Everyone is transfixed by conference realignment, but what Florida State is considering regarding institutional investment could be just as big of a game-changer.
While the eyes of the college sports world remain out west as we wait to figure out what the heck the Pac-12 is going to do, the Florida State Seminoles have done their best over the last few days to steal the spotlight. The latest development from Tallahassee comes via Sportico, who reported on Friday morning that FSU is working with JP Morgan Chase to explore institutional investment options like private equity to raise athletic funds.
Sportico reports that private equity group Sixth Street is the top candidate to lead such an investment, which would be a historic first in college athletics. We’ve seen such groups seep into pro sports already, most famously in global competitions like golf and Formula 1, as well as in the NBA.
We don’t know how exactly this would work at the college level. Sportico says it could be similar to what we see in the pros. That would entail FSU conferring its commercial rights to a private company, having Sixth Street (or whomever) invest in that company, then having them make back that money through future revenue earnings.
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From Florida State’s perspective, the context here is important. The Noles made headlines earlier this week when university president Richard McCullough said the school would consider leaving the ACC unless the conference changes its revenue distribution plan, which already rewards football and basketball success. FSU would prefer it also reward programs that drive greater TV impact and marketability, per ESPN.
This is all because Florida State sees itself as one of the nation’s premier football brands. However, in terms of revenue distribution, it is falling behind its peers in the Big Ten and SEC. If the Noles remain in the ACC, private equity could perhaps bridge that gap. Alternatively, institutional investment could also help the school raise $120 million to pay an ACC exit fee — though the conference still owns FSU’s TV rights for the next decade-plus as things currently stand.
It’s not entirely clear yet whether breaking this “Grant of Rights” broadcast agreement is even possible, or whether the changing landscape of college sports even makes it worthwhile to try.
Like everything else happening right now, we’ll just have to wait and see. In the meantime, the Seminoles are taking unprecedented steps to explore new avenues and ensure they won’t get left behind in the brave new world of college athletics that’s rapidly taking shape.
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