The Big Ten's proposed $2.4-billion private equity deal got derailed this week.
Michigan Public sports commentator John U. Bacon joined Morning Edition host Doug Tribou to talk about what the deal would have done and why it stalled.
Bacon also discussed a highly unusual win for the Michigan football team and the Pistons' 11-game winning streak.
Football this weekend:
Michigan State at Iowa - Sat., 3:30 p.m.
Michigan at Maryland - Sat., 4:00 p.m.
NBA:
Detroit Pistons at Milwaukee Bucks - Sat., 8:00 p.m.
Doug Tribou: This week a proposed deal that would have given a private equity firm a stake in the Big Ten stalled after strong opposition by the University of Michigan and the University of Southern California. The $2.4 billion plan has the support of Big Ten commissioner Tony Petitti. The firm, UC Investments, would front money that would be distributed to Big Ten members and in exchange it would get a 10% stake in the conference — essentially a slice of the Big Ten’s media and sponsorship revenues. What’s going on between the lines here, John?
John U. Bacon: Well, a couple of things. This is basically pay me now or pay me later. So the 16 Big Ten schools that want the money want "pay me now." They're broke. So a lot of these [athletic departments] are deep in the red by hundreds of millions of dollars. It's pretty bad, so they're desperate. Michigan is not desperate. USC is not desperate.
And the second thing is, this is probably a very bad deal for the Big Ten ultimately.
DT: And some of what's going on here is the new landscape, which you and I have talked about at length, with Name Image Likeness money and the new rules for spending to pay athletes directly under the House settlement. And this is one way that some schools are considering looking at funding all of that.
JUB: Well, exactly right. Look, they're all desperate. It's the Wild West. And as you and I have said how many times, Doug, no one knows what's going on, and there are no rules, basically. So everyone's broke except for those who are very rich.
DT: [Laughs] You know, it's not surprising at all that a college sports organization, in this case, the Big Ten, is looking for ways to bring in more revenue. But what is surprising to me is that the conference, which is more powerful now than it's ever been — it's consolidated, it's added more members — it is very surprising that the Big Ten would consider seeding even a portion of that power and control to an outside entity.
Are you expecting to see more variations of this, or even a revised version of this deal in the future?
JUB: Oh, I'm sure you're right. Hundreds of millions of dollars, billions of dollars in TV and so on are coming in. And yet, truly, most of the athletic departments in the country, including the wealthiest conference in the country, the Big Ten, they're losing money. Now, maybe you can say they're fiscally not wise. That's the nicest way to put it. But nonetheless, there they are.
They're desperate. They need more money now, so they're ripe pickings, I believe, for somebody like the UC system to tempt an investment, basically. It's not going to end well, though.
DT: Well, we'll keep following that story as it plays out. Let's turn to some actual sports. Michigan is No. 18 in the College Football Playoff rankings. The Wolverines snatched victory from the jaws of defeat with a last-second field goal to beat Northwestern at Wrigley Field in Chicago last weekend. Any big, ahem, "takeaways" from that one for Michigan?
JUB: [Laughs] Well, you know, Doug, since you asked...
DT: [Laughs]
JUB: Michigan had five turnovers in that game and Northwestern had zero. This is the first time since we've been keeping track of all these stats — out of 15,000 some games — that that has ever happened. The first time ever in the history of college football that a team gave up five takeaways, took none, and still won the game. So, they did it the hard way.
DT: And Michigan State will take another crack at ending its losing streak Saturday. The Spartans have lost seven straight. They will be on the road against Iowa.
The Pistons are hot. Really hot. Detroit's won 11 straight games. It's their longest winning streak in 18 years. Just a couple short of tying the franchise record. They're in first place in the Eastern Conference. What stands out to you about the run the Pistons have been on lately?
JUB: Well, the craziest part is in one of those games that they won, they had all five starters out. And that included you know, [star guard] Cade Cunningham. And Ausar Thompson missed four games in that stretch.
This is coaching, man. You just can't escape it because yes, they've got some good players. The players are clearly playing well. But J.B. Bickerstaff is putting in one of the best coaching jobs I have ever seen.
Editor's notes: Some quotes in this article have been lightly edited for length and clarity. You can hear the full interview near the top of this page.
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