December 10, 2025 • 19 mins
Catch “The Drive with Spence Checketts” from 2 pm to 6 pm weekdays on ESPN 700 & 92.1 FM. Produced by Porter Larsen. The latest on the Utah Jazz, Real Salt Lake, Utes, BYU + more sports storylines.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
For YouTube viewers, you should tune in to see Trevor Riley.
Speaker 2 (00:03):
Oh, he took the hat off, but.
Speaker 1 (00:04):
He does have the sunglasses on. Let's make sure all
the microphones are on. Trevor Riley, how are you, buddy?
Speaker 3 (00:10):
Doing great?
Speaker 2 (00:11):
Great to see you.
Speaker 1 (00:12):
And the best looking man in the bunch is actually
dressed very nicely in a jacket and a shirt.
Speaker 2 (00:18):
He is my younger brother. He is much smarter than
I am.
Speaker 1 (00:21):
I like to brag that I'm the least intelligent checked
child or sibling.
Speaker 2 (00:26):
Andrew Jackets, how are you, buddy, Hey Spencer, good to
be here. Hey, it's great to see you.
Speaker 1 (00:30):
So Andrew is with the SINO short check it's fund
And how long have you made your way in the.
Speaker 2 (00:34):
World of private equity?
Speaker 4 (00:36):
For the last ten years as a consultant in five
directly in private equity through being Capital and KKR.
Speaker 1 (00:42):
And you can allow me to brag for you a
Wharton Business school lum. So very very intelligent and very
aware of this world that now we all find ourselves in.
So on this show, as Trevor knows, I've talked about
the inevitability of private equity permeating through college athletics, for
maybe five years when nil became a reality, the transferport
(01:05):
became a reality.
Speaker 2 (01:06):
You help us understand why this would be.
Speaker 1 (01:10):
Something that private equity would look at as something that
could benefit them when it comes to this partnership with
Utah and their new private equity partners.
Speaker 2 (01:18):
Sure. Yeah.
Speaker 4 (01:19):
So from a private equity perspective, you look at a
few different things. In first and foremost is companies that
generate significant revenue, and is that revenue consistent? Is that
revenue that you can come in and add resources, whether
that's great talent of people or investment into certain areas.
(01:40):
Can you grow that revenue? Can you help this business
achieve kind of the next level of growth? And so
sports is one of those really unique industries that has
traditionally stayed away from private equity because one, it was
not allowed professionally in North America until the last five
or six years when the leagues started to see their
(02:01):
teams really grow in value and they started to look
for other sources of capital these families that own these teams,
so their teams explode in value four to five x
in less than ten years. In college sports and in
sports in general, you see a few things from a
private equity lens that are really attractive. One, you see
(02:21):
significant revenue growth. You see media television deals that continue
to grow and have reoccurring revenue, So that's really attractive.
And you also see, unlike many other businesses, sports performs
really well. Whether you're in a recession or things are
going well sports. If you look at the top fifty
(02:44):
watch programs on television, forty nine of them are sports.
If you watch what happened during the tech bubble or
during the financial crisis bubble, sports continued to perform. Teams
continue to appreciate in value, and so any smart investor
is going to look at sports and say, where's the
(03:04):
next wave of value coming. And college sports is very
attractive because you have passionate fans that provide reoccurring revenue
through television, tickets, merchandise, concessions, etc. So if I'm a
private equity investor, I'm looking at college sports and saying
it's an untapped market, and it's a market that I
(03:29):
can predict and that will continue to grow, and that's
really attractive.
Speaker 1 (03:32):
So you were one of the first phone calls I
made when the announcement came down, and one of the
things you said that struck me that I've talked about
pretty much all week is not every not all private
equity capital is created equal, right, Sure so, what we
have here in the marketplace is a lot of very
panicked people that feel like this is not ultimately going
to be a good thing for Utah Athletics, It's not
(03:54):
ultimately going to be a good thing for the consumer experience,
And certainly anticipating price sykes for tickets, merch food and
BEV your tailgate lot, whatever is involved in the consumer
experience is probably going to be more expensive. And again
we need to be clear, none of us really know
a ton of details, So I don't want to put
you in a place to speak to things that we
don't know about. But when you reference, like, hey, no,
(04:18):
it's not all bad money, it's not all bad capital,
Like what about that dynamic could actually benefit everybody who
loves UTA athletics.
Speaker 2 (04:25):
Sure so, there.
Speaker 4 (04:27):
Are a lot of stories out there of bad private
equity investment where they have come in and they have
cut cost, they have fired people, they have changed the
product quality in a negative way. For every bad story,
there are ten great stories where a private equity company
(04:47):
has come in and provided capital or capability to a
company that didn't have that before and helped that company
grow and achieved success that they wouldn't have other wise.
So if I'm a fan of the University of Utah,
I am looking at this from that lens, which is
(05:08):
what capability or what capital is being provided that will
help the athletic department football, basketball, gymnastics achieve a better
outcome than they could have otherwise. Will they bring in
people who will help sell sponsorships, Will they bring in
people who will help drive a better fan experience, which
(05:28):
will of course drive revenue, but will do it in
the right way. So there's right ways to grow revenue,
and then there's the shortcuts. I can't speak to this
firm if they will do one or the latter, but
I do think this is coming to college sports. I mean,
there's no doubt about it. Utah's early and so there's
a little bit of a guinea pig reality here, but
(05:52):
that could work out in their favor in a really
positive way.
Speaker 1 (05:54):
Before we get Trevor's thoughts as an alum who is
still very connected to the program and passionate about what
going on, let me ask you about this dynamic. So Oftentimes,
as you and I spoke about, a private equity firm
wants to buy control of a company, they want fifty
one percent at least, they want the majority of the
seats on the board. This is not that we don't
(06:15):
know what the percentages look like, but we do know
that Outrow will occupy two of the seven board seats.
It will be chaired by Mark Harlan. There are three
other chairs that we be filled by university people. My
guess is Taylor Randalls one of those. I don't know.
I hope it is because the tailor's really bright. And
then the seventh seat that's out there will be filled
by what all characterized as a local businessman who is
(06:39):
invested into this fund.
Speaker 2 (06:41):
You're going to hear the usual names. They're on the building.
Speaker 1 (06:43):
Everybody knows who they are, but we don't know who
will fill that seventh seat. Walk us through this dynamic, though,
because the new private equity partner only will have two seats,
so it has to indicate that the percentages still are
heavily in the favor of the Utah Athletic Department.
Speaker 4 (06:59):
Sure, and when you're a private equity group, if you
have control, you can do whatever you want, you can
make every decision. That is not how this is set up,
as from my understanding, So they're going to have to
do things that are good for the university. The reality
is private equity and college sports have different cultures. Those
cultures are coming to a head and they're clashing together.
(07:23):
But the way this deal is set up from my perspective,
is there are protections for the university, both in terms
of the number of seats on the board, the decision
making that can be done, and the right to buy
out this group in five to seven years. And so
they're going to have to do things that are not
just good for the short term because Taylor or Mark
(07:45):
and others on the board they are not thinking about
what's good just for the next three years. They're thinking
about what will be beneficial to the university for the
next thirty years. And so the protections from the deal
structure are good for the University of Utah.
Speaker 1 (08:01):
Well that's a relief, and folks, should you know, certainly
take that as a good sign.
Speaker 2 (08:07):
All right, travel, Let's bring in the hammer now.
Speaker 1 (08:09):
As the alum, the former player that is very passionate
about trying to make sure Utah football continues to be
competitive in this landscape. Help us understand the reaction from
your side of things in the community to this new
deal that was an ouch yesterday.
Speaker 3 (08:23):
I'm happy it's going to service the debt. Okay, we
owe about forty million. It's going to come out in January.
I think we ran thirty two last year, not a
big deal. When we're talking about the numbers we're talking about,
I think that's a good solution. It's going to free
up capital for us to spend on other things like branding,
facilities and also coaches salaries, all that good stuff. My
concern is, we've talked about it off air. We're still
only at sixteen or seventeen million for this year. So
(08:46):
I know that you have a partner, right, it's a
long term look, But we got a good quarterback coming back,
and we just I think I think we got those
two guys, and I think we got these two freshmen.
Our funds are getting low, and you and I talked
about BYU's numbers. You can speak more to that what
they have an nil on the docket, But just to
give everybody heads up, this money is not going to
be spent on the roster. This is a debt servicer.
(09:06):
This is a partner for the long term the deals.
I'm done yet, we got January second.
Speaker 2 (09:11):
That's the portal. Yep.
Speaker 3 (09:12):
So I actually love the deal. If you guys say
it's a good deal, then I love it, right, I
trust the check.
Speaker 4 (09:17):
Its Yeah, I don't know if it's a good deal
or not because I don't know the details.
Speaker 3 (09:21):
I'm gonna ask you. I think you're going to tell there.
Speaker 4 (09:22):
Are protections for the university in place, which if i'm
you know, Alex or Kyle, that's important to me because
I have a long term investment into the team's performance
and I think it's worth mentioning. I'm a big fan
of both of those guys. You have two great head coaches.
(09:44):
Now you need to bring support to those two coaches,
and that's what you know. Remains to be determined. But
there's not enough details in the seat that I'm sitting
to say this is a great deal of.
Speaker 3 (09:55):
This is a bad I apologize. I just mean in general, right,
you see it as a positive, right, So I'm going
to take your word for it. Thank You've forgotten more
about this stuff than I know.
Speaker 2 (10:03):
Right.
Speaker 3 (10:04):
My thing is is I know what's coming for the
salary cap, right, we have a cap. Everybody, what is it?
Spence twenty and a half, twenty point five million. That's nationwide.
Everybody listened to this nationwide.
Speaker 1 (10:14):
And by the way, that's every student athlete. You decide
how you use and most schools will give the majority
of that to the football.
Speaker 3 (10:20):
So we're going to be around sixteen or seventeen million.
Speaker 1 (10:22):
And that so, just to be clear, sixteen or seventeen
mil is that part of the twenty point five cap?
That's what alick? Okay, do you have any knowledge of
what the nil copper looks like for Utah? Close to zero?
That's bad news. And I can tell you it's an issue.
I've talked about it multiple times throughout the year. I'm
not so concerned about anything who's coaching. I want to
know what the plan is for the roster. We don't
(10:44):
want to be the Oakland A's Sacramento ays, wait, no
Vegas as we want to be probably the Saint Louis Cardinals. Okay,
We're probably not gonna be the Dodgers.
Speaker 3 (10:51):
We're not gonna be Ohio State Oregon, but I think
we could be Saint Louis, right, and they still win.
So that kind of thinking has to come forward. We
need some more money. We need four to six million
dollars just to patch this thing together properly.
Speaker 2 (11:03):
And that is to come right now.
Speaker 3 (11:05):
We need it before I need I needed. We needed
December thirty first. Yeah, the port opens January second, Okay,
January Firsus a holiday. We don't need it in cash.
We need a promisory. No, we're looking for a partner.
Speaker 2 (11:14):
Okay.
Speaker 3 (11:15):
We talked about that seven foard seat. I work with
the Utah Players Association. Okay, collective bargaining. We've already started
with the school. We've met with them multiple times. I've
already been organizing with current players. We'd like to have
a partner to put on that seat. We want to
buy the quarterbacks for this year. It's gonna cost about
five million, okay, And you find a partner two of them. Yes,
and so every year if the player Association, we're putting
(11:36):
down some skin. Right, we want three years in you
played three years for Utah, you're more likely said you
get a healthcare Benefit'd be small to start, but as
we grow this thing to your point with private equity,
it's only going to happen let's get ahead of it, right,
Let's take care of There's a guy right now that
you and I know, he's struggling, right, he needs a
place to go, man, And so we're working on that,
but we need some We need to come together as
(11:57):
a school. And I think that's seventh seat, right, whoever
that is, we will talk about that. You got the
whole players, they're sover two thousands. We'll give you an army, right,
and we'll go help fundraise and we'll put it together.
We'll train the kids on the weekends. But if we're
gonna do something like that, then I'm all in, man,
we need this money right now, okay, by you as
how much spence? How much do you think and they're
gonna have on top of that, on top everybody of
(12:18):
the twenty and a half that they are allocated.
Speaker 1 (12:19):
How much everybody has twenty and a half as far
as what you can pay your players, and then the
nil is separate from that twenty and a half. And
the reports were last year BYU was third to last
in the big twelve in nil. And Colannie said, look,
if you want me to stay and not go to
Penn State, then I need nil guarantees, and the reports
are you got about fifteen million dollars on top of
what they paid last year, so that would be probably
(12:42):
north of twenty million. And that's nil. That's not the
twenty point five that the school can distribute however they want.
Speaker 3 (12:48):
We're at close to zero, so that means we have
sixteen If I do those numbers right, that's somewhere over
forty million dollars or close to it.
Speaker 1 (12:55):
Yeah. I told I wasn't aware that Utah's nil number
is close to zero, That it's.
Speaker 3 (12:58):
Close to zero. Now, remember we've got a big deficit here.
So that's been the first thing. And I was educated
off air on that the bottom line does matter to
important people. Okay, to the fans and coaches. Yeah, I
just know the games are going to be on Saturday. Okay,
what times the game mat? I'll be there. Here's my team.
So we figured that out. Now right now, we need
to put all our efforts everybody in solving this issue.
(13:19):
We are being outspent almost over two to one. The
guys down south are going to treat us like the
Salt Lake Bees, right, they're the angels, you can put
that together. They're going to start they already picked off
ton of Bassa last year. If we don't get up
to that level, right, we're just spent. You know what
happens if you lose two or three years in a row, right,
it gets hard to get out of that hole. Sure,
then you turn into the sixers and you're doing the process.
Speaker 1 (13:39):
Right.
Speaker 2 (13:40):
We don't want to be that.
Speaker 3 (13:41):
We're thirteenth in the country, right, we're right on the door,
so we need to double down. Gosh, dang it, that's
how I'm concerned. I want to ask you when you
hear this right, as a private equator, does that give
you any pause for concern?
Speaker 4 (13:54):
Well, the reality is that college athletics are not built
to be profitable businesses. They're not run traditionally by people
who are looking at all the metrics you would look
at in a traditional business sense. Ohio State, who you mentioned,
highest revenue generating athletic department last year, they lost forty
(14:16):
plus million dollars and that does not include probably what
they spent on nil.
Speaker 2 (14:21):
Right, And so.
Speaker 4 (14:24):
You're going to see a level of professionalism come into
college athletics that could could be great. I think the
jury is still very much out on that, but I
will say, if I am a investor into a business,
I am incentivized to make sure that that business is
performing at the best possible you know, in the best
(14:48):
possible way. So I am invested both from a dollars
but also from a time perspective to make sure that
things like nil, you know, are funded. Even if I
can by all the rules and regulations, I can, as
a private equity firm invest into NIL. I can use
my resources to find those dollars. And so it's going
(15:12):
to be a really interesting few years in college athletics
to see how institutional capital influences what is traditionally a
culture that is not set up to look at the
bottom line.
Speaker 1 (15:24):
And to your point, look, college athletics does not have
a revenue generating problem.
Speaker 2 (15:29):
It has a spending problem.
Speaker 1 (15:31):
Because the numbers for Utah Athletics last year they made
one hundred and nine million dollars.
Speaker 2 (15:36):
That was a revenue.
Speaker 1 (15:38):
Any business that makes one hundred nine million dollars every
year should not be forty million dollars in debt. Their
expenses were one hundred and twenty five million. The debt
last year, according to Utah's numbers, was close to seventeen million,
but here's the truth. The non revenue generating sports cost
about seventeen million dollars, So anything besides football and basketball.
(15:58):
And by the way, I was overnight because they listened
to the show yesterday. Gymnastics team does not make money.
It's not a revenue generator. It's pretty close to breaking even,
but it's not making money. This is mainly football and
then basketball because of March madness. And when it comes
to private equity, is there a danger They look at
soccer as a line item and says not making revenue.
(16:19):
But I mean, those are the types of decisions that
we're gonna have to look out for.
Speaker 4 (16:23):
Right well, And I think from what I understand of
this deal, and again I don't know all the details,
Utah protected against that from happening by saying this is
a deal just for gymnastics, football, and basketball, so this
private equity group will have no say and what happens
to the other sports. And when I talk about the
culture clash, that's exactly what I'm referencing. College athletics has
(16:46):
traditionally been set up to give kids an opportunity that
they wouldn't have otherwise. It has not been a business
of sorts even though it has generated a tremendous amount
of dollars. So that's what will be really interesting to
see as other deals happen. Do they happen across all sports,
do they happen in individual sports? Do they happen at
(17:09):
the conference level? Do they happen at the university level.
This is a little bit of the wild wild West,
and being early on allows you to maybe dictate more
than others will have the opportunity down the road.
Speaker 1 (17:21):
Before I say you loose, because I know you got
to catch a flat. I've got like seven things I
wanted to ask you if we've got to get you
out of here. You know, the Big Ten for about
fifteen years has gone about their business maniacally in a way,
almost ruining college athletics. They ruined the Big East, which
was a great basketball conference. They grabbed Maryland because they
wanted the Northeast footprint. They get Nebraska from the Big
(17:42):
Twelve because they wanted a conference championship game to generate
more revenue. They go to LA and they poach UCLA
and USC and their flat broke like they're trying to
consummate private equity deals even and look their TV distribution
is healthy, but you reference it's the inevitability of this coming.
The leadership in college athletics has been so asleep at
(18:05):
the wheel ed Obannon filed his lawsuit in two thousand
and eight.
Speaker 2 (18:08):
You've had seventeen years to prepare for this.
Speaker 1 (18:11):
At what point is this sport, meaning college football, just
drug by its heels into the professional model where it's like, look,
sorry if you don't like it, but we're here. The
players unionize, there's a leadership which as a commissioner, there's
a governing body you collectively bargain, and basically.
Speaker 2 (18:30):
It's the NFL. Are we moving in that direction? That's
sure what it feels like.
Speaker 4 (18:34):
Yeah, But I will say I mean that you look
at the NBA in the eighties and nineties, there were
maybe two or three teams that were actually making money.
Most teams were losing money. So I think you're seeing
college athletics follow what happened in the professional league realm,
where great revenue generation, but you're having to spend almost
(18:56):
everything you make, if not more, to remain competitive. But
the MBA slowly, through great leadership, through great decision making,
became a place where every market could make money, whether
you were Oklahoma City or whether you were the New
York next and so there will be the haves and
the have nots in college athletics, and you will have
(19:17):
to see some type of regulation because it is way
too much of a wild wild West, and institutional capital
will not stand for that. They will force the issue
for some of these things to become more professional in
terms of collective bargaining in terms of regulation and rules.
And by being early on, Utah is going to be
part of that conversation.
For YouTube viewers, you should tune in to see Trevor Riley.
Speaker 2 (00:03):
Oh, he took the hat off, but.
Speaker 1 (00:04):
He does have the sunglasses on. Let's make sure all
the microphones are on. Trevor Riley, how are you, buddy?
Speaker 3 (00:10):
Doing great?
Speaker 2 (00:11):
Great to see you.
Speaker 1 (00:12):
And the best looking man in the bunch is actually
dressed very nicely in a jacket and a shirt.
Speaker 2 (00:18):
He is my younger brother. He is much smarter than
I am.
Speaker 1 (00:21):
I like to brag that I'm the least intelligent checked
child or sibling.
Speaker 2 (00:26):
Andrew Jackets, how are you, buddy, Hey Spencer, good to
be here. Hey, it's great to see you.
Speaker 1 (00:30):
So Andrew is with the SINO short check it's fund
And how long have you made your way in the.
Speaker 2 (00:34):
World of private equity?
Speaker 4 (00:36):
For the last ten years as a consultant in five
directly in private equity through being Capital and KKR.
Speaker 1 (00:42):
And you can allow me to brag for you a
Wharton Business school lum. So very very intelligent and very
aware of this world that now we all find ourselves in.
So on this show, as Trevor knows, I've talked about
the inevitability of private equity permeating through college athletics, for
maybe five years when nil became a reality, the transferport
(01:05):
became a reality.
Speaker 2 (01:06):
You help us understand why this would be.
Speaker 1 (01:10):
Something that private equity would look at as something that
could benefit them when it comes to this partnership with
Utah and their new private equity partners.
Speaker 2 (01:18):
Sure. Yeah.
Speaker 4 (01:19):
So from a private equity perspective, you look at a
few different things. In first and foremost is companies that
generate significant revenue, and is that revenue consistent? Is that
revenue that you can come in and add resources, whether
that's great talent of people or investment into certain areas.
(01:40):
Can you grow that revenue? Can you help this business
achieve kind of the next level of growth? And so
sports is one of those really unique industries that has
traditionally stayed away from private equity because one, it was
not allowed professionally in North America until the last five
or six years when the leagues started to see their
(02:01):
teams really grow in value and they started to look
for other sources of capital these families that own these teams,
so their teams explode in value four to five x
in less than ten years. In college sports and in
sports in general, you see a few things from a
private equity lens that are really attractive. One, you see
(02:21):
significant revenue growth. You see media television deals that continue
to grow and have reoccurring revenue, So that's really attractive.
And you also see, unlike many other businesses, sports performs
really well. Whether you're in a recession or things are
going well sports. If you look at the top fifty
(02:44):
watch programs on television, forty nine of them are sports.
If you watch what happened during the tech bubble or
during the financial crisis bubble, sports continued to perform. Teams
continue to appreciate in value, and so any smart investor
is going to look at sports and say, where's the
(03:04):
next wave of value coming. And college sports is very
attractive because you have passionate fans that provide reoccurring revenue
through television, tickets, merchandise, concessions, etc. So if I'm a
private equity investor, I'm looking at college sports and saying
it's an untapped market, and it's a market that I
(03:29):
can predict and that will continue to grow, and that's
really attractive.
Speaker 1 (03:32):
So you were one of the first phone calls I
made when the announcement came down, and one of the
things you said that struck me that I've talked about
pretty much all week is not every not all private
equity capital is created equal, right, Sure so, what we
have here in the marketplace is a lot of very
panicked people that feel like this is not ultimately going
to be a good thing for Utah Athletics, It's not
(03:54):
ultimately going to be a good thing for the consumer experience,
And certainly anticipating price sykes for tickets, merch food and
BEV your tailgate lot, whatever is involved in the consumer
experience is probably going to be more expensive. And again
we need to be clear, none of us really know
a ton of details, So I don't want to put
you in a place to speak to things that we
don't know about. But when you reference, like, hey, no,
(04:18):
it's not all bad money, it's not all bad capital,
Like what about that dynamic could actually benefit everybody who
loves UTA athletics.
Speaker 2 (04:25):
Sure so, there.
Speaker 4 (04:27):
Are a lot of stories out there of bad private
equity investment where they have come in and they have
cut cost, they have fired people, they have changed the
product quality in a negative way. For every bad story,
there are ten great stories where a private equity company
(04:47):
has come in and provided capital or capability to a
company that didn't have that before and helped that company
grow and achieved success that they wouldn't have other wise.
So if I'm a fan of the University of Utah,
I am looking at this from that lens, which is
(05:08):
what capability or what capital is being provided that will
help the athletic department football, basketball, gymnastics achieve a better
outcome than they could have otherwise. Will they bring in
people who will help sell sponsorships, Will they bring in
people who will help drive a better fan experience, which
(05:28):
will of course drive revenue, but will do it in
the right way. So there's right ways to grow revenue,
and then there's the shortcuts. I can't speak to this
firm if they will do one or the latter, but
I do think this is coming to college sports. I mean,
there's no doubt about it. Utah's early and so there's
a little bit of a guinea pig reality here, but
(05:52):
that could work out in their favor in a really
positive way.
Speaker 1 (05:54):
Before we get Trevor's thoughts as an alum who is
still very connected to the program and passionate about what
going on, let me ask you about this dynamic. So Oftentimes,
as you and I spoke about, a private equity firm
wants to buy control of a company, they want fifty
one percent at least, they want the majority of the
seats on the board. This is not that we don't
(06:15):
know what the percentages look like, but we do know
that Outrow will occupy two of the seven board seats.
It will be chaired by Mark Harlan. There are three
other chairs that we be filled by university people. My
guess is Taylor Randalls one of those. I don't know.
I hope it is because the tailor's really bright. And
then the seventh seat that's out there will be filled
by what all characterized as a local businessman who is
(06:39):
invested into this fund.
Speaker 2 (06:41):
You're going to hear the usual names. They're on the building.
Speaker 1 (06:43):
Everybody knows who they are, but we don't know who
will fill that seventh seat. Walk us through this dynamic, though,
because the new private equity partner only will have two seats,
so it has to indicate that the percentages still are
heavily in the favor of the Utah Athletic Department.
Speaker 4 (06:59):
Sure, and when you're a private equity group, if you
have control, you can do whatever you want, you can
make every decision. That is not how this is set up,
as from my understanding, So they're going to have to
do things that are good for the university. The reality
is private equity and college sports have different cultures. Those
cultures are coming to a head and they're clashing together.
(07:23):
But the way this deal is set up from my perspective,
is there are protections for the university, both in terms
of the number of seats on the board, the decision
making that can be done, and the right to buy
out this group in five to seven years. And so
they're going to have to do things that are not
just good for the short term because Taylor or Mark
(07:45):
and others on the board they are not thinking about
what's good just for the next three years. They're thinking
about what will be beneficial to the university for the
next thirty years. And so the protections from the deal
structure are good for the University of Utah.
Speaker 1 (08:01):
Well that's a relief, and folks, should you know, certainly
take that as a good sign.
Speaker 2 (08:07):
All right, travel, Let's bring in the hammer now.
Speaker 1 (08:09):
As the alum, the former player that is very passionate
about trying to make sure Utah football continues to be
competitive in this landscape. Help us understand the reaction from
your side of things in the community to this new
deal that was an ouch yesterday.
Speaker 3 (08:23):
I'm happy it's going to service the debt. Okay, we
owe about forty million. It's going to come out in January.
I think we ran thirty two last year, not a
big deal. When we're talking about the numbers we're talking about,
I think that's a good solution. It's going to free
up capital for us to spend on other things like branding,
facilities and also coaches salaries, all that good stuff. My
concern is, we've talked about it off air. We're still
only at sixteen or seventeen million for this year. So
(08:46):
I know that you have a partner, right, it's a
long term look, But we got a good quarterback coming back,
and we just I think I think we got those
two guys, and I think we got these two freshmen.
Our funds are getting low, and you and I talked
about BYU's numbers. You can speak more to that what
they have an nil on the docket, But just to
give everybody heads up, this money is not going to
be spent on the roster. This is a debt servicer.
(09:06):
This is a partner for the long term the deals.
I'm done yet, we got January second.
Speaker 2 (09:11):
That's the portal. Yep.
Speaker 3 (09:12):
So I actually love the deal. If you guys say
it's a good deal, then I love it, right, I
trust the check.
Speaker 4 (09:17):
Its Yeah, I don't know if it's a good deal
or not because I don't know the details.
Speaker 3 (09:21):
I'm gonna ask you. I think you're going to tell there.
Speaker 4 (09:22):
Are protections for the university in place, which if i'm
you know, Alex or Kyle, that's important to me because
I have a long term investment into the team's performance
and I think it's worth mentioning. I'm a big fan
of both of those guys. You have two great head coaches.
(09:44):
Now you need to bring support to those two coaches,
and that's what you know. Remains to be determined. But
there's not enough details in the seat that I'm sitting
to say this is a great deal of.
Speaker 3 (09:55):
This is a bad I apologize. I just mean in general, right,
you see it as a positive, right, So I'm going
to take your word for it. Thank You've forgotten more
about this stuff than I know.
Speaker 2 (10:03):
Right.
Speaker 3 (10:04):
My thing is is I know what's coming for the
salary cap, right, we have a cap. Everybody, what is it?
Spence twenty and a half, twenty point five million. That's nationwide.
Everybody listened to this nationwide.
Speaker 1 (10:14):
And by the way, that's every student athlete. You decide
how you use and most schools will give the majority
of that to the football.
Speaker 3 (10:20):
So we're going to be around sixteen or seventeen million.
Speaker 1 (10:22):
And that so, just to be clear, sixteen or seventeen
mil is that part of the twenty point five cap?
That's what alick? Okay, do you have any knowledge of
what the nil copper looks like for Utah? Close to zero?
That's bad news. And I can tell you it's an issue.
I've talked about it multiple times throughout the year. I'm
not so concerned about anything who's coaching. I want to
know what the plan is for the roster. We don't
(10:44):
want to be the Oakland A's Sacramento ays, wait, no
Vegas as we want to be probably the Saint Louis Cardinals. Okay,
We're probably not gonna be the Dodgers.
Speaker 3 (10:51):
We're not gonna be Ohio State Oregon, but I think
we could be Saint Louis, right, and they still win.
So that kind of thinking has to come forward. We
need some more money. We need four to six million
dollars just to patch this thing together properly.
Speaker 2 (11:03):
And that is to come right now.
Speaker 3 (11:05):
We need it before I need I needed. We needed
December thirty first. Yeah, the port opens January second, Okay,
January Firsus a holiday. We don't need it in cash.
We need a promisory. No, we're looking for a partner.
Speaker 2 (11:14):
Okay.
Speaker 3 (11:15):
We talked about that seven foard seat. I work with
the Utah Players Association. Okay, collective bargaining. We've already started
with the school. We've met with them multiple times. I've
already been organizing with current players. We'd like to have
a partner to put on that seat. We want to
buy the quarterbacks for this year. It's gonna cost about
five million, okay, And you find a partner two of them. Yes,
and so every year if the player Association, we're putting
(11:36):
down some skin. Right, we want three years in you
played three years for Utah, you're more likely said you
get a healthcare Benefit'd be small to start, but as
we grow this thing to your point with private equity,
it's only going to happen let's get ahead of it, right,
Let's take care of There's a guy right now that
you and I know, he's struggling, right, he needs a
place to go, man, And so we're working on that,
but we need some We need to come together as
(11:57):
a school. And I think that's seventh seat, right, whoever
that is, we will talk about that. You got the
whole players, they're sover two thousands. We'll give you an army, right,
and we'll go help fundraise and we'll put it together.
We'll train the kids on the weekends. But if we're
gonna do something like that, then I'm all in, man,
we need this money right now, okay, by you as
how much spence? How much do you think and they're
gonna have on top of that, on top everybody of
(12:18):
the twenty and a half that they are allocated.
Speaker 1 (12:19):
How much everybody has twenty and a half as far
as what you can pay your players, and then the
nil is separate from that twenty and a half. And
the reports were last year BYU was third to last
in the big twelve in nil. And Colannie said, look,
if you want me to stay and not go to
Penn State, then I need nil guarantees, and the reports
are you got about fifteen million dollars on top of
what they paid last year, so that would be probably
(12:42):
north of twenty million. And that's nil. That's not the
twenty point five that the school can distribute however they want.
Speaker 3 (12:48):
We're at close to zero, so that means we have
sixteen If I do those numbers right, that's somewhere over
forty million dollars or close to it.
Speaker 1 (12:55):
Yeah. I told I wasn't aware that Utah's nil number
is close to zero, That it's.
Speaker 3 (12:58):
Close to zero. Now, remember we've got a big deficit here.
So that's been the first thing. And I was educated
off air on that the bottom line does matter to
important people. Okay, to the fans and coaches. Yeah, I
just know the games are going to be on Saturday. Okay,
what times the game mat? I'll be there. Here's my team.
So we figured that out. Now right now, we need
to put all our efforts everybody in solving this issue.
(13:19):
We are being outspent almost over two to one. The
guys down south are going to treat us like the
Salt Lake Bees, right, they're the angels, you can put
that together. They're going to start they already picked off
ton of Bassa last year. If we don't get up
to that level, right, we're just spent. You know what
happens if you lose two or three years in a row, right,
it gets hard to get out of that hole. Sure,
then you turn into the sixers and you're doing the process.
Speaker 1 (13:39):
Right.
Speaker 2 (13:40):
We don't want to be that.
Speaker 3 (13:41):
We're thirteenth in the country, right, we're right on the door,
so we need to double down. Gosh, dang it, that's
how I'm concerned. I want to ask you when you
hear this right, as a private equator, does that give
you any pause for concern?
Speaker 4 (13:54):
Well, the reality is that college athletics are not built
to be profitable businesses. They're not run traditionally by people
who are looking at all the metrics you would look
at in a traditional business sense. Ohio State, who you mentioned,
highest revenue generating athletic department last year, they lost forty
(14:16):
plus million dollars and that does not include probably what
they spent on nil.
Speaker 2 (14:21):
Right, And so.
Speaker 4 (14:24):
You're going to see a level of professionalism come into
college athletics that could could be great. I think the
jury is still very much out on that, but I
will say, if I am a investor into a business,
I am incentivized to make sure that that business is
performing at the best possible you know, in the best
(14:48):
possible way. So I am invested both from a dollars
but also from a time perspective to make sure that
things like nil, you know, are funded. Even if I
can by all the rules and regulations, I can, as
a private equity firm invest into NIL. I can use
my resources to find those dollars. And so it's going
(15:12):
to be a really interesting few years in college athletics
to see how institutional capital influences what is traditionally a
culture that is not set up to look at the
bottom line.
Speaker 1 (15:24):
And to your point, look, college athletics does not have
a revenue generating problem.
Speaker 2 (15:29):
It has a spending problem.
Speaker 1 (15:31):
Because the numbers for Utah Athletics last year they made
one hundred and nine million dollars.
Speaker 2 (15:36):
That was a revenue.
Speaker 1 (15:38):
Any business that makes one hundred nine million dollars every
year should not be forty million dollars in debt. Their
expenses were one hundred and twenty five million. The debt
last year, according to Utah's numbers, was close to seventeen million,
but here's the truth. The non revenue generating sports cost
about seventeen million dollars, So anything besides football and basketball.
(15:58):
And by the way, I was overnight because they listened
to the show yesterday. Gymnastics team does not make money.
It's not a revenue generator. It's pretty close to breaking even,
but it's not making money. This is mainly football and
then basketball because of March madness. And when it comes
to private equity, is there a danger They look at
soccer as a line item and says not making revenue.
(16:19):
But I mean, those are the types of decisions that
we're gonna have to look out for.
Speaker 4 (16:23):
Right well, And I think from what I understand of
this deal, and again I don't know all the details,
Utah protected against that from happening by saying this is
a deal just for gymnastics, football, and basketball, so this
private equity group will have no say and what happens
to the other sports. And when I talk about the
culture clash, that's exactly what I'm referencing. College athletics has
(16:46):
traditionally been set up to give kids an opportunity that
they wouldn't have otherwise. It has not been a business
of sorts even though it has generated a tremendous amount
of dollars. So that's what will be really interesting to
see as other deals happen. Do they happen across all sports,
do they happen in individual sports? Do they happen at
(17:09):
the conference level? Do they happen at the university level.
This is a little bit of the wild wild West,
and being early on allows you to maybe dictate more
than others will have the opportunity down the road.
Speaker 1 (17:21):
Before I say you loose, because I know you got
to catch a flat. I've got like seven things I
wanted to ask you if we've got to get you
out of here. You know, the Big Ten for about
fifteen years has gone about their business maniacally in a way,
almost ruining college athletics. They ruined the Big East, which
was a great basketball conference. They grabbed Maryland because they
wanted the Northeast footprint. They get Nebraska from the Big
(17:42):
Twelve because they wanted a conference championship game to generate
more revenue. They go to LA and they poach UCLA
and USC and their flat broke like they're trying to
consummate private equity deals even and look their TV distribution
is healthy, but you reference it's the inevitability of this coming.
The leadership in college athletics has been so asleep at
(18:05):
the wheel ed Obannon filed his lawsuit in two thousand
and eight.
Speaker 2 (18:08):
You've had seventeen years to prepare for this.
Speaker 1 (18:11):
At what point is this sport, meaning college football, just
drug by its heels into the professional model where it's like, look,
sorry if you don't like it, but we're here. The
players unionize, there's a leadership which as a commissioner, there's
a governing body you collectively bargain, and basically.
Speaker 2 (18:30):
It's the NFL. Are we moving in that direction? That's
sure what it feels like.
Speaker 4 (18:34):
Yeah, But I will say I mean that you look
at the NBA in the eighties and nineties, there were
maybe two or three teams that were actually making money.
Most teams were losing money. So I think you're seeing
college athletics follow what happened in the professional league realm,
where great revenue generation, but you're having to spend almost
(18:56):
everything you make, if not more, to remain competitive. But
the MBA slowly, through great leadership, through great decision making,
became a place where every market could make money, whether
you were Oklahoma City or whether you were the New
York next and so there will be the haves and
the have nots in college athletics, and you will have
(19:17):
to see some type of regulation because it is way
too much of a wild wild West, and institutional capital
will not stand for that. They will force the issue
for some of these things to become more professional in
terms of collective bargaining in terms of regulation and rules.
And by being early on, Utah is going to be
part of that conversation.
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