RTB Twitter Bot
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| FTBL the PAC-12 reportedly has multiple bids of $750 million for a 15% stake in the league's media holdings.
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OldPlayer
Member
Non-profit doesn't mean they don't make money
TerryP
Staff
Equity investments and non-profit tax status aren't bed fellows.
OldPlayer
Member
Making money and making more money, are.
TerryP
Staff
I don't think we're on the same page here, OP.
Overall picture as I see this:
- The PAC is now selling rights by equity investments in the conference itself.
- The PAC, home of one Ed O'Bannon, and his lawsuit against the NCAA.
- Imagine the PAC in court under the same scenario as O'Bannon. Where's the basis for defending their "amateur status?" This isn't the conference, or the NCAA, making money off of athletes and their likeness, but private individuals investing money with these kids as their source of said income.
- Which brings me back to the original thought...
Considering @It Takes Eleven knows more about these statutes than likely anyone else here I'm wondering what his thoughts are ...
How do they balance this out. How to they reconcile the idea? Equity investments in athletes versus non-profit, tax exempt status. Hey, maybe I'm off base completely here but in my view ... it just doesn't fit.
"Human sacrifice, dogs and cats living together... mass hysteria!"
OldPlayer
Member
I understand what you're saying, but this has nothing to do with amateurism. This isn't about the athlete. If the conference were to take their funds and invest them in high growth stocks, is that okay? If the conference sells their media rights for 2x their current price (bare with me. I know it's the PAC12 but I'm just making an example), is that okay? IMO, it's uncomfortable because it hasn't been done before. We also don't know if any person or company sees it as a good investment. It sounds to me that the conference is looking for ways to generate $$$ by selling some of the few elements they control.
I haven't looked at this yet, but I will. There are many entities set up to be non-profits who then establish for-profit subs. Our local EMC in Kennesaw did that, and the long-time CEO of it got caught lining his pockets through the subs. it's complicated, for sure.
planomateo
Member
First question, is the Pac-12 conference media rights really worth $5 Billion? I'd have to crunch some numbers, but my gut tells me that's way too high for them, by as much as 50%.
Aren't they are in this situation because Larry Scott opted to go a different direction on conference media rights, Larry Scott isn't signing up major players (DirecTV as an example), and poor conference performance (not Larry's fault)?
So he's stuck and definitely thinking outside of the box to solve the problem of losing ground to every other conference. It's going to get ugly quick if they can't fix this...in 10 years, they'll be down $200-$500 million per school from the rest of the conferences. That's alot of money.
Aren't they are in this situation because Larry Scott opted to go a different direction on conference media rights, Larry Scott isn't signing up major players (DirecTV as an example), and poor conference performance (not Larry's fault)?
So he's stuck and definitely thinking outside of the box to solve the problem of losing ground to every other conference. It's going to get ugly quick if they can't fix this...in 10 years, they'll be down $200-$500 million per school from the rest of the conferences. That's alot of money.
TerryP
Staff
@OldPlayer, the comment about amateurism was a side thought on what happens if this comes to fruition. I'm not lawyer, and don't claim to know a lot about how the ruling went down with O'Bannon, but I see a disconnect with the whole "they're amateurs" and "their conference has equity partnerships." It just doesn't seem like they'd have a leg to stand on if they go this route while continuing to claim the other.
If the conference takes their funds and invests them is quite different than soliciting those funds from outside sources. I too see what you're saying about conferences investing their own money. I still see a disconnect and doesn't make sense to me.
Invest in a non-profit and make profit through having ownership in said non-profit. The conference is generating revenue, not for itself in the long run, but for their investors. Yet, they can claim tax exempt status on their earnings as a conference when it's money that isn't derived from (in this case) sporting events?
If they are selling a portion of "themselves" for money how should they be able to continue in their current tax status?
Color me confused ... with permanent ink.
If the conference takes their funds and invests them is quite different than soliciting those funds from outside sources. I too see what you're saying about conferences investing their own money. I still see a disconnect and doesn't make sense to me.
Invest in a non-profit and make profit through having ownership in said non-profit. The conference is generating revenue, not for itself in the long run, but for their investors. Yet, they can claim tax exempt status on their earnings as a conference when it's money that isn't derived from (in this case) sporting events?
If they are selling a portion of "themselves" for money how should they be able to continue in their current tax status?
Color me confused ... with permanent ink.
TerryP
Staff
Steve offers a what if here but even still it's so indicative of what the PAC has offered its viewers. Yes, part of it is how Scott decided to handle the media rights and part of it has to do with what they've chosen to air on their own "networks."
