talking about all summer? Campbell alone would give Texas Tech 100mil if needed. Sounds like we don't have the extreme commitment necessary to sustain this type of spending. We need Playoff wins to infuse more revenue into the AD.

Acting like this is just LSU’s donors finally making a little bit of money back is ignorant. It’s better than an outside firm coming in solely for the money, but it’s still far from a great situation.

This will be just like any other PE investment. They will be given a certain ROI percentage and guaranteed some control over financial decisions. If that ROI isn’t met, they will be able to exercise that control to increase revenue however they see fit to get it.

Maybe the LSU donors won’t care about their ROI, or maybe they will do what everyone else does when you start fricking with their money.

This isn’t nearly as clean and tidy as you want to believe.

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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.

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The problem is that the $100 million is a one time cash infusion for LSU, while giving up 10% of income in perpetuity. So after LSU burns through that $100 million by going all-in on chasing titles in the short term, then we're disadvantaging ourselves in the long term by having to continually give up 10% to the "big donors" aka investors.

In 10 years when that original $100 million is gone and we're still wanting to compete for championships, is LSU going to try to sell off another 10% equity stake for another cash infusion from "big donors"?

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This isn’t nearly as clean and tidy as you want to believe.

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Yeah the spin is a bit out of control on this one. Starting with the "first of its kind" branding. There's a reason that other schools haven't gone down this road.

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Acting like this is just LSU’s donors finally making a little bit of money back is ignorant. It’s better than an outside firm coming in solely for the money, but it’s still far from a great situation.

This will be just like any other PE investment. They will be given a certain ROI percentage and guaranteed some control over financial decisions. If that ROI isn’t met, they will be able to exercise that control to increase revenue however they see fit to get it.

Maybe the LSU donors won’t care about their ROI, or maybe they will do what everyone else does when you start fricking with their money.

This isn’t nearly as clean and tidy as you want to believe.

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**You think

Stop talking like you know this for a fact.

No one knows, it’s all speculation right now.

This isn’t nearly as terrible and awful as you want to believe.

RB10

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No one knows, it’s all speculation right now.

This isn’t nearly as terrible and awful as you want to believe.

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You contradicted yourself in back to back sentences. Quite a feat.

Don’t everyone just love what has become of college sports.

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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.

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.

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Interested to know how you see them increasing revenue.

Games sell out already
Concessions are already ridiculous
Parking has already been ruined

Football is becoming less popular among college age students as a whole.

Make no mistake about it... youre conflating winning with making more money without identifying actual mechanisms that make more money.

You can do three things.
1. Increase volume of sales
2. Increase profit per sale
3. Reduce costs

Newsflash... youre not reducing costs if youre trying to win championships.

Your whole philosophy is based on winning == more money.

Its like you got a room full of entrepreneurs and zero ops guys.

My point is, this is short term thinking, not long term.

And psychologically, its stupid as hell. Its liking giving a bunch of money to a woman that was already seeing you for nothing, just because she liked you. Now, youre a cash cow to her. She will never see you the same again.