MUScoop
MUScoop => The Superbar => Topic started by: Eldon on October 22, 2013, 10:26:46 PM
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Huggins on travel transition from Big East to Big XII: He no longer sees many WVU fans at road games.
https://twitter.com/AllanTaylorWVU/status/392653619582873600
Apparently, his east coast recruiting has also dropped off significantly since the move.
I actually miss playing WVU
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Huggy could take it and give it like no other. MU fans loved to hate on him and then tip a few at Turners with him post game while his teams were left to stew on the bus. Do miss his cruise wear on the sidelines, though.
Everyone said at the time this was a bad move. Lover's regret settling in. Old Man Luck may be the only winner if he gets the Texas job. Ames Iowa is the closest school.
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I have no idea how WVU football is doing, but if they're happy, nobody cares how Huggy Bear feels.
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Huggins on travel transition from Big East to Big XII: He no longer sees many WVU fans at road games.
Hey, YOU try driving this thing all the way to Texas, especially when it's already made one trip to Californny:
(http://www.prewarbuick.com/img/features/jed_clampetts_buick/b472f7e0.jpg)
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Everyone said at the time this was a bad move. Lover's regret settling in. Old Man Luck may be the only winner if he gets the Texas job. Ames Iowa is the closest school.
It wasn't a bad move considering their only other option at the time was staying in what is now the AAC. The B12 is making $20M per school from television rights. The AAC is making less than a fourth of that.
http://espn.go.com/blog/playbook/dollars/post/_/id/3163/a-comparison-conference-television-deals
And yeah, they didn't know that Maryland would leave for the B10 and open up a spot in the ACC...but I think that they *still* would have taken Louisville. WVU made the best move it could at the time. Knowing what they know now, they would do the same thing.
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If running huge deficits to start (and not understanding the value of cash flow) and creating an apathetic fan base is success, so be it. Already they asked for a subsidy for Olympic sports com the Big12. The jury is still out.
http://www.wvgazette.com/Sports/201302130235
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If running huge deficits to start (and not understanding the value of cash flow) and creating an apathetic fan base is success, so be it. Already they asked for a subsidy for Olympic sports com the Big12. The jury is still out.
http://www.wvgazette.com/Sports/201302130235
They're not full members as far as money the conference pays them until July of 2015? Whoops.
The basketball team is playing three road games to start the B12 season so they can knock three of their nine out before the spring semester starts up. Due to distance of travel and the time change, there was almost no point in going back to Morgantown if they had to play two road games within three days of each other.
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If running huge deficits to start (and not understanding the value of cash flow) and creating an apathetic fan base is success, so be it. Already they asked for a subsidy for Olympic sports com the Big12. The jury is still out.
http://www.wvgazette.com/Sports/201302130235
As I read that article, the deficits are in part due to their previous membership in the Big East and not getting a full share of B12 revenue. Staying where they were made it easier for fans to travel to road games, but wasn't going to solve the revenue problem.
Do I think WVU is a good fit in the B12? Absolutely not. It is an absurd place for them to be. But it was the best choice available to them. And the best way for them to fight off fan apathy is to win. And there is no reason why they can't do that.
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It wasn't a bad move considering their only other option at the time was staying in what is now the AAC. The B12 is making $20M per school from television rights. The AAC is making less than a fourth of that.
http://espn.go.com/blog/playbook/dollars/post/_/id/3163/a-comparison-conference-television-deals
And yeah, they didn't know that Maryland would leave for the B10 and open up a spot in the ACC...but I think that they *still* would have taken Louisville. WVU made the best move it could at the time. Knowing what they know now, they would do the same thing.
Agree 100%. Sure, they'd probably rather be in the ACC right now. But how would they have known how stuff would have gone down. I still think its most likely they would have ended up in the AAC, as Sultan stated. Maybe they would have had more convenient travel but that would have been a step down from the Big XII. The grass is always greener...
I don't know what the likelihood of this would have been but it actually seems to me the SEC might have been the best fit for WVU's profile. I have no idea if that was ever even considered, but I think that would have been the ideal move for them.
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I think WVU was snubbed by the SEC when they eventually chose Missouri to pair up with Texas A&M. In fact, I am pretty sure the B12 took WVU to replace Missouri actually.
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I went into an analysis at the time for these departing schools I posted here...the value of cash today (exit fees, NCAA credits, etc.) versus added TV revenue in the future. It was different in every case and there were a lot of assumptions...but in some cases the payouts were 15 years conservatively. If you are a new business or product, if you are not making it in years 3-5, it is a failure. For non-profits, their thought stream is to run deficits and raise taxes or get donors to give more to cover. In these long, back ended deals, assuming that the projected media revenues (with years of clauses) will be there in 15 years...or the league in this case, is fool's gold.
In the last realignment period, those who panicked were the losers (WVU. AAC) those who jumped first were winners, as were those who waited (UL, ND, Legacy BE). In this case, the years of incremental TV dollars for WVU to cover these self-inflicted blood letting losses with the forfeitures upfront is a loser...the AAC would have been a better value for them...and I am not even getting into an uninvolved and distanced fan and donor base. Morgantown ain't NYC but it is better than Waco, Manhattan KS or Ames to visit.
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Morgantown ain't NYC but it is better than Waco, Manhattan KS or Ames to visit.
I'm sure it is...
(http://irishrainphotography.com/irishrain/wp-content/uploads/2012/06/Cousin-hillbilly-beach-party-june-2012-1-of-1.jpg)
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I went into an analysis at the time for these departing schools I posted here...the value of cash today (exit fees, NCAA credits, etc.) versus added TV revenue in the future. It was different in every case and there were a lot of assumptions...but in some cases the payouts were 15 years conservatively. If you are a new business or product, if you are not making it in years 3-5, it is a failure. For non-profits, their thought stream is to run deficits and raise taxes or get donors to give more to cover. In these long, back ended deals, assuming that the projected media revenues (with years of clauses) will be there in 15 years...or the league in this case, is fool's gold.
If you can find that post, I would like to see it.
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If you can find that post, I would like to see it.
Same here
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Am busy so won't be able to go back and besides so much has changed...so here is a detailed version of two choices. Going with these premises: when the BE football teams first split, they had an offer on the table allegedly of $12mm per football school. WVU took the phased in deal leading up to $20mm per year...or $8mm more than they would have had per year if they stayed. It cost WVU $20mm to exit, plus another $10mm in forfeited NCAA credits and loan interest. So $30mm cash they gave up to earn $8mm more per year in media.
So two choices: keep the $30 and stay put but invest that from Day 1 to earn on average 10% per year. Reasonable annual return. Second choice is to do what WVU did and exit.
By year 12, just by earning interest, WVU would have been making over $8mm per year on interest income if they didn't switch....by then more than the TV money to switch. By switching conferences, it will take WVU five years just to pay off the exit fees which from the article seems about right with reality. If no switch, WVU would have $44mm in cash in holdings versus $5mm now in the Big 12 at Year 5. At the end of 20 years, it is $183.4mm versus $125mm in the Big12. WVU will never catch up.
So the schools that panicked are financial losers...and caused their own troubles by running off in a cold sweat. So by dividing them, ESPN conquered. The Judas Schools were better off financially holding firm...but they don't think that way...they think...oh I am making more money on TV today...and will break even in Year 5. But forget that they had give up $30mm in cash today.
The Catholic 7 used their exit money to buy existing assets, exited on negotiated terms, while doubling their per school TV deals. They won.
While you will hear the arguments about best available deal, football is king, etc excuses...in fact they sold on panic. WVU made a bad deal financially and for their fans and student athletes. ND and UL waited things out, earned more credits and exit fees, and will exit gracefully and on favorable negotiated terms both going and coming into the new.
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I'm sure it is...
(http://irishrainphotography.com/irishrain/wp-content/uploads/2012/06/Cousin-hillbilly-beach-party-june-2012-1-of-1.jpg)
Nice FUPA on the broad on the right
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Just a springboard to bounce off of, hey?
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Nice FUPA on the broad on the right
Meh... WVU's endowment is just big enough that it shouldn't get in the way.
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Am busy so won't be able to go back and besides so much has changed...so here is a detailed version of two choices. Going with these premises: when the BE football teams first split, they had an offer on the table allegedly of $12mm per football school. WVU took the phased in deal leading up to $20mm per year...or $8mm more than they would have had per year if they stayed. It cost WVU $20mm to exit, plus another $10mm in forfeited NCAA credits and loan interest. So $30mm cash they gave up to earn $8mm more per year in media.
So two choices: keep the $30 and stay put but invest that from Day 1 to earn on average 10% per year. Reasonable annual return. Second choice is to do what WVU did and exit.
By year 12, just by earning interest, WVU would have been making over $8mm per year on interest income if they didn't switch....by then more than the TV money to switch. By switching conferences, it will take WVU five years just to pay off the exit fees which from the article seems about right with reality. If no switch, WVU would have $44mm in cash in holdings versus $5mm now in the Big 12 at Year 5. At the end of 20 years, it is $183.4mm versus $125mm in the Big12. WVU will never catch up.
So the schools that panicked are financial losers...and caused their own troubles by running off in a cold sweat. So by dividing them, ESPN conquered. The Judas Schools were better off financially holding firm...but they don't think that way...they think...oh I am making more money on TV today...and will break even in Year 5. But forget that they had give up $30mm in cash today.
The Catholic 7 used their exit money to buy existing assets, exited on negotiated terms, while doubling their per school TV deals. They won.
While you will hear the arguments about best available deal, football is king, etc excuses...in fact they sold on panic. WVU made a bad deal financially and for their fans and student athletes. ND and UL waited things out, earned more credits and exit fees, and will exit gracefully and on favorable negotiated terms both going and coming into the new.
I know you said that so much has changed, but I just see a few faults in your analysis.
1. A presumed 10% annual return isn't a reasonable amount. I would guess that 7% at best would be reasonable.
2. The AAC deal is half of what the BE deal wass worth. So their choice was between $20M that the B12 offered and $5M that the AAC is making.
3. There are other sources of income that make the B12 more lucrative....such as bowl revenue. But that would be offset by higher costs. Not sure what that would be though.
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Nice FUPA on the broad on the right
There's FUPA and then there's FUPA...
(http://thechive.files.wordpress.com/2010/03/funny-fupa-13.jpg)
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There's FUPA and then there's FUPA...
(http://thechive.files.wordpress.com/2010/03/funny-fupa-13.jpg)
you leave JayBee's girl out of this dammit.
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I know you said that so much has changed, but I just see a few faults in your analysis.
1. A presumed 10% annual return isn't a reasonable amount. I would guess that 7% at best would be reasonable.
2. The AAC deal is half of what the BE deal wass worth. So their choice was between $20M that the B12 offered and $5M that the AAC is making.
3. There are other sources of income that make the B12 more lucrative....such as bowl revenue. But that would be offset by higher costs. Not sure what that would be though.
Comments: 1). from 2009-2012 stocks went up 14.54%...and are close to 18% this year. These are the years WVU made their decision. Your 7% comes in years of big crashes and corrections, and way before their decision was made. 10% over the long-term like 20 years is pretty standard (stock growth plus dividends). Of course there are flaws as with that as compound interest is not always positive...but it is also not just 10% either.
http://pages.stern.nyu.edu/~%20adamodar/New_Home_Page/datafile/histretSP.html
2). WVU was not around with the AAC scraps for their TV deal nor were the other traitors. However, they all walked away from a reported $12mm ESPN deal in panic mode to keep the original Big East together. That is my comparison point: when they made their decision to jump ship. Two others, UL and ND, waited it out and got better deals. UL has to be thanking God the Big 12 didn't want them. If the Judas Schools stayed together, would they have received a 100% increase in TV revenue from FS1 that the basketball schools eventually got by waiting? A lot of "what ifs?" one could play here.
3). Bowl games were available to WVU in the Big East, even an automatic bid. Which is worth more? A big fish in a small pond you could argue was worth more...and a reason UL stuck it out for a while. WVU has finished in the lower half of the B12 in football...are the rest of the schools earning big dollars in an equal revenue sharing scheme? Not sure but I thought UT and OU have sweetheart deals.
So, I am sure you can find faults...and present alternative scenarios...but I am just presenting one that reaffirms what the article said: WVU's was not well thought out and they are feeling it just as my model says they would. There were better deals to be had for some of these schools...not the ones selling on panic. I find it funny they are bitching about the deal they made now.
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Comments: 1). from 2009-2012 stocks went up 14.54%...and are close to 18% this year. These are the years WVU made their decision. Your 7% comes in years of big crashes and corrections, and way before their decision was made. 10% over the long-term like 20 years is pretty standard (stock growth plus dividends). Of course there are flaws as with that as compound interest is not always positive...but it is also not just 10% either.
http://pages.stern.nyu.edu/~%20adamodar/New_Home_Page/datafile/histretSP.html
2). WVU was not around with the AAC scraps' TV nor were the other traitors. However, they all walked away from a reported $12mm ESPN deal in panic mode to keep the original Big East together. That is my comparison point: when they made their decision to jump ship. Two others, UL and ND, waited it out and got better deals. UL has to be thanking God the Big 12 didn't want them. If the Judas Schools stayed together would they have got a 100% increase in TV revenue from FS1 that the basketball schools eventually got by waiting? A lot of "what ifs?" one could play here.
3). Bowl games were available to WVU in the Big East, even an automatic bid. Which is worth more? A big fish is a small pond you could argue was worth more...and a reason UL stuck it out for a while.
So, I am sure you can find faults...and present alternative scenarios...but I am just presenting one that reaffirms what the article said: WVU's was not well thought out and they are feeling it just as my model says they would. There were better deals to be had for some of these schools...not the ones selling on panic. I find it funny they are bitching about the deal they made now.
10% average return is pretty bullish. We might have had that in the 20th century, but I doubt we will have that over the course of the remainder of my lifetime...
I'll be happy with 6%. I'll be able to retire comfortably with that.
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10% average return is pretty bullish. We might have had that in the 20th century, but I doubt we will have that over the course of the remainder of my lifetime...
I'll be happy with 6%. I'll be able to retire comfortably with that.
Last five years will come in about 15%...a dividend stock will get you half of your 6%. WVU is also a non-profit unlike you and I.
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I know you said that so much has changed, but I just see a few faults in your analysis.
1. A presumed 10% annual return isn't a reasonable amount. I would guess that 7% at best would be reasonable.
You're right. A 10% uptick is an outrageous assumption. If my private equity funds performed that poorly I would be upset, too.
Oh, wait, you thought 10% was too high?? I guess if you are into munis your expectations are different.
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You're right. A 10% uptick is an outrageous assumption. If my private equity funds performed that poorly I would be upset, too.
Oh, wait, you thought 10% was too high?? I guess if you are into munis your expectations are different.
I will ignore your daily brag-point to say that I did some look into the NACUBO Endowment returns and 10% is indeed a reasonable assumption.
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I will ignore your daily brag-point to say that I did some look into the NACUBO Endowment returns and 10% is indeed a reasonable assumption.
I looked up the performance of the Harvard Management Company and the $32.7 billion Harvard Endowment has enjoyed an average annual return of 16% over the past 30 years. HMC performance for the past year was 11.3% and 11% for the past 3 years. Distributions from The Endowment provides more than a third of the University's operating budget, including creative financial aid solutions and leading edge research and educational initiatives.
Michigan's $8.8 billion University Endowment has delivered an average annual return of 16% over the past 30 years. The one year increase was 24.8% and 14.2% for the past 3 years.
It is important to note that 50% of Michigan's University Endowment is in illiquid alternative assets while 38% of Harvard's portfolio is thusly invested. Both Endowments use these hedges to provide intergenerational equity. Think how much better the return if either could have been more fully invested in equities.