Update: LSU's Venture Capital Deal

[Duke Humphrey]

 

[The Peeper]

Yet around here we're talking about the Boom State, Pat McAfee, The Governors Race, our latest good read movie or series, the worst poster, etc etc etc. Anything to avoid having to discuss the 800# elephant in the corner named football. Why aren't we discussing our own $100MILLION Venture Capital Deal? Never mind....................

 

[ZombieKissinger]

That’s pretty interesting. Deals like this could open doors to new capital outside of fans

 

[patdog]

Interesting. Looks like it's basically a loan deal, and probably an expensive one. If the LSU athletic dept performs well, the PE firm gets 10% of revenues for 5 years plus the buyout at the end. If it does poorly, LSU isn't required to buy it back, but then they give up 10% of revenues in perpetuity (really until they can renegotiate the buyback at a lower price). They don't make this deal if they're not desperate for cash NOW.

 

[ckDOG]

Interesting. Looks like it's basically a loan deal, and probably an expensive one. If the LSU athletic dept performs well, the PE firm gets 10% of revenues for 5 years plus the buyout at the end. If it does poorly, LSU isn't required to buy it back, but then they give up 10% of revenues in perpetuity (really until they can renegotiate the buyback at a lower price). They don't make this deal if they're not desperate for cash NOW.

Guaranteed returns when hard up for cash always work out well***

 

[jethreauxdawg]

Wonder how VC’s will look at the shrewd deals and buyouts they like to work with Current/former coaches going forward.
“you mean y’all spend money like drunken sailors because you are in fact drunk during the negotiations?”
“Yuh beaux, da ba goo da baw, huh uh ra ra! Tigahs!!!”

 

[aTotal360]

Question...would you want to coach for a team that was powered by VC/PE money?

 

[8dog]

The “guaranteed return” is the most important

 

[jethreauxdawg]

Question...would you want to coach for a team that was powered by VC/PE money?

As long as my paycheck and buyout were guaranteed.

 

[Maroon Eagle]

As long as my paycheck and buyout were guaranteed.

You could sell purple and gold t-shirts… **

https://www.etsy.com/listing/1661310466/clampett-oil-company-t-shirt

 

[HailStout]

 

[Duke Humphrey]

So how will this affect their non-revenue sports since football revenue drives those sports? As I mentioned previously when this topic was brought up, LSU will be an interesting case because they are serious in non-rev sports (baseball, M & W basketball, gymnastics, softball) and have put real money in those sports, but they lack the Texas, Ohio State, Michigan type money.

 

[BoDawg.sixpack]

Interesting. Looks like it's basically a loan deal, and probably an expensive one. If the LSU athletic dept performs well, the PE firm gets 10% of revenues for 5 years plus the buyout at the end. If it does poorly, LSU isn't required to buy it back, but then they give up 10% of revenues in perpetuity (really until they can renegotiate the buyback at a lower price). They don't make this deal if they're not desperate for cash NOW.

I read this as ''the Chip Kelly hire broke us..''

 

[Bulldog45]

Interesting. Looks like it's basically a loan deal, and probably an expensive one. If the LSU athletic dept performs well, the PE firm gets 10% of revenues for 5 years plus the buyout at the end. If it does poorly, LSU isn't required to buy it back, but then they give up 10% of revenues in perpetuity (really until they can renegotiate the buyback at a lower price). They don't make this deal if they're not desperate for cash NOW.

Exactly how I read it. Spin it as being on the “cutting edge” but the reality is they need an injection of quick cash.

 

[patdog]

Exactly how I read it. Spin it as being on the “cutting edge” but the reality is they need an injection of quick cash.

A $100MM equity deal sounds a lot better than we had to take out a high interest rate $100MM loan.

 

[Duke Humphrey]

More information:

Sources: LSU pitches new long-term athletics funding model - Louisiana Sports

 

[TheBannerM]

That’s pretty interesting. Deals like this could open doors to new capital outside of fans

Except they're asking boosters to invest $100k a piece.

 

[patdog]

More information:

Sources: LSU pitches new long-term athletics funding model - Louisiana Sports

I think they're overselling this deal just a tad there. What a load of horse manure. This whole article sounds like the glowing movie review for a terrible movie that some critic was paid to write.

 

[Maroon Eagle]

Except they're asking boosters to invest $100k a piece.

Maybe LSU needs Bulldawg77 to make the pitches… **

 

[11thEagleFan]

Sounds like a killer deal!

As in, I could see this killing LSU athletics down the road.

 

[olblue]

Except they're asking boosters to invest $100k a piece.

Minimum

 

[615dawg]

Its not an awful deal for investors if LSU performs at a high level. Could see 20-30% returns. But thats a terrible deal for LSU.

 

[Maroon Eagle]

Its not an awful deal for investors if LSU performs at a high level. Could see 20-30% returns. But thats a terrible deal for LSU.

Just wait until LSU asks for donations from those successful investors…

 

[patdog]

Just wait until LSU asks for donations from those successful investors…

I think this is their plan. They’re trying to get the big boosters to buy into the company that buys the 10% stake. It’s a terrible deal for LSU in the face of it. But if they can claw back some of the investors profits as donations maybe not so bad. But they’re doing this because boosters aren’t contributing as much as they want now. Will they then contribute their profits?