re: University of Utah nearing landmark private equity deal expected to generate $500 M

In 2008, Chicago leased their 36,000 parking meters to some private firm for an upfront payment of $1.5B. The deal is in place for 75 years.

The firm has already generated over $2B in revenue. The city also pays the firm when meters are down. They temporarily stopped running the meters during Covid. Then got sued and had to pay the firm for lost revenue.

They did it after having budget shortfalls and not wanting to raise property tax.

I could see a school leveraging away their future for some football wins this decade.

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this may be better than being at the mercy of boosters

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Boosters can be a nusiance, but at the end of the day they donate money.

Private equity owns what it touches, and will destroy it in the name of profits.

This is a very bad precedent being set for college football as a whole.

But this is the world the SEC and B1G helped create when they carved up old conferences at the whim of ESPN/Disney and Fox. Heck you could argued we started down this road with the ACC raided the old Big East for ESPN money.

In an arms race this what happens. Texas Tech and Utah got left out of the country club, so in a fight for survival they found new ways to bring in money independent of ESPN/Disney and Fox. I don't agree with it and it will hurt college football, but then again I don't agree with conferences selling out their autonomy to the Disney either.

To stop this the SEC and B1G are going have to accept some limits on spending, which mean collective bargaining, salary caps for everyone in college football. They opened the door to this world....now fix it.

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Out of Dubai correct?

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The deal was led by then-Mayor Richard M. Daley and involved investors including Morgan Stanley and the Abu Dhabi Investment Authority.

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Chicago Parking Meters LLC (CPM) is a private limited liability company formed in 2008 specifically for the purpose of acquiring and operating Chicago’s parking meter system under a 75-year lease. It is owned by a consortium of institutional investors through direct and indirect holdings, with ownership divided primarily between Morgan Stanley-affiliated entities (collectively holding approximately 50.1%) and Deeside Investments (holding 49.9%).

Deeside Investments, Inc. (49.9%): A Florida-based holding company that owns the remaining stake. It is indirectly owned by:
• Abu Dhabi Investment Authority (ADIA): 49.9% of Deeside (UAE sovereign wealth fund)
• Redoma S.a.r.l.: 50.1% of Deeside (a Luxembourg-registered private investment vehicle)

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The firm has already generated over $2B in revenue. The city also pays the firm when meters are down. They temporarily stopped running the meters during Covid. Then got sued and had to pay the firm for lost revenue.

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This also prevents them from doing a ton of infrastructure work because the city needs to pay the lost revenue penalty.

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This also prevents them from doing a ton of infrastructure work because the city needs to pay the lost revenue penalty.

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Reminds me of all the various toll road scams across the country. "Oh yeah we'll help w/your highway construction, just let us get the money back via tolls and once it's paid off it'll be your road!" Then 20 years later it suddenly becomes "Oh it's just easier if we keep running this as a toll road. Also, we should build some more of these!"

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Are we going to look up in 20 years and see something like Chicago and their parking meter disaster with these private equity deals?

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It could pay off big time in the near term for some schools. But what you will see long-term is that schools will have their football programs shut down. The PEGs will come to a point where they just aren't making the money they think they should on the football enterprise or they will have leveraged the hell out of the entity and they will shut it down. There will be so much weeping and crying and calls for the University to re-assume control of the football operations for their school.

There will be some dark times ahead for some schools that choose this path. It is not if it happens, it is when it happens.

LSU's new arena is already being funded via private equity. Housing projects at public universities all over the country have private equity partners.

This isn't new, just a next step.

Going to be awesome having Sam in India as your season ticket rep for Utah fans