It was a positive step after a series of high-profile failures that have ranged from officiating controversies to revenue shortfalls.
To give the conference a lift, Pac-12 commissioner Larry Scott is said to have concocted a plan unlike anything in college sports. Late last year, he reportedly pitched university presidents on selling 10% of the conference's commercial assets—mostly made up of broadcasting rights, merchandising, etc.—for $500 million to a private equity firm at a valuation of around $5 billion. The assets would be bundled under a holding company dubbed "Pac-12 NewCo."
Now, that valuation might seem lofty for a network that just two years ago had one of its marquee games of the season bumped by a NASCAR truck race. And so far, there have yet to be any reports of private equity firms showing interest. But there's certainly value to be unlocked, given the conference will likely enter into a billion-dollar rights deal with a major network in 2024. In a recent interview with The Oregonian, Dallas Mavericks owner/Shark Tank star Mark Cuban said private equity firms would be "intrigued" in buying a stake.
As for an exit strategy, a Raine Group exec told Pac-12 scribe Jon Wilner that the eventual plan could be to take "Pac-12 NewCo" public.
But which private equity firms might be interested? Would a firm really want to team up with a league that appears to have a litany of issues without receiving much, if any, control in return?
That remains unclear. But here are four private equity investors that could make sense as a Pac-12 partner:
Apollo Global ManagementWhile it hasn't traditionally been known as a big player in the media space, Apollo Global Management has shown increasing interest in the television industry. In February, the firm struck a deal to acquire a majority stake in 13 TV stations from Atlanta's Cox Enterprises, along with the company's newspapers and radio stations in Ohio. In addition, the firm has reportedly shown interest in acquiring the regional sports networks that Disney is being forced to sell as part of its roughly $71 billion acquisition of 21st Century Fox—even asking LeBron James' media company, Uninterrupted, to partner in a deal.
Perhaps Apollo would want to add another network to its portfolio using its nearly $25 billion flagship buyout fund?
TPG CapitalWith headquarters in San Francisco, TPG Capital would make sense as a strategic partner from a geographic perspective. The firm also some experience making a growth investment in a media company at around the valuation being sought by the Pac-12. In 2017, the firm invested $450 million in Shane Smith's Vice Media at a valuation of some $5.7 billion.
The firm also has experience in television, most notably when it acquired Spanish television station Univision along with a host of other PE firms in 2007 for $13.7 billion. While Univision has since struggled with a large debt load, dropping ratings and executive turnover, and with Vice announcing last month it would cut 10% of its workforce to try and become profitable, perhaps TPG has learned from those struggles.
Also, Joe Ravitch, a Raine Group executive leading the Pac-12's efforts, serves as a board member at Vice. Perhaps that could open a door to the Pac-12 engaging with TPG.
KKRKKR is annually one of the most active private equity firms in the US. And it has plenty of capital, with $195 billion in AUM, per its latest earnings report.
The firm also features a TMT growth team that operates out of Menlo Park and invests in a range of industries including software, security, IoT and digital media. It knows a little about sports, too, having led a $275 million Series E in daily fantasy sports company FanDuel in 2015. Might KKR want to dip into its $711 million Next Generation Technology Growth Fund and partner up for another deal?
SoftBankWith its $100 billion Vision Fund, SoftBank has seemingly been handing out nine-figure checks like a Pez dispenser dishes out delicious little candies.
Nothing would grant Scott a little wiggle room with his bosses like announcing a massive investment from the most high-profile investor in the tech industry—just don't tell them about the connections to Saudi money.
Related read: The Pac-12 wants a $500M investment from private equity