Private equity has long made its living turning around distressed companies.

Could the industry revive a struggling college sports league?

The Pac-12 Conference is seeking a $500 million investment from a private equity partner for a 10% stake in the league's TV network and other commercial assets, according to The Oregonian. A possible deal could reportedly value the new business at between $5 billion and $8.5 billion, per the conference's plans. It would also include broadcast and sponsorship rights, merchandising, and distribution agreements.

It's unclear if any formal discussions between the Pac-12 and potential investors have begun.

Embattled Pac-12 commissioner Larry Scott presented the plan to Pac-12 leadership last November, per the report, and if a deal is struck, it could provide the conference's 12 schools with nearly $42 million apiece. The money is much-needed. The Pac-12 Network has struggled to generate revenue comparable to other Power Five conferences such as the SEC and the Big Ten, the latter of which is set to distribute $15 million-plus more annually to its schools than the Pac-12 currently does to its member institutions.

Why would a PE firm be interested in such a deal?

In 2011, the Pac-12 signed a 12-year television contract with ESPN and Fox worth some $3 billion. The deal expires in 2024 and the upcoming contract could provide a nice cash infusion within a typical five-to-seven-year investment timeline. And an investor wouldn't have to do much in the meantime other than front the money, since a proposed deal from the Pac-12 would see the conference retain operational control.

But any firm would be attaching itself to a league that's been criticized for spending too much on its conference headquarters in downtown San Francisco, overseen a raft of high-profile officiating errors in football, and failed to produce a team that reached the College Football Playoff in three of the past four years, plus other controversies. The Pac-12 has responded by hiring FleishmanHillard, a PR agency that specializes in crisis management, again per The Oregonian.

When the conference created its own network following the deal with ESPN and Fox, it touted that the Pac-12 Network was independently owned and thus would get 100% of the proceeds. But that arrangement so far hasn't been very lucrative. The conference has failed to strike a deal with DirecTV because of a disagreement over media rights, costing the Pac-12 millions and hurting its national exposure. Meanwhile, Scott himself has drawn criticism for his $4.8 million salary, per a USA Today report, which was more than double his Big Ten and SEC peers in 2016.
 

Related read; What's up with that VC-backed football league?

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