The ghosts of Canvas Stadium debt are waving receipts in my face and cackling as I type this, but hear Jack Graham out.
While the blue bloods are putting the chess pieces in place for a college football super conference, you line up the best of the rest. Oregon State, Washington State, San Diego State, Boise State, CSU, Air Force, Army, Navy, Tulane, UConn. Get private equity to foot the bill. The Wild Card Conference, presented by Bain Capital.
Crazy? Heck, yeah, it is. But crazy left the station about five stops north.
“If someone came forward and said, ‘We’re going to form this new conference,’” the Rams alum and former CSU athletic director told me last week, “And we’re not going to just fund the conference, we’ll distribute money to the school for not just (name/image/likeness) funds, but funds that can pay players in a replacement for the broadcasting (shortfalls). If I were a private equity guy, I would underwrite that. I would look into that.”
Just like paying players, the transfer portal, unionizing and mega conferences, private equity in college athletic departments feels inevitable, doesn’t it? Last month, two major firms, Weatherford Capital and RedBird Capital, announced the formation of Collegiate Athletic Solutions, which would provide up to $200 million in private funding for athletic departments in exchange for a cut of the profits.
Crazy? Amen. But crazy jumped the fence about 35 months ago.
College football is the show business end of higher education, and the NCAA’s call to settle the class-action suit named for ex-Arizona State swimmer Grant House was strictly a business decision.
It was also a kick in the teeth for the little guys who’re barely clinging to the NCAA’s big table, none of which were specifically named as defendants in House’s original complaint. Only now they’ve got to help big brothers everywhere pay the tab.
“In effect, a tax is being imposed upon the Group of 5 schools,” Graham grumbled.
Published estimates peg the cost for a Mountain West school if the settlement is approved at roughly $500,000 per year, money that will be withheld from typical NCAA distributions such as men’s and women’s basketball payouts.
But the bigger hurdle for the likes of CSU, Wyoming or Air Force is how they tackle paying student-athletes in years to come. Yahoo Sports spitballed the added costs for a Power 5 program, going forward, at $30 million per year.
That’s going to be a tough bar for the Rams to touch, let alone clear. First, because CSU’s staring at an average of $12.2 million in annual bond payments for Canvas through 2050, an investment that was Graham’s pet project. And secondly, because $30 million is about half of what the department reported as total athletic revenues ($64.3 million) in 2022-23, its last audit to the NCAA.
“So you’ve got to find real capital from an external source,” Graham said. “Most of the presidents I’ve met … don’t have the vision. (A new conference), that’s called a ‘business risk.’ Which most of them don’t understand.”
Crazy? No doubt. But so crazy, it just might work.
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