WED POD @SpenceChecketts on Utes Big Private Equity Leap, State of CFB + more

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.

Episode Transcript

Speaker 1 (00:00):
How many of you thought it was going to be
my voice as we started the show today.

Speaker 2 (00:04):
Seems to be confusion in the marketplace.

Speaker 1 (00:07):
I don't know the Leonardo DiCaprio, Wolf of Wall Street,
whatever you got to drag me out here. I'm not
even sure how that saying goes. I'm not going anywhere.
This radio show remains.

Speaker 2 (00:17):
A little bit of.

Speaker 1 (00:17):
An announcement last night that seems to have caused some
confusion with some folks. I am going to take a
job with our friends over at KUTV, an expanded role
on talking sports, and then some other things we'll be
doing with our friends right across the street. But this
show remains, so I'm sure a lot of you might
be bummed out hoping to crack the mic in here.
I don't know somebody different. But for those of you

(00:39):
that were curious, I'm not going anywhere. The show remains,
and it's going to be a fun partnership with our
friends across the street, the CBS affiliate, the Saint Clair property, KUTV,
our friends Dave Fox out of Mikhelic and all the
good people over there. So the announcement was made last night,
and thank you for all of the messages that everybody
sent and all the inquiries about whether or not this

(01:02):
show over on ESPN seven hundre would continue, and it
will in perpetuity. I'll be doing this until I'm ninety.
Well hopefully don't do it unil I'm ninety, but you know,
as long as they'll keep me here, we'll stay here. Hello,
how are you happy? Wednesday? Sixty degrees outside, it's sunny.
Is it December or is it August? Nonetheless, as it
is every day, it's going to have you with us.

(01:23):
My name is Spence Check, it's I continue to host
this show. That guy is Porter Larson. He'll continue to
produce in book and we've got a fun show for
you guys today. Of course, the main topic that everybody
continues to talk about is the private equity deal that
the University of Utah consummated yesterday. Over the past twenty
four hours, some new details have emerged and some additional

(01:47):
information that will bring to you guys today on the
station and on the show to kind of let you
know how this is going to look and essentially what
is next. And I think the biggest question is we'll
do money arrive quickly and it will will it arrive
in time for Utah to either retain talented players on

(02:08):
the football team right now or add to the roster, which,
if we're honest, probably could use some talent infusion prior
to the startup next season. A lot of rumors about
what BYU has at their disposal immediately as a result
of Kalade Satake's new deal, and a lot of rumors
about PYU potentially grabbing some talented utes to bring them

(02:29):
down South.

Speaker 2 (02:31):
That's not illegal, it's the name of the game.

Speaker 1 (02:32):
And if you're mad at tampering, well you should be
mad at every team across the landscape of college football.
And of course, as a youth fan, your question is
probably pretty simple, which is what does this mean for
the team that I love to watch? What does this
mean for my consumer experience? How does this change my
life as a Utah fan? Well, some answers I think
we can bring you today, and some answer answers simply

(02:55):
will not come until time on folds. So that was
the massive story that broke yesterday via Ross Dellinger of
Yahoo Sports. Our friends at the Athletic have since latched on,
and Dan Wetsoe at ESPN has written a piece. There
are a lot of questions that remain to be answered.
The University of Utah is a public institution, and ultimately

(03:17):
what does that mean for things like tax exem status
if you're gonna run your athletic department like a business
at a for profit one at that with the new
side business, the Utah Brands and Entertainment LLC. So we'll
get into it on the show today and we'll kind
of update you on some of the information we've been
able to get. That's not the only piece of information

(03:37):
going on. I've and Mazell, friend of the show, joined us.
I don't know three weeks ago, has written a new
book about Frank Lahey, who was a legendary Notre Dame coach,
albeit not as well known as New Rocky. But he
had a book signing on campus scheduled for this week.

Speaker 2 (03:56):
Notre Dame canceled.

Speaker 1 (03:57):
It because he's on the college football playoff committee. I mean, look,
I understand if you're Notre Dame why you feel like
you got jobbed a little bit. But they are acting
like a bunch of babies, saying no to the bowl
game against BYU and Orlando and now continuing to just
cry beat Miami or Texas A and M and you're
in kids.

Speaker 2 (04:17):
I mean, that's just kind of the name of the game.

Speaker 1 (04:18):
I heard the ad said they're on the most They
were on the most historic ten game winning streak in
the history of college football. This year, Indiana, Ohio State,
and Texas Tech had more impressive ten game win streaks
than Notre Dame. So get to the latest information in
the world of college football. Of course, we know where
Utah is going bowling. We know where Byu is going bowling.

(04:40):
Some interesting intrigue in the world of the NFL. Philip
Rivers might start for the Colts coming up on Sunday.
Daniel Jones after the season with an achilles injury. Riley
Leonard is nursing a knee injury in Philip Rivers, who
has not played pro football and I think four or
five years at the age of forty four, might step
in and dart for the Colts on Sunday.

Speaker 2 (05:02):
So kind of a wild story in that direction.

Speaker 1 (05:05):
Another night after the Jazz tonight, they're gonna take on
the Memphis Grizzlies coming up tomorrow. The Utah Mammoth are
back in action. Tonight they will take on Florida. Utah
basketball will be on your radio station tonight.

Speaker 2 (05:18):
Utah is taking on Boise State.

Speaker 1 (05:20):
B are you with a big time comeback last night
to beat Clemson at Madison Square Garden.

Speaker 2 (05:26):
So we'll bout surround a little bit.

Speaker 1 (05:27):
We'll do a little NBA, we'll do some college football,
we'll do some NFL. And right before we went on air,
Rayel saw Lake has made a transaction. Brian Vera is
on his way to Montreal in exchange for one point
five million dollars in I don't know.

Speaker 2 (05:42):
It's gam, it's stam.

Speaker 1 (05:45):
It's some stupid mechanism to ad talent because the league
is just ridiculous.

Speaker 2 (05:51):
It could be gam, it could be TAM. I don't know.
It's a dumb league.

Speaker 1 (05:55):
So Brian Vera, who's played really well for RSL, is
now on his way to Montreal and RSL gets one
point five million dollars in whatever the hell the mechanism
is so little. RSL news course sinching closer and closer
to the World Cup. Good guest list on this Wednesday afternoon,
Happy Wednesday to you. You're halfway through that work week,
You're one day closer to the weekend.

Speaker 2 (06:14):
You're one day closer to Pro football.

Speaker 1 (06:16):
Your Thursday night Pro Football tilt could be a bit
of a snoozer. The Falcons and the Bucks down in Tampa.
The Bucks still have some things to play for. The
Falcons are pretty much cooked. So that's your first NFL
game of the weekend, comes your way tomorrow.

Speaker 2 (06:33):
I do believe we're the home of.

Speaker 1 (06:34):
Thursday night football in the market, so maybe I should
pretend that game is going to be awesome. Of course,
the game is on Amazon Prime, so a lot to
do Wednesday afternoon style. Richard Smith joins us live in studio.
I will bounce around a little bit with Smitty. I
want to get his thoughts on this new situation when
it comes to the way Utah Athletics is now going

(06:55):
to fund its program, and get Smitty's thoughts on kind
of the the new landscape here, because there are a
lot of I would say, pieces of misinformation out there.

Speaker 2 (07:05):
There's a lot of panic, and there.

Speaker 1 (07:08):
Are some things that I think will probably try to
put to rest today while acknowledging what could potentially be
the downfall of the deal, like this the first of
it's kind that will be followed by several programs in
the world of college football, which is why I told Porter,
let's get the professor on this week, and we have.

Speaker 2 (07:24):
Him, Matt Brown, Editor of Extra Points.

Speaker 1 (07:28):
We'll do a good job of walking us through exactly
the mechanisms how this works, what he sees as he
reads the tea leaves a little bit, and then how
inevitable is this as it pertains to the rest of
the world of college football. So good day to have
Matt Brown on the show. And then we have a
private equity bro. We have a private equity bro on

(07:49):
our show today, a private equity bro.

Speaker 2 (07:52):
He happends to be also my brother. His name is
Andrew Checkets, and.

Speaker 1 (07:56):
He has existed in the world of private equity for
probably close to twenty years. He's now joined Sino Shore,
which is the private equity partnership with the Eckles family.

Speaker 2 (08:07):
And I'm gonna have Andrew kind of just walk.

Speaker 1 (08:09):
Us through how this stuff works, because it's his world
and it's not mine, and then talk about some of
the exciting things that he is doing in conjunction with
the Eccles family. Great family here locally, great supporters of
the University of Utah, because you know their names on
the Stadium and then Jake Murphy. Jake has a lot
of very interesting thoughts that he shared via social media

(08:30):
today and yesterday after the announcement. So we'll get with
Jake today. I'm excited to have him on the program.
Maybe maybe he will give us an update on whether
or not we think his dad's gonna finally make the
Hall of Fame.

Speaker 2 (08:45):
So there you go, We've got Jake Murphy on the show.

Speaker 1 (08:48):
So Richard Smith, Matt Brown, Andrew Checketts, Jake Murphy, Me
Spence Jackets, Hello, how are you hosting the show?

Speaker 2 (08:54):
And that guy port Larson.

Speaker 1 (08:56):
Are you bummed out that I showed up for work
today because you probably were wondering whether or not I
was leaving as well.

Speaker 3 (09:00):
No, I was stoked, okay, than I had some people
wondering asking. So it's good to see you. It's good
to see that you haven't transferred over to the dark side?

Speaker 2 (09:10):
Is TV the dark side?

Speaker 4 (09:11):
Yes?

Speaker 1 (09:12):
What if I told you it's good that we now
have a TV partner? It is okay, it is still
the dark side though.

Speaker 5 (09:18):
A little bit, a little bit.

Speaker 3 (09:19):
So you you know, you can you can get you
you can get your thoughts out on radio Dave's Dave's
gonna take all that space for you for you over there,
So all jokes aside. It's it's cool to have that partnership.
We've always had that partnership, at least with Dave.

Speaker 2 (09:36):
You'll just be on on the screen a little bit
more often.

Speaker 1 (09:39):
Well, while TV might be the dark side, to have
a job where you can go do like twelve minutes
of content and then go home. There you go instead
of sitting in a studio for four hours every afternoon,
isn't necessarily.

Speaker 2 (09:51):
A bad thing. That's fair. That's fair.

Speaker 1 (09:53):
Any new thoughts from you on this private equity deal?
Since you and I last foe, we've had a day
to kind of let it marinate.

Speaker 3 (09:59):
Yeah, listen, I've I've at least looked more into how
they are organizing the board, how the control is at
least being sold right, the fact that the University of
Utah and their athletic department, specifically the sports angled folks

(10:20):
still have kind of complete control of roster, of of contracts,
all of the above. That's a big part of this
to me because I, you know, I kind of saw
the the private equity coming in and bulldozing a lot
of that. So if that is to be believed, if
that is true, and if these guys are all you know,

(10:41):
not gonna blur those lines, you know, I don't understand
how you can be against an influx of money. If
all of those things are you know, gonna come to fruition,
all of the concerns still remain. Those are things that
will remain until we see the results of this. That's

(11:01):
that's just investing, right, So we'll see the return, We'll
see what happens. I do think that ultimately you have
to play good football for this to this to really work,
and that's an interesting dynamic here.

Speaker 1 (11:16):
Yeah, you have to get results, you have to continue
the upward trajectory.

Speaker 2 (11:20):
I thought Ck was good yesterday.

Speaker 1 (11:22):
Outlining you know, if you're Alex Jensen, year one is
Utah's coach, and I do believe Alex deserves a lot
of space building this thing up because it's going to
take time.

Speaker 2 (11:32):
It was from the ground up.

Speaker 1 (11:34):
If you're Morgan Scalley, if you are going to take over,
if Wit steps aside, which we still haven't heard, what
sort of added pressure does that bring to you? What
does this mean for the non revenue generating sports? Is
another fascinating angle here, but we'll get into it. Richard
Smith live In's studio as our first guest on a Wednesday,
but before we catch up with Smitty courtesy of our
good friends. You're good friends too at Prize Picks. It

(11:55):
is time now for your opening tip.

Speaker 6 (11:57):
Welcome to the Drive with Spence Check its on Utah's
number one sports talk Now into the studios of ESPN
seven hundred to set the scene for the show. The
opening tip of the Drive is brought to you by
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Speaker 1 (12:14):
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Speaker 2 (13:35):
It is good to be right, all right.

Speaker 1 (13:38):
Massive announcement came down yesterday a couple of hours before
we went on air that the University of Utah has
struck a first of its kind partnership with a private
equity firm based in New York called Otro Capital. Okay,
so we unpacked a lot of this yesterday. We talked
to Chris Comroannie about this. Andy Larson from the Salt

(13:59):
Lake tribut and joined us live in studio. I would
send you to the trib website sltrib dot com to
check out one Andy Roate fake news trib liberal woke liars.

Speaker 2 (14:09):
Check out one hand, he wrote.

Speaker 1 (14:11):
He did a good job of kind of uncovering a
lot of the details and how this is going to
go down. So some new pieces of information we're and look,
a lot of this stuff is public information unless we're
talking about a private institution. The financials for most colleges
and athletic departments are literally online. So what we know

(14:31):
is in college football, they do not have a revenue problem.

Speaker 2 (14:35):
They have a spending problem. Right, And if you want.

Speaker 1 (14:39):
An example of this, you look no further than the
Big Ten, who essentially for the last fifteen years has
tried to maniacally and you know, step by step destroy
the landscape of college athletics. They did it to the
Big East first, which was a great basketball conference still
is a decent basketball conference, not what it once was
a fine football conference. But you know, they poach some

(15:03):
big eie schools. They grabbed Nebraska from the Big Twelve.
That left the Big Twelve reeling because they wanted what
a championship game? Why did they want a championship game?
Because they were looking for ways to generate more revenue,
even though the revenue is not the issue.

Speaker 2 (15:17):
The spending is the issue. And then what else did
they do?

Speaker 1 (15:20):
They go out west and they poached the LA schools
and they essentially blow up the PAC twelve in the
name of getting more TV markets. They grabbed Maryland because
they wanted the northeast footprint basic cable. They grabbed the
LA schools because of course, and because of the failure
of George KLAOFKOF to read the tea leaves and get
to market for a TV deal, the PAC twelve essentially

(15:41):
evaporates right before our eyes, leaving Utah and Arizona and
Arizona State scrambling. I didn't include Colorado because they jumped
ship first, and ultimately they turned out to be right.
I don't know what it would have looked like if
they didn't do that, but that's nothing we need to
relitigate here. But the reason I'm u a the Big
Ten as an example, even though they've essentially destroyed the

(16:04):
old Big East, essentially destroyed the Pac twelve, and added
Nebraska from the Big Twelve to get their championship game,
and now they have la the second biggest TV market
a Northeast footprint. Guess what, They are also out of money,
which is why they tried to consummate a private equity deal.
Even the mighty Big Ten, with their TV distributions to

(16:25):
all their member institutions, is out of money. The only
school that is actually sitting pretty is actually Michigan. And
we know this because Michigan has about a twenty billion
dollar endowment and they were the loudest dissenting voice in
the room when the Big Twelve came to their member
institutions with the idea of bringing in private equity, because

(16:47):
Michigan and their president essentially said, look, if we consummate
this deal with a private equity firm that you're bringing
to our to the table here, this essentially is a
payday loan. The loan will come do at some point.
We don't need to do that, and therefore basically forcing
every individual member institution to decide if they want to

(17:09):
do it individually. Ohio State has an estimated revenue of
like two hundred and forty two hundred and fifty million dollars.
Guess what, they reported a thirty seven million dollar deficit
last year. They're thirty seven million dollars in debt. If
any business annually actually made two hundred and eighty million
dollars a year, there's no excuse for you to represent

(17:32):
this thirty seven million dollar debt. That's a you problem.
You figure it out. Now, where is the spending coming from? Uh,
you know, there are a lot of different things. You're
paying coordinators three million dollars. Coaching salaries is they're through
the roof. LSU currently is paying like three different coaches now.
LSU is in a good spot because of the revenue
they generate every year. But when it comes to the

(17:54):
new reality of having to pay players, when it comes
to the new reality of having to keep up with
the Joneses and therefore spend and spend and spend. Too
many athletic departments have been spending in a manner that
is just irresponsible. And forgive me if I have zero
sympathy for you, because Edel Bannon filed his lawsuit in
two thousand and eight, you had seventeen years to prepare

(18:17):
for this.

Speaker 2 (18:18):
Too.

Speaker 1 (18:18):
Many non business people are in charge of budgets throughout
the course of you know, college athletics landscape across the country,
and that's why a lot of schools are operating in
the red.

Speaker 2 (18:31):
So the University of Utah.

Speaker 1 (18:32):
Does not have the revenue streams that Ohio State did.

Speaker 2 (18:37):
But here are the numbers for Utah.

Speaker 1 (18:40):
One hundred and nine million dollars in revenue should be
really healthy, right, Roughly one hundred and twenty five million
dollars in expenses the debt as I read today, as
I understand it is roughly seventeen mil in that area.

Speaker 2 (18:55):
But here's where it gets sticky.

Speaker 1 (18:58):
The non revenue generating sports cost the athletic department about
seventeen million.

Speaker 2 (19:03):
Dollars last year.

Speaker 1 (19:05):
So if we're talking about football and men's basketball alone,
which if we're honest, are the only two sports in
college athletics that actually do make money. You're doing all
right there, and you know, if the men's basketball team
could ever figure it out and get back to NCAA
tournaments and start making runs consistently, we would see better revenue.

(19:27):
But I was also told since you and I last
spoke yesterday, the gymnastics team does not make money. They're
close to breaking even, but they do not make money.

Speaker 2 (19:38):
The two revenue.

Speaker 1 (19:39):
Generators are obviously football, which is driving all of this,
and men's basketball. The other element that I think is
rather interesting is women's basketball seems to have found this
post Caitlin Clark boom footprint, but as the Athletic reported,
there are zero women's basketball programs across the country that

(20:00):
are actually making money. And that includes South Carolina, that
includes Yukon. This is a football and men's basketball business.

Speaker 2 (20:09):
So the fear is.

Speaker 1 (20:10):
This and I we'll learn more about this as details
roll out. Yesterday I said this new business, this new LLC,
This Utah Brands and Entertainment LLC, which is a partnership
between the University of Utah Athletic Department and their new
private equity partner again, Otro Capital out of New York.

(20:33):
My understanding is that it includes the properties of the
football team, the basketball team, and then the gymnastics team.
And I read that as a good sign. And here's why.
And I honestly don't know if how this is going
to unfold. This is just kind of my gut. And
we'll learn more about this as we move forward. Private equity.
As we talked about yesterday, there's one goal that we

(20:56):
cannot run from. I could try to spin this is
potentially a good thing. Let me be clear, it still
might be. We just don't know yet. I can't run
from the pitfalls. I can't run from the fans that
are concerned about what their new season ticket prices are
going to be.

Speaker 2 (21:09):
I don't know, okay, And though.

Speaker 1 (21:11):
That information will will come out as we go. Also,
a piece of information that we need to know is
how much of this money is being funneled to the
you right now, because there's no time to wait. The
transfer portal opens early January. If U Taugh football isn't
fully funded, not just with the twenty point five million
dollars that you pay athletes, but a good nil coffer,

(21:34):
you're going to start losing players. And I'm not talking
about the backup linebacker. They're just enter the transfer port.
I'm talking about Devin Dampier. I'm talking about Bird Ficklin.
I'm talking about way Shan Parker. I'm talking about Caleb
Lomu if he decides to come back. Like, you need
to have your backyard in order, and you need to
have it in order right now. So when are these

(21:55):
funds going to be funneled to the you? I don't
know the answer to that. Initially because the non revenue
generating sports were not included in this partnership.

Speaker 2 (22:07):
The way I read that meant that they're safe.

Speaker 1 (22:11):
Okay, because if you you view this through the prism
of the private equity guys, they're going to have their
accountants just pour over Utah's financials, pour over Utah's books.
And my guess is the lead accountant for Outro Capital
in New York doesn't give a rip. If Utah's softball

(22:33):
team is something that means something to people out here,
he's going to look at it as a line on
him and say, Okay, they're not making any money.

Speaker 2 (22:41):
There's no revenue being generate.

Speaker 1 (22:43):
Boom done finished over Utah Tennis, Utah Baseball. You know
college baseball has actually started to make some money in
certain places. Without seeing exactly which you know, what each
sport makes, red, black, whatever. I can't speak to anything
outside of basketball and football, which is the two revenue

(23:05):
generating sports and the driver behind all of these deals.
If the non revenue generating sports were included in this
new LLC, my fear would be the private equity guys
look at them as line items and just say, Utah
Tennis isn't making money?

Speaker 2 (23:21):
Boom done.

Speaker 1 (23:23):
I have to wonder, though, because they're not included in this,
does it mean they're safe and they'll continue to be
bankrolled by the football team, the basketball team, and whatever
amount of money is funneled into Utah as a result
of both Ultro Capital and then the members of our
community that were allowed to invest in this project. Because

(23:44):
the five hundred million dollar number that's being thrown around,
I don't think a lot of people have talked about this.
It's not just money that's coming from Outro, it's money
that's coming from the new private equity partners and whoever
in our community has been allowed and given permission to
inv in this. When is the money coming that's paramount?

(24:05):
We need to know that what are you doing with
the funds? Can you get the money prior to the
transfer portal opening so you don't lose your most talented players?
And then attendant to that, you need to add pieces.
There's an offensive line that needs to be rebuilt. You
need better playmakers on the outside like this has been
applauded as a piece of excellent news for Utah, and

(24:28):
I'm not saying it won't manifest as that in a
couple of years.

Speaker 2 (24:32):
We don't know.

Speaker 1 (24:33):
There are just a lot of questions that nobody's answering
right now that we need to uncover before we can
actually analyze what this thing is. Got several private equity
experts on the show today. The business of college football
and college athletics is covered by Matt Brown, probably on
a higher level than maybe anybody doing it. He is

(24:55):
the editor of Extra Points. It's a newsletter that I
used is to prepare for the show. He's gonna stop
by My brother Andrew Checketts, who's also a private equity
bro and has been for about twenty years, will join us.

Speaker 2 (25:09):
Live in studio.

Speaker 1 (25:09):
Jake Murphy, who has some thoughts that he's been sharing
on social media about the new partnership that Utah has
with Ultro Capital join us. But our first guest is
probably the biggest private equity expert that we could find
in the state, Richard Smith.

Speaker 2 (25:25):
Smittie, how are you, sir Spence?

Speaker 5 (25:27):
This is great. You know, this is like.

Speaker 7 (25:30):
The other night when I went to see Nate Bargatzi
at the Delta Center. Was a fun show. He's a
stand up comedian for people who don't know who he is,
money guy, and he had we thought he was coming
out to do his show and he had he had
four other comedians before him come out and do a

(25:50):
little you know, five minutes, ten minute stick whatever that
thing was. And he's trying to give them a boost
or whatever, you know, and uh, and that's what So
that's what you got here. This is like, you know,
let's get let's get Richard Smith on because he doesn't
know anything about this stuff. So he'll be like the
new you know, new guy. Will give him a little
a little pop, you know, as the opener, then kick

(26:12):
him off the stage so we can get the headliners
on and and I.

Speaker 5 (26:15):
See what's going on. This is this is the way
it is.

Speaker 7 (26:19):
You know, you have to when you're in this business,
you have to be able to have the ability to
just call it the way it is, and that's the
way it is, so okay, I you know that's that's
not a problem for me.

Speaker 1 (26:30):
Well, the way it is is you are an expert,
certainly in professional sports where you spent for decades and
at this point, I mean, there are a lot of
people that are panicked about this, and private equity has
been on the way for a while. Does it feel
like at this point everything is out the window and
they're really like, what's the line of delineation between pro

(26:52):
sports and college sports now?

Speaker 2 (26:53):
Is there idy at this point?

Speaker 7 (26:54):
Well, you know, the hard part is Spence is the
way that it's going right now. You know, the institutions
are in my opinion, it's all my opinion now just
from where I sit up in the twenty seventh row
of the games now and looking down they it just
seems like they're getting further and further away from what
the actual intent or purpose of their institution is, which

(27:19):
is these these places are are places of palaces of
higher education, higher learning, and you're supposed to go there
to be able to learn and figure out what you
want to do with your life and to be a
better person and be a young person who young adult
who comes out on the other end of four years,

(27:40):
five years in some cases like yourself, eight years, you know,
to graduate whatever, and which is okay, you know, But
that's that is the purpose of these schools. Now it's
gotten the sports part of it. And let's let's be honest, mens,
this is all about football and men's basketball at ninety
eight percent of the institutions. It has nothing to do

(28:04):
with the men's tennis team, has nothing to do with
the women's swim team or any of the other athletic
and endeavors at each school decides to be part of.
This is all about the revenue generating sports, and it's
about selling sponsorships, it's about selling tickets. It's about getting
people in the seats to to to buy a hot

(28:27):
dog and an overpriced beer or coke, whatever it is
to be able to fund what they what they're you know,
really fronting as part of the amateur athletic endeavor of
the institution.

Speaker 5 (28:41):
And it's just getting further and further out of whack.

Speaker 7 (28:46):
And instead of going against the grain and schools standing
up and going wait a minute, now is this what
we're supposed to be all about. Everybody is just jumping
on the on that boat that's going down the rapid
very quickly and decided to instead of swimming against the tide,
I'm just going to get on that boat and go

(29:06):
wherever it takes me. And you know, and I got
to try and do whatever I can to keep my
head above water.

Speaker 5 (29:12):
And so that's what we're gonna do.

Speaker 7 (29:14):
So if we have to go against BYU financially in
the case of Utah, we have to go against Texas
Tech as we've seen this fall in football, financially, we
are going we have decided we're going to get in
into that business and we're going to try and swim
with those sharks. And to me, it's really I don't

(29:34):
know it just the whole thing boggles my mind that
it's gotten to this point very very quickly.

Speaker 1 (29:41):
So a few things you know, in in reference to BYU,
they have the ultimate private equity fund in the Church
of Jesus Christ of Latterday since they don't need to
do this. They also have several very deep pocketed boosters
and donors that love BYU athletics and are fine donating

(30:03):
millions and millions of dollars without any sort of return
because they love BYU and then they're members of the church,
so they want the message of the church furthered. So
BYU has a built in advantage that UTAH simply didn't have.
Texas Tech has oil money. With Cody Campbell and his
powerful network, Texas Tech doesn't need to do something like this.

Speaker 2 (30:22):
UTAH had to find an answer.

Speaker 1 (30:24):
Smitty, your points are well taken, and I'm not going
to push back on any of them other than you know,
the sanctity of amateurism has long been put to rest,
certainly at least for five years when NIO became a
reality and the transfer portal became a reality. And now
they have at least curtailed the transfer portal to one
portion of the calendar instead of letting people walk all

(30:45):
the time, which was just nuts. But if UTAH didn't
do this, I'm not sure what was out there for
them to keep up with everybody else in college athletics.
You know, the SEC and the Big Ten have much
better TV payouts per member institution because their TV deals
are more valuable, and it's simple because of what more
people watching those games, So they go to ESPN, they

(31:07):
go to Fox, they get a better TV deal. So
the Big ten, the SEC schools get a better TV
payout than the Big twelve schools Texas Tech with oil money,
BYU with the church backing them. And then they're powerful
boosters and donors that have already proven that they're ready
to step up to the table. And I don't know
that Utah could have waited, like it felt very prescient

(31:27):
for them to find a solution.

Speaker 2 (31:28):
Here, is this the best solution? I can't answer that.

Speaker 1 (31:32):
I mean, this is very similar to what the Big
Ten brought to the table to their member institutions. And
the Big Ten example is how he started the show it.
College football or college athletics does not have a revenue problem.

Speaker 2 (31:45):
They have a spending problem.

Speaker 1 (31:47):
The Big Ten killed the old Big East as you
and I knew it, which was a great basketball conference,
still a fine basketball conference, but a good football conference,
not a great one. Then they went out west and
took La you know, the second biggest TV market in America.
They grabbed Maryland because they wanted the northeast footprint. They
grabbed Nebraska from the Big Twelve so they could have

(32:08):
a championship game in the name of revenue.

Speaker 2 (32:10):
And guess what, they don't have any money.

Speaker 1 (32:12):
Yeah, so they tried to consummate this private equity deal
and Michigan, because of their twenty billion dollars endownment, said no.
And Michigan Michigan's president said something then when I read
it this morning, really suit out to me. He said,
anyone that gets in the private equity business, you are
taking a pay day loan, and that loan is going
to come due. But other than this avenue, what other

(32:36):
direction could Utah have gone? Well, look, Spence, you have
to have the the.

Speaker 7 (32:42):
Intestinal fortitude to decide what you want to be and
what you want the institution that you work for to represent.
You could be they could very well if they wanted to.
They could be Saint Francis from the last spring in Pennsylvania,
who who won their their their conference right in men's basketball,

(33:05):
went to the first round. The NCAA got pounded because
it weren't, you know, on that level athletically, but they
made the tournament. And then the week after the tournament
they make an announcement that we're getting out of this business.
This does not make sense for what our institution is about.
And and I'm sure there's a large part of it

(33:25):
where they looked at it and said, we just can't
keep up with the Joneses. So we're gonna get out
and we're gonna, you know, to use a poor analogy,
we're gonna move out of the neighborhood and move into,
you know, a lesser neighborhood somewhere because we can't keep
up with what everybody around us is doing. We have
to concentrate on what we're here for, which is the

(33:47):
academic pursuit of our students and the education of them
to go forward in the world. Obviously, you know, big
money sports has infiltrated athletics. Uh. Now in in in
the university setting all over the country. Everybody wants to
be part of that. It's a raw, raw feeling. It's

(34:08):
making your alumni feel good. Uh. Nobody really rallies around
the mathematics or the engineering department when they make huge
research discoveries or whatever that might change the world.

Speaker 5 (34:22):
But they do at.

Speaker 7 (34:23):
The Saturday night basketball game, right, and so whatever that
is in our in our culture and our society, that's
that's the way people respond. And the universities have said
we're going to follow that and we're going to go
down that stream to try and and uh and stay
above water and try and compete. That's what Utah is doing.

(34:45):
My my take on it, Spence, is this is simply,
while it's a uh, it's a forward thinking move by
by the University of Utah to do this, uh, the
way they're doing it looks to me and and you're
exactly right. I'm not a private equity guy, and I'm
not a finance guy and all that, but it just

(35:06):
looks and feels like what they're doing is trying to
figure out how we can take care of this at
this moment and figure out how we can stay with
the big dogs at this moment in time, knowing that
five six, seven years from now the landscape might change,

(35:26):
we might have to switch to Plan B or D
or F or whatever it's going to be. And what
we're doing now is just kicking that can down the
road so that we can survive at the moment in
the realm that we're in right now. And then and
five years from now, there'll be other rules, and there'll

(35:46):
be other changes to the landscape, and then we'll have
to figure out what those rules are and how to
respond to them at that time. But today we're doing
this to try and figure how we can stay with
all the other big boys.

Speaker 5 (36:03):
On that platform.

Speaker 1 (36:04):
Yeah, and so to answer the question of what this
is going to look like and then kind of understand
how it will be executed. There will be a seven
member board of directors. Mark Harlan will be the chair
of that board. There will be three other seats that
will be a part of the Utah Athletic ecosystem or

(36:25):
the university. I don't know if Taylor Randall is taking
one of those seats. My guess is, well, my hope
is that the answer is yes, because I really trust
Taylor and I think he's a really bright guy. So
you got Mark Harlin. You've got three other seats that
belong to Utah people. You have two seats that belong
to Outro Capital, and then you have one seat that

(36:46):
will go to a local business person that has invested
into this new company, which is Utah Brands and Entertainment LLC.

Speaker 2 (36:55):
I don't know who that person would be.

Speaker 1 (36:57):
My guess is you're gonna hear the echos, You're gonna
hear hunts, You're going to hear garf, You know, you're
going to hear a lot of the names that you
would expect, and then there's going to be a president
who is going to run Utah Brands and Entertainment LLC
that reports to the board, and then once a year,
the board has to report to the Utah Board of Trustees.
So the reason why this is pertinencemitti is that the

(37:19):
the the controlling stake of the new company does belong
to the university, and then the decision making as it
pertains to scheduling and hiring and firing coaches remains in
the lap of Mark Harlan. So that I mean most
private equity companies and by the way, OATRO has the
we've got three different companies in their portfolio where they

(37:41):
bought controlling interest their mo up to this point as
you got to give us at least fifty one percent
and the majority of board seats. This is the first
investment where they have not bought controlling you know, percentages,
and they don't have the majority of the seats on
the board. And even Charlie Baker, the president of the NCAA,
was asked about this at the Sports Business journal Intercollegiate Athletics.

(38:04):
For him last night, and he called it a really
well thought out and well designed plan. So I bring
all that up because if there is a piece of
good news here, because I think people have this vision
in their head that a bunch of New York finance
pros are about to come out here and change everything. No,
the decision making process is still the same, and it
really is up to Mark and Taylor, and they maintain

(38:27):
controlling stakes here.

Speaker 2 (38:29):
So that's good news.

Speaker 5 (38:30):
Yeah.

Speaker 7 (38:30):
And what's going to happen, Spence's how they make those decisions,
whether it's coaches they hire, whether it's those coaches and
the people who work with them on their staffs, can
recruit student athletes to come in that are going to
keep them competitive and keep them on a national landscape,

(38:51):
so to speak, in the next several years. Then Otro
Capital is going to be standing on the sideline going, hey, hey,
that's a good job. Way to go with that and whatever.
And they're gonna be waiting to you know, from their perspective,
this is this is a strict this is this isn't
about you know, the the rah rah and kumbaya of

(39:12):
the University of Utah Athletics and being a booster and
a fan or whatever. Outro Capital is in this for
one reason, and that's to make money at the end
of the day. And so they're gonna hope that the
U can make good decisions, can can have their programs
on the upper echelon and and be competitive on a
national landscape so that when the time comes for Otro

(39:37):
Capital to exit out the side door, they can say, well,
we were gonna sell our equity stake back to you,
uh for X amount of profit.

Speaker 5 (39:47):
Uh. That's what they're in this for.

Speaker 7 (39:49):
They believe obviously on some level, that the University of
Utah can help them achieve that.

Speaker 5 (39:55):
Goal, and that's what they're in it for.

Speaker 7 (39:58):
And it gives the you capital investment up front right
away now, so that they can try and make decisions
going forward that they think are going to benefit their
overall athletic department.

Speaker 1 (40:11):
Yeah, and you and I were talking about this off air,
and I want to be clear here, we're just discussing
possibilities and potential ramifications based off of certain dynamics, a
lot of which are still not public. University of Utah
is a publicly owned institution tax exempt status now being
run for profit with this side LLC. Penny for your

(40:34):
thoughts state legislators. I mean, I don't know how, you know,
I don't know how the people that run our state
politically feel about this.

Speaker 2 (40:39):
Yet I'd love to hear from them.

Speaker 7 (40:40):
Yeah, and that, and that's going to be. I would
think something that they already thought of. I would assume
something that they've they've gotten lined up in terms of
how they make sure they address that issue. Look, we
just saw in the last couple of months on the
on the NCAA football landscape, what was going down in

(41:00):
the state of Louisiana with a public institution like LSU
Louisiana State University in Baton Rouge. And when they fired
their football coach, and the football coach had a fifty
three million dollar buy out in his contract if he
got fired without cause, there was a little scuttle but
about that. The governor got involved in it to say,

(41:24):
you know, this is awful whatever you know. So now
you had you had the governor of the state of
Louisiana weighing in on what the athletic department at LSU
is doing. So to go so far as to say, yeah,
the athletic director who set that up, he didn't know
what he was doing, you know whatever, and since then
he's left and they put in a guy who'd been

(41:44):
there for a while, but someone else is now in
that seat, and now they bring in Lane Kiffin and
have the whole thing set up even more so in
that regard if you're following college football at all and
the Lane Kiffin soap opera. But that's that's the their
state government overseeing or at least making public comments about

(42:06):
how they're running their football program. You have to assume
that the Utah State Legislature is going to be really
looking at this closely, because you're exactly right. It starts
addressing the issue of what your tax exempt status is
as a public institution and what that means for the

(42:27):
people in the state of Utah.

Speaker 1 (42:28):
And what we can't run from, whether we try to
spin this is really good news today or talk about
the potential benefits down the road, is what private equity
is about. And the one thing that they care about
no matter what, whether it's sports or hotels or restaurants
or whatever. I have a friend who text to me
who was working for a local real estate app company

(42:51):
and they found this lane where they were doing really well,
and guess what happened. Private equity said, oh wait, they're
making some money. We're going to give them I don't
know million dollars to continue their growth. And then we're
going to come in and we're going to fire everybody
and make sure expenses are cut in the name of
revenue growing. So when we sell you off, we have
made money. That's all they want to do. So we

(43:14):
have to be very clear about that. We cannot run
from that. And to back up what I said earlier,
where college sports does not have a revenue problem, they
have a spending problem. We actually have numbers here where
last year Utah Athletics brought in one hundred and nine
million dollars in revenue. Any business that brings one hundred
and nine million dollars of revenue you would think is

(43:34):
in a good spot. Problem is expenses about one hundred
and twenty five MILI. They were roughly seventeen million dollars
in debt last year and the non revenue generating sports
cost them seventeen million dollars. Right, So it's fair to
ask what does this mean for soccer and tennis, in
swimming and track and field. The interesting dynamic here and

(43:57):
I don't know the answer this. Taylor Randall is going
to do some studio next week, so maybe you can
shed some light on this. The Utah Brands and Entertainment LLC,
the offshoot company that's a partnership between Utah and OTRO.
Their new pe partners only includes football, basketball, and gymnastics.
It does not include these other sports. So I'm caught
in between whether or not that means the other sports

(44:19):
are safe and bankrolled by this entity, or will OTRO
come in with their accountants that don't give a rip
about Utah soccer and say line item in the red gone.
I don't know how that's gonna shake out. I think
that's something that will be interesting to see over time.

Speaker 7 (44:35):
Yeah, what I think, Spence, They're gonna They're gonna concentrate
on the big boys sports and for you, and every
school is a little bit different.

Speaker 5 (44:45):
Most schools over around.

Speaker 7 (44:47):
The the the football program and the men's basketball program
as the big revenue producers. Here at the University of Utah, Uh,
not a great revenue producer, I don't believe.

Speaker 8 (44:59):
Uh.

Speaker 7 (45:00):
But the other big ticket item, as it's been for
years on the University of UTAIH campus, has been women's gymnastics,
and that's the one that brings in eight, ten, twelve
thousand fans for each one of their their their meets.
No other none of their other sports do that. Even
when women's softball was having their big run a couple
of years ago and everybody who's getting.

Speaker 5 (45:20):
On board with that, you you know, I went.

Speaker 7 (45:23):
I went to several of the games they had because
that's all they could fit, you know, maybe fifteen hundred,
maybe two thousand, you know, fans jamming the outfield, you know,
area to be able to support them. You know, the
women's volleyball program, which has been very competitive in recent
years under bethl Naire, you know, they can only get

(45:45):
a limited amount of people unless they go into the
Huntsman Center for big matches, which they've done from time
to time. But that's those sports are all going to
be affected by how the bigger programs and money producing
programs do and how that money gets into the coffers for.

Speaker 1 (46:03):
Them ESPN seven hundred and the Rocky Mountain Chevy dealers,
and by you to help those at the road home
this holiday season with needed blankets, coats, shoes, hats and gloves.
Drop off donations at any Rocky Mountain Chevy Dealer Visit
ESPN seven hundred sports dot com for dealer locations, spread
the warmth and help others find their way home and
join us at the Midvale Road Home Media thon December

(46:26):
eighteenth through the nineteenth One more segment with Smitty coming
up on the other side.

Speaker 2 (46:30):
Is it NBA Cup Night?

Speaker 7 (46:33):
Is the second night of NBA Cup Quarter Finals? Come on, Spence,
you know this well, No, I really know, because I
know you were riveted last night to the TV, but
there was a different energy about it, and I know
you spent half an hour trying to find the one
game on Prime Video.

Speaker 1 (46:47):
It started on the show today on the station today.
Michigan has fired Searon Moore. He has been terminated with cause,
effective immediately, following a university and investigation. Credible evidence was
found that Sharon Moore engaged in an inappropriate relationship with
a staff member, and the conduct, according to his contract,

(47:09):
constitutes a clear violation of university policy, as the University
of Michigan maintains zero tolerance for such behavior. So being
fired for fired for cause, of course, not only means
he doesn't have a job anymore, but I would imagine
like all college coaches, he has a massive biout clause
that will not be executed. So that is a very

(47:30):
expensive mistake for Sharon Moore, who Smittie is now out
of a job.

Speaker 7 (47:34):
Yeah, and you know, in a very very good coach,
and the interviews I've seen with him the last few
years seems it seemed like a really uh, stand up
guy and and a good coach to take over for
Jim Hardball when he left Michigan. And it's it's just,
you know, it's very disappointing if if that's what the

(47:56):
case was, that that something like that, and that he
let his you know, his personal emotions get in the
way of you know, a very growing and burgeon owning
college football coaching career that he that he had with
one of the premier institutions in the country.

Speaker 2 (48:15):
Now, yeah, no, it's it's really unfortunate.

Speaker 1 (48:18):
Uh So Sharon Moore is now out of a job
and uh ultimately will not receive any portion of his buyout.
All right, we were talking smittee of course, last segment
about this historic partnership between Utah Athletics and oak Trow
Private Equity out of New York.

Speaker 2 (48:37):
When it comes to the concern.

Speaker 1 (48:39):
So so the one, well, there are a lot of questions,
but one thing that we just don't know is how
this is going to change the consumer experience for just
your average Joe fan because they're according to the reports
and the New York Times via the Athletic has a
really good piece that was released kind of right off
after we were signing off Air Matt Baker, Justin William

(49:01):
Stewart Mandel, there's the Ross Dellinger piece as well.

Speaker 2 (49:04):
Dan Wessley Espen has got involved.

Speaker 1 (49:06):
So what we understand based off the reporting is there
is a portion of this community that has been allowed
to invest in the new company, this Utah Brands and
Entertainment LLC, which of course is the new company that
Utah has partnered with Outro to create. And then there's
a portion of Utah donors and investors that have been
allowed to buy pieces of equity in this.

Speaker 2 (49:28):
I don't know who they are. I don't know.

Speaker 1 (49:30):
You know, if there's a certain criteria about how much
money yet I would imagine there was a certain threshold
that I had to be met. One thing I can
tell you when it comes to private equity getting involved
is typically things change, Things change with the stadium, things
changed with the arena, things change with the consumer experience.
I mean, look Ryan Smith, his VC, you know, Private

(49:52):
Equity bros By the Jazz from the Millers.

Speaker 2 (49:54):
Initially he was like, yeah, we don't think we're going
to change very much.

Speaker 1 (49:56):
And they just went ahead and change everything, including a
lot of changes with the building, including a lot of
changes with the consumer experience, and then changing the team.
And we're year four of an unserious competing basketball team.

Speaker 2 (50:08):
Things just change. So my premonition here is.

Speaker 1 (50:13):
And I don't know this, but when you know, within
the next month or two or whatever, Utah football season
ticket holders are going to get an email to say, hey,
we love you, and by the way, thirty percent up
charge for your tickets next year. Whoever decides to tailgate
those tailgate lots aren't free, well guess what you're probably
gonna be upcharge twenty thirty percent or whatever that looks like.

(50:34):
My question is what is the reaction of the rest
of the community that will now be asked to spend
more on tickets, spend more on merch. Devin Dampier Jersey
next year might be one hundred and eighty bucks instead
of night I don't know what the numbers look like.
That to me is going to be key here how
everybody responds to an additional ask to generate more revenue.

Speaker 7 (50:55):
Yeah, and what typically happened spencers is you get those
kinds of up charges initially when there's a big change,
you know. And I don't know if this is going
to impact that at all, But what happens is the
fans whenever they get they get hit like that, they
tend to react in a manner where they're upset about it,

(51:20):
they complain about it, they want to talk to somebody
because this isn't right. I've been a season ticket holder
for seventeen years and now all of a sudden, it's
twice as much as it was three years ago, and
this doesn't make sense, and whatever, whatever, and the answer
they get, you know, quite often as well, if we
understand your frustration, you're concerned. But if you if you

(51:44):
don't want to hold on to your seats any longer,
you don't want to be involved, whatever, we appreciate it,
and we will move on to the next guy on
the list, because there's always the next guy on the list,
and they want to get involved. And the whole thing
becomes purely transactional. It's just, you know, do you want
to you want to give us the money to be

(52:05):
involved with us, or you don't. It's very simple. The
Jazz went through that in the first iteration of the
of the arena of the Delta Center when the Millers
was still the majority owners of the team in twenty
fifteen sixteen seventeen, when we had major renovations to the

(52:25):
Delta Center and some seats got moved around, and some
people were affected by their longtime seats either not being
there or now all of a sudden being doubled in
price in some cases, and people just got elbowed out,
and people had to make a decision do I, you know,
do I want to stay involved at a new price

(52:47):
point or I don't. Sometime I know I have friends
who had tickets, who had great seats, who told me, Hey,
I have great seats, and I wanted to keep them,
but they but they told me it was gonna be
twice as much money the next year, or if I
want to pay the same money, they can figure out
a way to get me from my row five seat

(53:08):
to my Row twenty four seat. And so they're moving
me twenty rows back to and wanted the same amount
of money. So there are always those kinds of things
that come along with it. And I know, in the
case with the Jazz elise at that time, I don't
know how it is now. They simply went to their

(53:29):
waiting list of people, you know, when somebody dropped out
and said I can't afford anymore, they priced me out.
I'm out of here, and the Jazz said thank you
very much, and they went. The guy picked up the
phone and called the next guy on the list, and
they got somebody else to buy the seat, you know,
and so so, and in that regard, there's always going
to be somebody waiting if they think your product is

(53:51):
worth their time and money. Right, So, the U has
a very good football program. They have a basketball program
that's uh, that's improving the newness of the Alex Jensen era.
People excited about that. So people seem to want to
be involved in that more more so than they have

(54:12):
the last few years. So that's going to be those
are going to be the things I would think that
they're going to be harping on to try and make
sure that they hold on to the ticket buyers. The sponsors,
the advertisers that they already have in the fold.

Speaker 1 (54:27):
You know, it's interesting to consider the Jazz so more
often a year after year during you know, the time
you were there, and of course the i'll call it
camelots for jazz fans, when John and Carl and Frank
and Jerry, and then later with Dee Roll and Booze
and Kevin calling the shots, and then even extending through
the Mitchell and go Bear Quinn Rodden, the Jazz were

(54:48):
among the top six or seven in attendance every year
and sometimes even higher than that. Last year the Jazz
were fifteenth, so they weren't near the bottom. And ultimately,
if you look at some of the teams that are
around them, this list is interesting because the Bulls led
the league in attendance last year.

Speaker 2 (55:05):
Then it was the Sixers, the Knicks, the Nuggets, the Heat.

Speaker 1 (55:09):
Top five Sixers were a mess because they couldn't get healthy.
The Knicks were resurgent, the Nuggets were very good, the
Heat they were fine, but Chicago wasn't very good. And
then if you look around the Jazz, ironically enough, Oklahoma
City's fourteen, Jazz fifteen, Warriors sixteen, so there's really no

(55:29):
parallel between performance and attendance, which I find very fascinating.

Speaker 2 (55:33):
But I think.

Speaker 1 (55:34):
Until you know, it's a long way of me asking
you how long do you think jazz fans are gonna
ride with his team?

Speaker 7 (55:41):
H Well, what's interesting about the attendance figure suspenses is
I don't know every team handles it differently. I don't
know how the NBA levels that playing field in terms
of the reporting of it. I can tell you from
personal experience of being involved in the NBA all the
years that I was, there are some places where it's
just not as important an entity as it is others.

(56:05):
You say, for example, the Miami Heat, we're in the
top five and ten. I could tell you, Spence, the
Miami Heat is near the bottom of the group of
NBA teams. When you talk about whether the fans are
into it, whether the fans show up, whether the fans
really buy the tickets, I'm not sure how they equite that.
On the flip side, Oklahoma City is very much like Utah,

(56:28):
and that the fans in San Antonio, where it's the
big ticket in town, it's the big show in town.
Everybody wants to be involved in it. I think that's
been the way that it's been with the Jazz, you know,
since they moved here in the eighties and got better,
you know, with Frank Laden's direction, and then with the
Miller's ownership leadership coming into the fold in the mid eighties,

(56:52):
that became the Jazz became they what they were all
through the nineties, in the two thousands. Now, Slake City
also is a different community. It's a different place. We
now have the the NHL is in town and getting
a great response here in the in their second year

(57:12):
UH of playing downtown to the Delta Center. The Miller
family is trying to get major League Baseball. Who knows
if that's going to happen, but you can see that
that dynamic in in in the local sports scene starting
to evolve and change with the the growing population of
the UH you know, Silicon Slopes area, if you will,

(57:35):
any the area of our state in between Ogden and Provo.
And you know, does that mean at some point they
start losing a hole on the faithful Jazz fans because
there's just too many other options for them to be
involved with their money and their time and interest. If
your team is not going to be competitive, you know,

(57:58):
anytime soon do the fans just say, well, that was
a fun ride, but you know, we're on to the
next thing or whatever the other things have get involved
in around here, you know, not not to say not
the least of which you say, you know, at the moment,
really the hot ticket item when you're talking about sports
at the moment is b YU men's basketball. That's the

(58:18):
hot ticket I because they got the bands, kid and
the and their top ten team.

Speaker 1 (58:23):
UH.

Speaker 7 (58:23):
The football team obviously has it rolling at the moment
with Kolonie Slataki now committing a long term with them,
and it looks like their program is UH is running
UH full steam. And and so people have the other
areas where they can put their interest in their money.
And you know, if the Jazz uh are cannot turn

(58:45):
it around and cannot start fielding competitive teams that look
like they can they can compete most nights, then it's
gonna be interesting because at some point that starts wearing
down a little bit and people, you know, and what
happened Spencer's is you got the timing of it. So
you got the generations right, we got we got a
younger generation.

Speaker 5 (59:05):
We're starting to grow up.

Speaker 7 (59:06):
When they start if they're teenagers now and the Jazz
aren't really competitive whatever. When they become young adult ticket
buyers in their twenties, maybe they don't have that kind
of affinity that people like you and I have, you
know from our age groups, you know, with the Jazz
were competitive and everybody wanted to be part of that process.

Speaker 2 (59:26):
Yeah, a really good point.

Speaker 1 (59:27):
I mean, you're in danger of a generation, you know,
just having the experience that our pro basketball team is
average at best, which it never has been outside of
a one or a two year period before.

Speaker 2 (59:40):
UH, Scotti or Kevin or.

Speaker 1 (59:42):
Dennis was able to really pivot very quickly, which I
continue to remind people of how rare that is across
the landscape of the league, you know what I mean.

Speaker 7 (59:50):
No, we had we were very fortunate in three four
when both John Stocktor Karmelone, John retired, Karmelone have to
finish his last year with the Lakers trying chase a ring.

Speaker 5 (01:00:05):
We had to turn it over. We had a.

Speaker 7 (01:00:09):
Quick turnaround because we we were fortunate, again timing and
UH being a big part of it. But we had
the good fortune that we had.

Speaker 8 (01:00:18):
UH.

Speaker 7 (01:00:18):
We had the kind of teams that we had, We
had built a culture. We had Jerry Sloan, who was
heading up as our coach, uh you know, Hall of
Fame coach uh in in right in the mix at
that time. And so that summer free agency hit just
happened that Carlos Boozer and the Meto Corps were both
free agents. You know, Cleveland messed up the Carlos Boozer

(01:00:43):
uh contract thing that allowed him to slide out and
get more money from Utah. Memo wasn't going to be
signed by the Pistons because they they had a very
good team at the time. They were competing for NBA Championship,
which he won with them his rookie year. Uh, but
they were gonna have to be paying their main guys

(01:01:03):
the next couple of years. They were looking ahead to
Rip Hamilton and Chauncey Billups and and Tayshaun Prince and
Ben Wallace.

Speaker 5 (01:01:11):
They were gonna have to pay those guys.

Speaker 7 (01:01:13):
So there was somebody who was gonna fall out money wise,
and that happened to be Memos, a young guy.

Speaker 5 (01:01:20):
Un well, it was, and it was great for us.

Speaker 7 (01:01:23):
He was he was there and right yeah, well no,
not even that he was like the eighth or ninth.
I mean, you know, but he was a young guy.
Detroit liked him.

Speaker 9 (01:01:33):
Uh.

Speaker 7 (01:01:34):
But we also had a good relationship with Joe Dumars,
who was running the Pistons at the time, and Kevin
and he had very cordial conversations and about it, and
and uh, you know, Joe said, hey, look, we're not
gonna be able to match anything you do because we
got to save our money for the other guys who
were pulling the wagon at the moment, and so they
just knew they just had to shrug and go, well,

(01:01:55):
that's just we we can't pay everybody. And that's as
we've talked about before on the show, that's what happened
at okay Se when they had Westbrook and Hardin and Durant.
That fell apart much sooner than it should have, in
large part because they couldn't pay everybody what they what
they felt they were worth or what they wanted. So
the jazz in that in that regard were able to

(01:02:17):
get Memo and Carlos Boozer at the same time. And
then the next year, after a year uh kind of
in between, then we we drafted Darren Williams and and
we're back in a very competitive mode very quickly with
Andre Carolenko and Ronnie Brewer.

Speaker 5 (01:02:32):
In that group. So you know those things.

Speaker 7 (01:02:34):
Sometimes you can plan it, sometimes you can execute what
you've got as a plan. Sometimes outside forces or circumstances
come into play that may benefit you and and but
you have to be ready to jump on those and
take advantage of them when they do present themselves. The
Jazz and four oh five we were able to do that,

(01:02:57):
and Kevin O'Connor was really martin quick to the draw
on that, and we were all on board with what
we were trying to do in that time, and as
it was Jerry Sloan. And that's what the current iteration
of the Jazz now twenty years later. I can't believe
it's twenty years later, but you know what they're trying
to do now is to position themselves financially to have

(01:03:18):
some money. That's why they've got several expiring contracts on
their books this year with Nurkic and Kevin Love and
Anderson and George and Niang, all those guys won't be
here a year from now because their contracts will expire,
and the Jazz will use that money to try and
go get somebody like the Jazz did twenty years ago

(01:03:39):
with whether it's a boozer type or whatever. And then
also hope they get some lottery luck to go along
with marketing and the young kid as Bailey they got
this year and try and start patchworking something together that
that can make sense for them, you know, going forward.

Speaker 1 (01:03:55):
I think you because we were discussing attendance numbers and
whether or not they're dipping here in Salt Lake and
what the data says because Intel, and this is the
complicated thing, like can tell any team that is in
a spot of purgatory feels hit in the pocketbook the
Clippers for years under Donald Sterling.

Speaker 2 (01:04:16):
I mean it was unseious.

Speaker 1 (01:04:18):
He didn't give a rip right and obviously he was
a pos and had to go for several different reasons.
But I think there's a sentiment and I want to
bring this back around to the college athletic landscape with
what is going on with private equity and look, fans
are in different buckets. I think a lot of fans
just want to get home from work and watch a

(01:04:38):
damn game and chill out for a minute, or get
an opportunity to maybe take their son to go watch
an NBA game and they don't really give a rip
about anything beyond that.

Speaker 2 (01:04:46):
Then there are more passionate fans that actually do care.

Speaker 1 (01:04:48):
We've always had very knowledgeable, passionate basketball fans in our
state because we're a basketball state in a lot of ways,
even though college football certainly has made a ton of
inroads over the past couple of decades.

Speaker 2 (01:04:59):
But there's a general disenchantment.

Speaker 1 (01:05:01):
With pro basketball because of you know, a seventy six
billion dollar TV deal, Like, even if attendance isn't great
for you, you still get a piece of the new
TV deal. So revenue is through the roof and the
business of basketball is good, and so what's your motivation
right to build the championship team when all you're telling
us you really care about is how much money you're making.

(01:05:22):
And oftentimes you hear people say the quiet part out
loud when Durant will say nobody thinks of the fan
or as I often referenced, the Jason Kidd sound by
it after the Mavericks were eliminated from the playoffs, that
caught me completely dead on my tracks when he said
they just lost and he's like, you guys don't get it.
We are millionaires cheering for each other. It's like, Okay,

(01:05:43):
we know, but don't say that, right. Is there a
danger of the money becoming so big on the college
side that the people that are turned off because of
big money in pro sports are going to be turned
off because of big money in college sports.

Speaker 5 (01:05:56):
Yeah.

Speaker 7 (01:05:56):
Well, you know we're seeing already Spence with the the
NIL landscape and and this uh outro capital coming in
with the University of Utah landscape and seeing what happens
you know, with that going forward. But it's it's it's
it's really taking away the personality of the teams and
it's really becoming, you know, something that's faceless and something

(01:06:20):
that's you know, more of a transactional arrangement.

Speaker 5 (01:06:23):
I mean, I mean, now with.

Speaker 7 (01:06:25):
The transfer portal that's set up, the whole thing that
that your team can turn over every single year, you
don't have guys that are the guys you're rooting for
for for three or four years, for your team as
it builds up and as it gets better or improves
or or had some success and you want them to

(01:06:45):
duplicate that success the next year, because you don't know
who's going to be wearing uniform number four next year. Uh,
you know it's uh, you know, the the Utah basketball
last year. I know, I had had a kid who transferred out,
you know, with the change of the coaching staff in
the spring, who and and I can't remember where he
went now off the top of my head, but he
was he was going to his fourth school in four years,

(01:07:09):
you know. And he was just and he's just the
middle of the road player. You know, he's trying to
get the next best thing for himself. And but that's
what you're able to do if you're a college athlete.

Speaker 5 (01:07:21):
Now you can pick up and move when you want to.

Speaker 7 (01:07:25):
You don't like what happened to practice this week, and
the and the coach didn't play you at the game
on Saturday night. On Sunday, you can move out of
the dorm and pick up and move to another school.
You know that that has happened, That that those things.

Speaker 5 (01:07:40):
It's everything is.

Speaker 7 (01:07:42):
So tentative and so immediate now that the fan at
some point it just seems like you're just gonna you know,
it's the old Jerry Seinfeldt bit about you know, growing
up rooting for your guys. But now it's just you're
just rooting for laundry because be cause you don't know
who's underneath the helmet at quarterback. You just know he's

(01:08:04):
worrying number four. This year, his name is Dan Pierre.
Next year it's gonna it may be somebody else. Whatever.
And so your affiliation is to the uniforms of the stadium,
the local you're in because the players, you don't know
who they are, uh, because they move in and out,
and and it's just gonna continue to be that.

Speaker 9 (01:08:24):
Uh.

Speaker 7 (01:08:24):
You know Randy Ray at Weaver State, you know, great
coach up there for sixteen years. She should have been
doing it for another four or five years. But as
soon as this stuff hit three years ago, he said,
I'm out of here. I can't deal with it because
if I get a Damian Lillard again, if I'm lucky
enough to do that, he's only gonna be here for
a year, maybe not even a year, and somebody else

(01:08:46):
is gonna come in and poach him and give him
more money or whatever, and he's gonna have to leave
for family and personal reasons. And so I'm gonna always
be swinging up hill. And that just seems like that's
what's happening now, Is that the rich are trying to
get richer, and the other teams are trying to try
and keep up with them to see if they can

(01:09:08):
stay on that competitive landscape. In the whole transaction of
all that stuff, the fan, the interest just seems to
get way laid in.

Speaker 2 (01:09:16):
The dust man.

Speaker 1 (01:09:18):
It is a wild time with things changing at a
rapid pace. If you missed it, chro Owan Moore has
been fired by the University of Michigan for an inappropriate
relationship with a staffer. We'll catch a break. We're gonna
bring in Matt Brown coming up. He is the editor
of Extra Points. I call him the Professor because he's
very smart. My brother, Andrew Checkets will join us live
in studio. He is a private equity bro and he's

(01:09:39):
also my brother. I continue the program today reacting to
the massive news that was broken yesterday by Ross Dellinger
of Yahoo Sports that the University of Utah has essentially
consummated a partnership that is the first of its kind.

Speaker 2 (01:09:57):
We'll dig into this throughout the course of the rest
of the show.

Speaker 1 (01:10:00):
Told porter, I need the professor, Matt Brown, the editor
of extra Points on a Wednesday afternoon. Look, I know
technically You're not a professor, Matt, But for the sake
of the conversations we have, is it okay if I
call you professor Brown?

Speaker 8 (01:10:15):
We can do that.

Speaker 9 (01:10:16):
The tween jackets still in the closet, I mean, and
I listen, I sell college curriculum.

Speaker 10 (01:10:21):
So that's like, maybe that's what you could call me
the adjunct.

Speaker 1 (01:10:25):
I love it, And I think we could create like
a characterture that you could just use throughout the course
of all your radio appearances. And maybe, you know, we
could just create a brand and suddenly you get some
nil action.

Speaker 8 (01:10:37):
If only you.

Speaker 9 (01:10:38):
Know it's big curriculum, Big bookstore wants to throw some
money at me here.

Speaker 8 (01:10:43):
I would love that. Or shoot big Cookie too. I'll
take that money.

Speaker 1 (01:10:47):
Oh we'll get to Cookie bro today, Matt, no doubt
about that. But look, you and I have discussed for
years now the private equity was probably on its way
to collegiate athletics, and now it's here, and it's here
an hour backyard.

Speaker 2 (01:11:00):
I just want your instant reaction to the deal and
some of your.

Speaker 1 (01:11:03):
Takeaways, now that you've had a day or so to
kind of just digest it.

Speaker 8 (01:11:07):
Yeah.

Speaker 9 (01:11:08):
I actually I'm going to have a full newsletter about
this tomorrow.

Speaker 8 (01:11:11):
Morning, and it's all written and edited here right now.

Speaker 9 (01:11:15):
What the question I keep getting, and it's probably one
that you guys have talked about too, is just like, hey,
is this a good deal or not?

Speaker 8 (01:11:21):
Is this a good idea?

Speaker 9 (01:11:23):
And my terrible sports and radio answer is, I don't know,
because there's so many financial specifics about this that we
don't know yet. And you know, I filed the grammars
and I know all the other local reporters have too,
and we'll get our denial letters sometime in March, and
hopefully we'll be able to get some more information between
al And then the concern that I guess the two

(01:11:44):
concerns that I have about this are not totally understanding
what Utah really wants to do with this money and
how much more revenue can Utah Athletics conceivably generate even
with the help of a private equity company that has
lots of ties to professional sports and audience data and

(01:12:06):
more efficient multi uh you know, corporate sponsorship deals. I
think that there's room room for that number, bro, and
I'm very open to being suggested, you know, from two
suggestions from Utah or Utah line voices about how much
higher it could get.

Speaker 8 (01:12:20):
But I don't think it's going to double. And if
and if you can't.

Speaker 9 (01:12:25):
Grow it by two x, three x or anything, I
think the math behind these kind of deals gets tricky.

Speaker 2 (01:12:30):
All right, So here's how I want to attack this
with you.

Speaker 1 (01:12:32):
Let's hone in on why this could be a good thing. First,
What are the truth what's the potential of this actually
working out very well for Utah Athletics and the community
here that cares about the program?

Speaker 8 (01:12:47):
Yeah, it could right.

Speaker 9 (01:12:48):
One of the big advantages to partnering with an institutional investor.

Speaker 8 (01:12:53):
Like Utah has, which.

Speaker 9 (01:12:54):
Is very different from what the Big ten was considering
a couple of weeks ago, is that they're partnering with
the firm that as.

Speaker 8 (01:13:00):
Deep institutional experience.

Speaker 9 (01:13:03):
Two Circles is a is an analytics company that that's
part of this PE firms investment portfolio, and they have
better data that can help not only sell tickets, but
sell potential corporate sponsorships.

Speaker 8 (01:13:15):
Are there things.

Speaker 9 (01:13:16):
About monetizing licensing and marketing deals and new revenue that
you can learn from from F one that can be
applied to a college sports business.

Speaker 8 (01:13:25):
Yeah?

Speaker 9 (01:13:26):
Probably, And I can see the world where maybe some
of this information is more sophisticated than you were getting
from JMI or the what you are building up individually.
If you take this upfront money and invest it into
systems that can that can grow revenue over time rather
than just dumping it into athlete payroll, Yeah, there's a

(01:13:47):
there's a there's an absolutely pathway where Utah buys this
equity stake back in seven years or goes to somebody
else and they get the capital that they need to actually,
you know, make changes to the Huntsman Center, or make
some big investments without having to go to taxpayers or
without having to hit up the same nine rich people
that's fund so many other things like that.

Speaker 8 (01:14:08):
Yes, there is a.

Speaker 9 (01:14:08):
Way this could work and give you experience that you
couldn't get from selling a bond or going to the bank.

Speaker 1 (01:14:14):
On the other side, a lot of people are panicked,
and certainly when it comes to private equity, one thing
that is undeniable is they're all in business for the
same thing, and that is to get a good return
on their investment and to make money. So what are
the potential downfalls, What are the potential pitfalls, What are
the things that may not be awesome about this for
the utes.

Speaker 9 (01:14:36):
Just off the top of my head, I think the
odds are very good that prices are going to go
up for tickets, for licensed goods, for other things that
the university Athletic department is currently selling. Because you're right,
once an institutional investor gets involved, they absolutely have to
make their money back, and a lot of the ways
that utah's revenue might increase are really out of the

(01:14:59):
universe these hands, right, there's nothing that a private equity
company can do to change the television deal for the
Big twelve in the short term.

Speaker 8 (01:15:07):
Utah is not going to be able to spin up.

Speaker 9 (01:15:08):
Their own Longhord network. They don't even own the right
rights to be able to do something like that. The
relationship between a private equity company and what you might
get in like NCAA tournament units is pretty tenuous. So
you're only looking at the like the revenues you can control.
That's tickets, that's corporate sponsorships, that's game day revenues, and
it's a little bit of like sports camps for some

(01:15:30):
of these kind of secondary things, and you can absolutely
grow those things. But like right, cycles is not the
big house and Salt Lake City is.

Speaker 8 (01:15:38):
Not New York or Los Angeles or even Austin.

Speaker 9 (01:15:41):
So one of the accounter argument might be, even if
everything goes well, it's difficult to imagine a world where
the revenues go up so much that you can everybody
can be paid back correctly without hurting your core constituency,
which are non super rich Utah fans.

Speaker 8 (01:16:00):
With a lot of examples.

Speaker 9 (01:16:01):
Of private equity companies getting involved in other industries and
the end result being great for shareholders but not being
great for customers or for the existing institution, and we'll
have to see if this one ends up being different.

Speaker 1 (01:16:12):
Talk to me about your understanding of the dynamic. I mean,
University of Utah is a publicly owned institution, and they
are starting a company called Utah Brands and Entertainment, LLC.
That is a for profit operation that is now in
charge of most everything related to the athletic program. But
for a publicly owned institution, what sort of reaction should

(01:16:34):
we expect from our legislators, the folks that run the
state on the political side, because we haven't heard much
from them so far.

Speaker 8 (01:16:41):
We haven't.

Speaker 9 (01:16:43):
I actually I submitted a formal request for comment to
the governor's office.

Speaker 8 (01:16:47):
I wouldn't blame them.

Speaker 9 (01:16:48):
He doesn't want to talk to me, he wants to
talk to somebody local. And I think the specific dynamics
I would defer to a be high state expert. One
big concern, broadly is that I think it's unpredictable how
the federal government will respond to this. Right, there's a
fellow named Michael Baumgardner, who folks in this market might remember,

(01:17:10):
used to be a regent in the Washington state system.
He's a huge, huge Wazoo guy, and now he's a
Republican congressman, and he was up online yesterday saying like, Hey,
if public schools start taking private equity money for athletics,
we're going to want to revisit their tax exempt status
and we're going to want to go after some of
those revenues because you're no longer functioning as a nonprofit entity.

Speaker 8 (01:17:34):
And this is something that typically more.

Speaker 9 (01:17:36):
Liberal members of Congress threatn every couple of years, and
it's been an ongoing debate since the seventies. But if
public pushback from this deal and potentially other deals is
strong enough, yeah, I know that becomes a meaningful risk.
How does the federal government and the tax code respond.

Speaker 8 (01:17:52):
To these sort of things. I would be shocked if Utah.

Speaker 9 (01:17:57):
Made this arrangement went out the TACIT approval of the
Governor's office and from various lawmakers. But I think we
both know there's a lot of BYU fans in there,
and it would the Utah would not be the first
state to potentially mess up one school's financial plans because
rival legislators want to support their own local program.

Speaker 8 (01:18:17):
It has happened before.

Speaker 2 (01:18:19):
Yes it has.

Speaker 1 (01:18:20):
And I do want to get to the BYU element
here angle here in a moment, But I'm genuinely asking
you this to ask because I'm kind of conflicted about
what it could mean for the non revenue generating sports.
So this new entity Utah Brands and Entertainment LLC. The
Utah athletic products that are involved are basketball, football, and gymnastics.

Speaker 2 (01:18:42):
Okay, that's all. It's those three. Okay.

Speaker 1 (01:18:44):
So last year, according to what I read, Utah roughly
about seventeen million dollars in debt, and the non revenue
generating sports the expenses were basically exactly that.

Speaker 2 (01:18:56):
Okay.

Speaker 1 (01:18:56):
So based off of what we discussed as far as
the goal of private equ which is to make money.
I see kind of two different outcomes here, and I
wonder if the fact that the non revenue generating sports
are not involved in the LLC is that a good
thing for them, because is it essentially saying like, no,
you don't have to be viewed as a negative line

(01:19:18):
item now by our private equity partner because you're not
involved here and you'll continue to be bankrolled by our
revenue generating sports in this new infusion of cash. Or
are they in danger of being viewed as a negative
line item by these financial guys that don't give a
rip if UTAH is good at softball.

Speaker 8 (01:19:37):
Honestly, I think it's a really good question.

Speaker 9 (01:19:39):
And because this is the first of its kind, we
don't really have a whole lot of historical data or
institutions to.

Speaker 8 (01:19:45):
Compare UTAH to to say, all right, well.

Speaker 9 (01:19:47):
If you bring in an institutional capital investor, it means X,
Y or Z for softball. What I can say, broadly
is whether you work with an investment firm or not,
UTAH still has an obligation to comply with It's the
Big twelve, the NCAA and Title nine and sponsoring a
certain number of Olympic sports and funding those with scholarships

(01:20:08):
and equivalent support. So the idea that okay we brought
in we brought into NBAS, now we're going to get
rid of softball?

Speaker 8 (01:20:16):
That is unlikely to happen, are there?

Speaker 9 (01:20:19):
I mean, even before institutional investors, powerful institutions across the country,
you have been looking at how can I cut operational
spending from softball or soccer or tennis so we can
still say that we're offering the sport, but spend less
money on it so we can funnel that into things
that bring in more money. And is that a conversation
that might continue to happen at Utah? Sure you know
a pe or no pe. I think that's part of

(01:20:42):
the issue. But I think fans are right to be
concerned about who is going to advocate for interests other
than maximizing short term financial returns. Whether that's money that
we're spending to support other sports, whether that's what we're
doing with ticket prices, whether that's what we're doing to

(01:21:04):
what are things that are currently free that might suddenly
become not free, or things that we haven't sold before
that we might start selling some of those.

Speaker 8 (01:21:12):
Maybe great business decisions. Some of them might.

Speaker 9 (01:21:15):
Be short term cash grabs, and I think it's going
to be very important that the people that end up
serving on the board of this entity have the political
runway to say we don't need to pick up that dollar.

Speaker 8 (01:21:29):
Right now, you know what I mean?

Speaker 2 (01:21:31):
Yes, for sure.

Speaker 1 (01:21:31):
I wanted you to help Buzz understand a little bit
why college athletics seems to have such a spending problem.
Not a revenue generating problem, but such a spending problem
because Utah Athletics, like I said, you know, seventeen to
mil as far as they're deficit a year ago, Ohio State,
maybe the most powerful football program in the country, is
operating in the Red Colorado. I could keep going, and

(01:21:55):
when you look at the revenue generated, it has to
just simply because because college football and college athletics has
a spending problem. Can you help us understand why we're
in this space?

Speaker 9 (01:22:06):
Yeah, I think there's there's a couple of reasons for it,
because I would definitely agree across all of Division one
there's a significant spending problem.

Speaker 8 (01:22:14):
And part of that is because I think there.

Speaker 9 (01:22:16):
We run into problems if we look at the itemized
athletic budgets that you can that you you know that
the that the Tribune or other local places will foila
or the al feula. They're called MFRX reports, and that's
the data that shows that Utah ran the seventeen million
dollar deficit before the Colorado and everything else. And I
think it's important for people to realize that those sheets

(01:22:37):
are not meant to be, you know, profit and loss
statements in the same way that like my business or
your radio station or anyone's, like anyone's personal checking account,
is the Utah Athletic Department as of right now, is
a nonprofit entity that is not even trying to show
a profit. If you are working at Utah or for
that matter, for for BYU, or at Ohio State or

(01:22:58):
Southern Utah or anybody else, and.

Speaker 8 (01:23:00):
You're an ad regardless of what anybody.

Speaker 9 (01:23:03):
Actually says, and regardless of what's in your job description,
you are going to be judged by how successful your
teams are on the field and how many ribbons you cut,
not on your financial management necessarily or your ability to
turn a profit. Right, nobody goes, hey, we finished seventh
this year, but we paid off all of our debt.

Speaker 8 (01:23:21):
Here's a big.

Speaker 9 (01:23:22):
Plaquet in nacta. That doesn't happen because it's a nonprofit entity.
There's no profit taking, right, Like the Utah Jazz aren't
going to spend every single dollar that they make, not
just because there's a salary cap, but because the Utah
Jazz owners would like to make money, and all of
the excess revenue that they get can go back into
their pockets to.

Speaker 8 (01:23:41):
Go buy a baseball team or go do whatever what
else it is that they want to do.

Speaker 9 (01:23:44):
You know, you funnel money to college programs and college sports,
it doesn't work that way. You have an incentive to
spend every dollar you have and sometimes dollars you don't have,
because the only thing that matters is keeping your donors
engaged by winning.

Speaker 10 (01:23:58):
A lot of games.

Speaker 8 (01:24:00):
There has The optimistic.

Speaker 9 (01:24:02):
View is that once you begin to bring in more
institutional investors that they'll blow up the books for how
athletic departments have been running before and streamline and make
some of those things more efficient. And maybe that's true,
but I would caution that many of the things that
I think listeners to this show like about Utah athletics
or like about college sports are the sorts of things

(01:24:24):
that a private equity NBA might call inefficient.

Speaker 1 (01:24:27):
Yes, and that is another angle here that just can't
be overlooked as far as the potential. To your point,
there's so many things we don't know, and so I'm
going to ask you something I've been trying to uncover
to see if you have any information. Like the number
is five hundred million, but that's not all coming from
private equity. That's a combination of whatever the private equity

(01:24:49):
group is going to bring to the table and then
this other group of donors that have been allowed to
buy into it to have their own equity in the
LLC to hopefully see a return. Here's the issue, like
in the interim right now, this is an athletic department
that needs an infusion of cash immediately before the transfer
portal because as part of Kaladie Satake's new deal, he

(01:25:11):
received a hefty guarantee of nil money in the coffers
and there are already reports of BYU looking to grab
Utah football players because they don't need to wait. Do
you have any idea whether or not the infusion of
cash is immediate, is it over time?

Speaker 2 (01:25:29):
Do you have any idea what that looks like.

Speaker 9 (01:25:31):
I don't nor do I have an idea of exactly
what the percentages are for vote for for whether from
from an equity group versus outside groups or anything else.
The only understanding that I've gotten from some of your
top people, who were definitely not authorized to talk to me,
was that the school is expecting, you know, cash infusions
more than once, and it's not just going to be

(01:25:53):
here's a gigantic novelty check for four hundred and eighty
nine million dollars.

Speaker 8 (01:25:57):
Go buy yourself some linebackers.

Speaker 9 (01:25:59):
I would also say that I believe it would be
enormously misguided for UTAH to use the money that they're
going to get from this deal on player payroll.

Speaker 8 (01:26:12):
If if if you borrowed.

Speaker 9 (01:26:13):
Money from a bank or from somebody else and used
it to just pay your existing staff or to give
people raises rather than try to build it infrastructure that
will grow revenue, you are not going Your credit rating
is not going to do well, especially because trying to
buy or retain any specific college athlete is.

Speaker 8 (01:26:33):
A difficult thing, is difficult to predict. You's going to
be good.

Speaker 9 (01:26:36):
You don't want to end up spending two million dollars, uh,
you know, retaining somebody who doesn't end up cracking or
too deep or anything like this is the I would
look at this as this is money that should go towards,
you know, finalizing whatever Utah wants to do at the
Huntsman Center, right, whether that's I guess, I guess the
current plan is relocating it or you know, rebuilding it
in some capacity like that would be a.

Speaker 8 (01:26:55):
Great use of this money.

Speaker 9 (01:26:57):
Building a whole new external sales team out what other
stuff you can do and slap or a red eye
on it and sell it is a good idea.

Speaker 8 (01:27:04):
Figuring out who you got to bribe in the.

Speaker 9 (01:27:06):
State House so you're going to be allowed to sell
beer at football games, that'd be a great.

Speaker 10 (01:27:09):
Use of that money.

Speaker 9 (01:27:11):
Using it to get into a bidding war with bou
or football players. I'm not saying that Utah won't do that,
and I won't say like this was this is the
part of what's come up here with the big ten
schools here too. I think that would be a very
very bad idea.

Speaker 1 (01:27:23):
Have a lot of friends on staff up there. If
you're a Utah staffer, is this good news or are
you suddenly is there a marker on you? All of
a sudden, and you know, maybe there's a significant changes
because as you reference private equity, the playbook is, hey,
here's the money. Oh, by the way, we're here tomorrow
and we are looking at every piece of your operation.

Speaker 2 (01:27:44):
How should this be met by Utah athletic staffers?

Speaker 9 (01:27:47):
I think it kind of depends on what they do, right, Like,
if you're a coach, if you're if you're an operations person,
if you're a dobo like I don't think that that's
something that you can outsource.

Speaker 8 (01:27:56):
I think that's I think that's fine if you're working.

Speaker 9 (01:27:59):
In what they call like athletic development, if you're on
the fundraising department, you know, my understanding is that a
lot of the fundraising is ARM is still going to
stay under the University Athletic Department rather than moving to
this other LC.

Speaker 8 (01:28:13):
And you might be fine too. I don't know if
that strategy changes that much.

Speaker 9 (01:28:17):
If you're somebody who's working really closely with JMI, if
you're involved in corporate sponsorships, group ticket sales, some of
those things.

Speaker 8 (01:28:24):
I'm not saying you're going.

Speaker 9 (01:28:25):
To get laid off, but like, could your job significantly change,
your boss, change your A lot of your day to day.

Speaker 10 (01:28:31):
Yeah, that could change too.

Speaker 8 (01:28:33):
Like I wouldn't be expecting the under new management, which.

Speaker 9 (01:28:37):
Is still going to be controlled by university employees.

Speaker 8 (01:28:41):
I'm not expecting a blood bath on day one or anything.

Speaker 9 (01:28:44):
But if you're in a revenue generating role at the
university Athletic Department, I would be concerned the same way
that i'd be concerned in any other job if your
boss is.

Speaker 8 (01:28:54):
Changing or your boss's boss is changing.

Speaker 1 (01:28:56):
Since you and I last spoke, Man, the last time
we spoke, we talked about the possibility of Kilanie taking
the Penn State job, and then two days later the
news broke that he was staying in Provo. And look,
I mean, we've been told for years that the church
doesn't get involved in such things, and now the reports
are that, And I want to be clear, so everybody
calms down. I know it's not tithing money. Don't text me,

(01:29:17):
don't send an email. But you know, at the end
of the day, there was a combination of a bunch
of things, including our guy Cookie bro that got off
the sideline. Okay, he was ready to get involved, and
it ends up with Klannie Stain. The reports are he's
now the second highest bid coach in the Big twelve
to Dion Jay Hill, Aaron Roderick coordinator's assistants get massive

(01:29:38):
raises and then in addition, nil guarantees that he did
not have prior to your reaction to how that story
all kind of unfolded.

Speaker 9 (01:29:48):
Well, the one thing I would say, as I would
be completely blown away or shocked if any of those
nil guarantees are put into writing. I've been filing FOYLEA
and I've got the new football contracts for like eight
other guys during this cycle. None of them reference nil.
None of them reference house settlement stuff. And the reason

(01:30:08):
for that is because if you're guaranteeing money over the cap,
that's breaking the rules.

Speaker 8 (01:30:13):
No one's going to put that in writing.

Speaker 9 (01:30:15):
Because if that memo gets in front of the CSC
or whoever, there could potentially be big fines.

Speaker 8 (01:30:20):
So to the extent that that agreement does or done,
that does not exist.

Speaker 9 (01:30:24):
I think that would be a handshake understanding between big
Cookie and big MLM and big Wellness and whoever are
the other big industries that are supporting BAU Athletics right
now right, I am not super surprised that other donors
decided to get involved it's going to take some getting

(01:30:46):
used to for me.

Speaker 8 (01:30:46):
And we've talked about this a lot before.

Speaker 9 (01:30:48):
To hear about a BYU athletics employee making over nine
million dollars, not that clan.

Speaker 8 (01:30:52):
He doesn't deserve it. I think he's a very good football.

Speaker 9 (01:30:54):
Coach and was hilariously underpaid around the four million mark.

Speaker 8 (01:31:00):
Where he stands compared to his peers in in this
in this industry. We've talked about it before too.

Speaker 9 (01:31:06):
It's it's gonna it will be challenging to try and
say that we don't we don't outbid people or you know,
we we don't want this to be a transactional experience.

Speaker 8 (01:31:14):
We're not playing the same game everybody else is. When
I think at this.

Speaker 9 (01:31:17):
Point it's pretty clear that you are. And that's not me,
you know, casting dispersions at ce S or b YU
or anything. It's just like if you're if you're going
to be a powerful institution right now, you can't pretend
to Princeton like you are. Whether it's it's for a
coach or an associate, a d or a graphic designer
or a backup defensive tackle. There will be times when
you are going to be the high bidder. That's okay,

(01:31:38):
because this isn't the Kurritlin Safety Society.

Speaker 8 (01:31:41):
This is this is capitalism.

Speaker 9 (01:31:43):
We have to we have we have to participate in
that world, uh to get people to work for any
for everything.

Speaker 8 (01:31:49):
I I will be. I will be.

Speaker 9 (01:31:51):
I'm happy for him, and I'm happy for fans of
that program because I know what Kalani means to not
just the school, but to a lot of fans here
as something beyond just.

Speaker 8 (01:32:02):
Good at football.

Speaker 10 (01:32:02):
And I also, I think we both know if you
had left, and if Jay Hill had gone with them,
by you.

Speaker 9 (01:32:06):
Would have been completely screwed because it's it's not only
there's a huge line of coaches that are.

Speaker 8 (01:32:10):
That are are able.

Speaker 9 (01:32:12):
To take that job given the current requirement.

Speaker 1 (01:32:15):
Are are you know, based off of your knowledge of
how BYU operates in the LDS Church and their economic policies,
are are you a little bit surprised that they have
decided that their new approach is to pay their football
and basketball coach not just market value, but among the
highest paid coaches in their leagues.

Speaker 8 (01:32:34):
I am you know?

Speaker 9 (01:32:35):
Am I surprised just given how I remember BYU and
the Church operating in the nineties and twenty and twenty tens. Yeah,
but also this industry in college sports is super different
than what it was then too, and all institutions end
up evolving compared to where things are here too. I'm
sure that you know, somebody from the churchill will give

(01:32:56):
an interviews sometime a little bit later, and and you know,
they take great pains to point out that the money
to support BYU's roster and coaching staff is coming from donors,
that it is not coming from you know, Guatemalan widow's
mite or anything to support this.

Speaker 10 (01:33:14):
And that's it.

Speaker 9 (01:33:16):
I don't envy anybody in their public relations department because
I can tell you outside of Utah, outside in the
rest of this country. And I know this because I've
been fielding a bunch of textan calls from national reporters
like can you explain this weird Mormon thing to me?
It's that regular people don't see that difference. They just
know this church has a whole lot of money. We
all read the stories about ensign peaks, and now suddenly

(01:33:38):
BYU's paying a lot of money and you can give
as many interviews as you want to the desert at News.
Regular people are not going to the regular people are
going to follow the line and assume that it's coming
from the church, even though you and I know that
it isn't.

Speaker 8 (01:33:53):
And that's I think.

Speaker 9 (01:33:55):
That's the difficult thing for the PR department because I
think we both know it's not like the.

Speaker 8 (01:33:58):
Church is going to say here, I'll prove it. Let
me open my books like that. We both know that's
not gonna happen.

Speaker 2 (01:34:03):
No, No, that will never happen.

Speaker 1 (01:34:06):
Last thing that I'll set you loose, and let's help
people find the newsletter because I'm sure it's going to
be met with great interest out here. Look, you know
the BYU has the church is the ultimate backer. And
let's be clear. We know that it's not tithing money.
I know I have to say that every time I
bring it up. But they also have a bunch of powerful,

(01:34:26):
very rich donors and boosters that are very fine donating
millions and millions of dollars to back up the Athletic
Department and therefore, in their mind, further the message of
a church they believe in. So they don't need private equity.
Texas Tech has oil money. If Utah didn't do this, like,

(01:34:46):
what would the result be. It feels like this is
Utah's answer to sec big ten, bigger TV payouts, Big twelve,
Texas tech oil money BYU with their financial model. It
kind of feels it feels like the only route.

Speaker 2 (01:35:00):
Is that fair to say?

Speaker 9 (01:35:02):
I I don't think I personally agree, Okay, And this
is the sort of thing I would love for the
university and potentially government officials to talk about here, because
typically if you are a public university, then you need
a bunch of money because you need to build a
new basketball arena, you want to create a new mixed

(01:35:23):
use real estate development and like athletic district where you
can control, you know, some of some of the land
if you want to go, you know, do X, Y
or Z, you go. You sell bonds, you can borrow
money at really low interest rates.

Speaker 8 (01:35:38):
You can in some states you could even ask for.

Speaker 9 (01:35:41):
A direct government appropriation, like it's if Wyoming needs a
new football stadium or something, Wyoming taxpayers help front that.

Speaker 8 (01:35:47):
And I don't even think that's necessarily an unreasonable ask.
There's there's lots of ways that.

Speaker 9 (01:35:51):
You can you can get money without giving up equity
in a way that like Boston College can't do those things.
So I would be very interested, and it's my knowledge
no one's really talked about this yet about why this
model makes sense rather than everything else that was available
to them.

Speaker 8 (01:36:09):
The only thing I could.

Speaker 9 (01:36:09):
Think of is you partner with a private equity company
and then you get all the big brains behind F
one Racing and these other data analytics companies.

Speaker 10 (01:36:17):
You go to the bank, you don't get anything. They're
stuck with the same guys.

Speaker 8 (01:36:21):
I understand why Utah.

Speaker 9 (01:36:23):
In particular, would think if we don't have loyal money
and we don't have Larry.

Speaker 8 (01:36:28):
Ellison, you know, like like Michigan does, and we're.

Speaker 9 (01:36:31):
In this truck stop conference and we don't get the
gigantic television deal, we have to swing and do something crazy.
And I don't mind emitting this on the air. Many
of the other schools that I'm aware of that have
had these kind of conversations, because.

Speaker 8 (01:36:43):
It's not just Utah. Most of them have been in
the Big twelve or the ACC These schools that.

Speaker 9 (01:36:49):
I think are on a similar boat where their ambitions
don't line up.

Speaker 8 (01:36:51):
With their current television deals. But there's always other ways.

Speaker 9 (01:36:56):
It's probably not realistic to expect donors alone to do
this sort of thing. Because there's only so many rich
Utah fans.

Speaker 8 (01:37:01):
But I would I would really.

Speaker 9 (01:37:03):
Like to hear the school side of the story about
why other financial mechanisms weren't appropriate here.

Speaker 1 (01:37:09):
I think there's any shot Utah gets a Big Ten
invite before it toutch you loose man.

Speaker 9 (01:37:14):
This this is is funny every time this kind of
thing comes up when I go check Twitter and it's
you know, I can just look at my mentioned as
the sixteen Utah fans saying like, yeah, they're doing this
to join the Big Ten, and.

Speaker 8 (01:37:22):
Like that's not how it works, guys, Like.

Speaker 9 (01:37:26):
If we think about this in our lifetime, because I
think it might be a little bit older than me,
but probably not by much. Like who has been a
more relevant important athletic program, UCLA or Utah? Like it's
it's not close, it's Utah by mile and they I
can tell you because I saw some of the documents
when the Big Time was financially modeling their last round
of expansion, Utah wasn't even on it. I really struggle

(01:37:50):
to imagine a world, or even with five hundred million
dollars that you can buy or build enough things that
would make Utah a financially additive team to how the
Big Tennis is currently structured when Florida State right now
probably isn't. I wish that I could tell people that

(01:38:11):
this was America and this was a meritocracy and you
could just win your way in, baby, But that's not
how Rutgers got that spot. That's not how UCLA or
Washington got that spot. This is America, and that is
not really a meritocracy. It's who your friends were in
nineteen twenty and Utah made the wrong friends back said.

Speaker 2 (01:38:28):
Well, well said, good stuff.

Speaker 1 (01:38:30):
Hey, I'm sure we have a lot of listeners eager
to check out the newsletter.

Speaker 2 (01:38:33):
So where can they go find it? Matt?

Speaker 9 (01:38:36):
If you are interested in the sort of thing friends,
you can find it at extra Points mb dot com,
or you can find me online at Matt Brown EP
or Matt Brown I'm Blue Sky.

Speaker 2 (01:38:46):
Great stuff, sir, Appreciate the time, Be well with chat soon.

Speaker 8 (01:38:49):
Okay, of course, do what my friends think.

Speaker 1 (01:38:52):
Matt Brown. I'm telling you extra Points. I use it
to show prep he's as smart as anyone around with
his stuff. We'll catch a break, We're going to continue
this conversation, all right, very special segment coming up for
YouTube viewers, you should tune in to see Trevor Riley.

Speaker 2 (01:39:07):
Oh, he took the hat off.

Speaker 1 (01:39:08):
But he does have the sunglasses on. Let's make sure
all the microphones are on. Trevor Riley, how are you, buddy?

Speaker 2 (01:39:14):
Doing great? Great to see you.

Speaker 1 (01:39:16):
And the best looking man in the bunch is actually
dressed very nicely in a jacket and a shirt.

Speaker 2 (01:39:22):
He is my younger brother. He is much smarter than
I am.

Speaker 1 (01:39:25):
I like to brag that I'm the least intelligent Checked
child or sibling.

Speaker 2 (01:39:30):
Andrew Checkets, how are you, buddy, Spencer.

Speaker 4 (01:39:32):
Good to be here.

Speaker 2 (01:39:32):
Hey, it's great to see you.

Speaker 1 (01:39:33):
So Andrew is with the Sino short check it's fund
And how long have you made your way in.

Speaker 2 (01:39:38):
The world of private equity?

Speaker 11 (01:39:40):
For the last ten years, I as a consultant in
five directly in private equity through bank Capital and KKR.

Speaker 1 (01:39:46):
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 to
the inevitability of private equity permeating through college athletics for
maybe five years when nil became a reality, the transferport

(01:40:09):
became a reality, You help us understand why this would
be 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 5 (01:40:22):
Sure.

Speaker 8 (01:40:22):
Yeah.

Speaker 11 (01:40:23):
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.

(01:40:44):
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 in North America until the last five or
six years when the Pro League started to see their

(01:41:05):
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

(01:41:25):
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

(01:41:47):
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 can and you to perform.
Teams continue to appreciate in value, and so any smart
investor is going to look at sports and say, where's

(01:42:08):
the 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, et cetera. 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

(01:42:31):
that I can predict and that will continue to grow,
and that's really attractive.

Speaker 1 (01:42:36):
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

(01:42:58):
ultimately going to be a good thing for the concer
tumer 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.

Speaker 2 (01:43:18):
We don't know about.

Speaker 1 (01:43:19):
But when you reference, like, hey, no, 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 11 (01:43:29):
Sure so, there are a lot of stories out there
of bad private equity investment where they have come in
and they have cut costs, 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

(01:43:50):
private equity company has come in and provided capital or
capability to a company that didn't have that before and
helped that company grow and achieve success that they wouldn't
have otherwise. So, if I'm a fan of the University
of Utah, I am looking at this from that lens,

(01:44:11):
which is 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,

(01:44:32):
which will of course drive revenue, But we'll do it
in the right way. So there's right ways to grow revenue,
and then there's the shortcuts.

Speaker 2 (01:44:40):
I can't speak to this.

Speaker 11 (01:44:41):
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
that could work out in their favor in a really
positive way.

Speaker 1 (01:44:58):
Before we get Trevor's dot as an alum who is
still very connected to the program and passionate about what's
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

(01:45:19):
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 Randall's one of those. I don't know.

Speaker 2 (01:45:34):
I hope it is because the tailor's really bright.

Speaker 1 (01:45:36):
And then the seventh seat that's out there will be
filled by what All characterized as a local businessman who
is invested into this fund. You're gonna hear the usual names.
They're on the building. 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

(01:45:58):
indicate that the percentages are heavily in the favor of
the Utah Athletic Department.

Speaker 11 (01:46:03):
Sure, and when you're a private equity group. If you
have control, you can do whatever you want, right, 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.

(01:46:27):
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

(01:46:48):
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 are good for the University of Utah.

Speaker 1 (01:47:05):
Well, that's a relief and folks should know certainly take
that as a good sign. All right, travel, Let's bring
in the hammer now, 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 announce yesterday.

Speaker 12 (01:47:27):
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

(01:47:50):
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 think I think we got those two guys,
and I think we got these two freshmen. Are fun
are getting low and you and I talked about by
us numbers. You can speak more to that what they
have in 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. This

(01:48:10):
is a partner for the long term. The deals I've
done yet we got January second. That's supportal yep, 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 11 (01:48:21):
Its Yeah, I don't know if it's a good deal
or not because I don't know the details.

Speaker 2 (01:48:24):
I'm gonna ask you. I think you're going to tell there.

Speaker 11 (01:48:26):
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.

(01:48:48):
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 this is
a bad I apologize.

Speaker 12 (01:49:00):
I just mean in general, right, you see it as
a positive, right, So I'm going to take your word
for it. Think you've forgotten more about this stuff than
I know. Right, My thing is is I know what's
coming for the salary cap?

Speaker 5 (01:49:10):
Right?

Speaker 2 (01:49:11):
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 and by the way, that's every
student athlete.

Speaker 1 (01:49:20):
You decide how you yes, and most schools will give
the majority of that to the football.

Speaker 2 (01:49:24):
We're going to be around sixteen or seventeen million and.

Speaker 1 (01:49:26):
That so, just to be clear, sixteen or seventeen mili
is that part of the twenty point five cap? That's
what salik? Okay, do you have any knowledge of what
the nil copper looks like? For you talk 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

(01:49:48):
want to be the Oakland A's Sacramento ays wait, no
Vegas as we want to be probably the Saint Louis Cardinals. Okay,
we'll probably not gonna be the Dodgers. 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 (01:50:07):
And that is to come right now.

Speaker 12 (01:50:08):
We need it before I need I needed. We needed
December thirty first. Yeah, the port opens January second. Okay,
January first is a holiday. We don't need it in cash.
We need a promisory. No, we're looking for a partner.

Speaker 2 (01:50:18):
Okay.

Speaker 12 (01:50:18):
We talked about that seventh board seat. I work with
the Utah Players Association. Okay, colected bargaining. We've already started
with the school. We've met with them multiple times. They'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 can find a partner two of them. Yes,
and so every year if the player Association, we're putting

(01:50:40):
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 there's a guy right now
that you know you and I know he's struggling, right
we he needs a place to go, man, and so
we're working on that. But we need some We need
to come together as a school. And I think that's

(01:51:02):
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.

Speaker 2 (01:51:17):
Okay, Bau ask how much spence? How much do you think?

Speaker 12 (01:51:20):
And they're gonna have on top of that, on top
everybody of the twenty and a half that they are allocated.

Speaker 1 (01:51:23):
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.

Speaker 2 (01:51:38):
Then I need nil guarantees.

Speaker 1 (01:51:40):
And the report's already got about fifteen million dollars on
top of what they paid last year, so that would
be probably north of twenty million. And that's nil. That's
not the twenty point five that the school can distribute
however they want.

Speaker 12 (01:51:52):
We're at close to zero, so I means we have
sixteen If I do those numbers right, that's somewhere over
forty million dollars or close to it.

Speaker 1 (01:51:58):
Yeah, I Toltal isn't where the Utah's ANIL number is
close to zero.

Speaker 12 (01:52:02):
It's close to zero. Now, remember we 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.
Hey what times the game mat?

Speaker 5 (01:52:15):
I'll be there.

Speaker 12 (01:52:16):
Here's my team. So we figured that out. Now, right now,
we need to put all our efforts everybody in solving
this issue. We are being outspent almost over two to one.
The guys down south, they're going to treat us like
the Salt Lake Bees, right, they're the angels.

Speaker 2 (01:52:30):
You can put that together. They're going to start.

Speaker 12 (01:52:32):
They already picked off Tonnebosa last year. If we don't
get up to that level, right, we're just 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 six ers
and you're doing the process.

Speaker 8 (01:52:43):
Right.

Speaker 2 (01:52:44):
We don't want to be that.

Speaker 12 (01:52:45):
We're thirteenth in the country, right, we're right on the door,
so we need to double down.

Speaker 2 (01:52:50):
Gosh, dang it, I said, I'm concerned.

Speaker 12 (01:52:52):
I want to ask you when you hear this right,
as a private equator, does that give you any pause
for concern?

Speaker 11 (01:52:58):
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

(01:53:20):
plus million dollars and that does not include probably what
they spent on nil.

Speaker 2 (01:53:25):
Right, And so.

Speaker 11 (01:53:28):
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

(01:53:52):
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't 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

(01:54:16):
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 (01:54:28):
And to your point, look, college athletics does not have
a revenue generating problem.

Speaker 2 (01:54:33):
It has a spending problem.

Speaker 1 (01:54:35):
Because the numbers for Utah Athletics last year they made
one hundred and nine million dollars.

Speaker 2 (01:54:40):
That was a revenue.

Speaker 1 (01:54:41):
Any business that makes one hundred and 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

(01:55:02):
and basketball. And by the way, I was told 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. I mean, those are the types

(01:55:25):
of decisions that we're going to have to look out for.

Speaker 11 (01:55:27):
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 in what happens
to the other sports. And when I talk about the
culture clash, that's exactly what I'm referencing. College athletics has

(01:55:50):
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

(01:56:13):
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 (01:56:25):
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, but 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

(01:56:46):
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 the inevitability of this coming.
The leadership in college athletics has been so asleep at

(01:57:09):
the wheel.

Speaker 7 (01:57:09):
Ed O.

Speaker 1 (01:57:09):
Bannon filed his lawsuit in two thousand and eight. You've
had seventeen years to prepare for this. 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

(01:57:31):
body you collectively bargain and basically it's the NFL.

Speaker 2 (01:57:35):
Are we moving in that direction? That's sure what it
feels like.

Speaker 11 (01:57:38):
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 all

(01:58:00):
almost 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

(01:58:21):
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.

Speaker 1 (01:58:42):
On a Wednesday, it's like sixty degrees outside. I hope
you're having a fantastic week, but excited to welcome in
our next guest. I feel like I used to do
a lot of radio with him, but it's been quite
some time. He is a former Utah tied end with
a lot of very interesting takes on the current landscape
of not just Utah but collegiate athletics. An honor to

(01:59:02):
welcome in Jake Murphy on a Wednesday afternoon. Jake, how
you been man?

Speaker 4 (01:59:07):
Hey doing good man? Yeah, it's been a while. I'm uh,
I'm glad we got the chance.

Speaker 1 (01:59:11):
To talk now and not to catch you off guard,
but I will turn some time over the gentleman sitting
right across from me, and.

Speaker 2 (01:59:16):
Go ahead, Jake.

Speaker 12 (01:59:18):
Do you remember Dodger Stadium, Cincinnati Reads, Summer twenty thirteen.

Speaker 4 (01:59:23):
It's got to be Trevor right.

Speaker 1 (01:59:24):
Well?

Speaker 2 (01:59:24):
That sure is how you doing?

Speaker 4 (01:59:27):
No way, good man. It's good to hear from you.
I haven't heard from I haven't heard from you in
too long. I'm a little bit disappointed in myself and
in you, so we'll have to catch up even more.

Speaker 2 (01:59:37):
Are you living in Georgia?

Speaker 4 (01:59:39):
Yeah, I'm living in Georgia. I got I gotta you know,
we we got to change the scenery during COVID, and yeah,
we haven't moved back, so obviously we haven't moved back.
So we're uh, we're living in an sec country. It
means more more, you know, Trevor, I was down there Mississippi.

Speaker 2 (01:59:53):
I know what it's about. I need to come out
and see us. I should I come out and visit you?

Speaker 8 (01:59:57):
Yeah?

Speaker 4 (01:59:57):
Come out, stay with me.

Speaker 2 (01:59:58):
Come on, let's go to a Braves game. Does that
sound That's great?

Speaker 4 (02:00:01):
As long as you're still not wearing socks with your
shoes and doing all that that, we're good.

Speaker 2 (02:00:06):
I just wear no shoes. How's that?

Speaker 12 (02:00:07):
But we got to get Dale Murphy in the Hall
of Fame. Okay, so we got to go out at
about that to get that.

Speaker 4 (02:00:12):
Rid you run the campaign for that, and I bet
he gets it.

Speaker 2 (02:00:16):
I'm going to start it right here, right now.

Speaker 12 (02:00:17):
Dale Murphy gotta get two time MVP Spence, come on down.

Speaker 2 (02:00:21):
You don't have to convince me.

Speaker 1 (02:00:22):
I've been talking about this for a decade, so all right, Jake, Look,
this has been a really interesting twenty four hour news cycle,
and we've been discussing it really at every single angle.
And I hate to say it, but for anybody out
there that's still grasping on to the final level of
sanctity and purity of amateurism, well sorry, that ended a

(02:00:43):
long time ago. It was inevitable that private equity was
going to permeate its way into collegiate athletics at some point.
I didn't think Utah would be the first to consummate
a deal like this, but they are.

Speaker 2 (02:00:55):
What's your reaction, how do you think this is going
to go?

Speaker 4 (02:00:59):
I mean, does anyone really know? I think that's the
main thing, that's the main reaction, and the main answer
I think just like anything online is, you know, right
when something comes out, we all become experts of it,
myself included, at least we think we are. So a
lot of knee jerk reactions. I think anytime you involve
private equity and in really in anything, there's potential downside,

(02:01:21):
but there's also extreme potential upside. So to expect that
you know, the Utah Athletic Department and what's their names, Yeah,
So to expect that, you know, this is their first
go around and no one here is doing their homework
would be foolish. So obviously, when you get to this

(02:01:45):
level of money and of funding, people have been around
and seen a few things, so there's there. They analyze
the potential downside and the potential upside, and obviously both
sides felt like the risk was worth the reward, so
you just got to roll with it. I don't think
we know how it's going to turn out, right. We
know there's risk and we know there's potential reward, and

(02:02:06):
that's really the only answer I can think of.

Speaker 12 (02:02:08):
I got to tell you, Jake, I'm concerned about the
nil We got about zero dollars, so we talked numbers
before you came on Spence enlightened us a little bit.
They're going to have around thirty five to forty million
somewhere around there, including TV revenue, revenue, your money, we
have sixteen million. As a former ute and as an
insider of sorts, you're in the media. Now, what do
you think about that?

Speaker 8 (02:02:28):
Man?

Speaker 4 (02:02:29):
First impression, it's not surprising, honestly. And yeah, I've known
for a few years now that from the NIL space
that that UTAH wasn't probably from the same types of
sources you have, for both of you have, that Utah
wasn't leading the way in NIL. And I think it
makes sense when you look at the makeup of the

(02:02:50):
donors of UTAH. While you know they're all great obviously
giving back their own personal money, what you what you
really and and I hate to always bring them up,
but you look at BYU some of their some of
their donors and boosters who happen to have young money,
right they maybe started a tech company and they might
have a little bit more young passion for BYU going

(02:03:14):
far in the NIL space. You kind of need that energy,
I guess you could say, in the NIL space. And
it's not just a UTAH, It's had a lot of
really you know, prominent universities where donors are just getting tired. Honestly,
it's you know, I saw that article about Troy Aikman
yesterday who gave a bunch of money to UCLA. He

(02:03:35):
didn't mention the player, but I mean most people figured
it was Dante Moore, who's at Oregon now, and Troy
Aikman basically was like, yeah, I'm not doing that anymore.
He just transferred a year later and he didn't even
say thanks. So I'm not saying that's happening at Utah,
but I'm saying when you look at the makeup and
the history of Utah and the families that are involved,
while they're doing a really, really amazing job, and I

(02:03:58):
can't say that I would donate any money to any
if I was super rich. It's not like I'm the
better person here saying I would give a bunch of
money and do all that. But when you look at
their interests, it might not solely be in football, where
some other schools, their boosters and their alumni are solely
interested in football, and obviously that bodes well for the
football team. So it's not surprising. It's you know, I

(02:04:22):
figure to move like this was coming on the grand
scheme of things, and I'm going to be interested to
see the domino effect.

Speaker 2 (02:04:29):
So jake a few things.

Speaker 1 (02:04:32):
This in a way feels like a necessity for Utah
to not just survive, but keep up with other programs
that simply have other resources and sources of revenue the
Utah doesn't have. And you reference BYU they have like
the ultimate private equity firm that's just called the LDS Church.
And I understand that the players and coaches are not

(02:04:54):
paid by tithing money. I get it, but we heard
a lot of reports about the LDS Church and they're
involved in keeping Kilani after Penn State came calling. They
also have a lot of very rich donors and boosters
who believe in the message of the LDS Church and
therefore are fine donating to the athletic department because they
believe it's helping further message that they love and believe in.

(02:05:17):
Texas Tech has Cody Campbell and oil money, Michigan has
a twenty billion dollar endowment. In a way, this felt
like a necessity. I don't know what other avenue Utah
football would have had. This is them clearly saying we
not only want to compete with the big ten of
the SEC. We have to compete with the school that's
in our very backyard.

Speaker 4 (02:05:37):
Yeah, one hundred percent. It's I wouldn't say it's a
cry for help. I would say it's it's a potential
smart strategic move in strategy in reaction to what other
schools have. I mean, look, the bottom line is every
school has different resources at their expense, and that's tons

(02:05:58):
of personalities going to those resources, tons of business decisions,
tons of things that we don't even know that factor
into what type of money a school can get, you know,
plays a part in all this. So when you look
at what Utah did, I it's a little too early
for me to say, hey, look this is the correct move.
But I also wonder is this one of the only

(02:06:20):
moves I was left? And I got to think it
was right. I don't think you dive into this, you know,
this type of structure without that being you know, one
of the one of the only, if not the only
move left. And I think it's going to be interesting.
I think, you know, not to sound like a conspiracy theorist,
but I think you had to make a move like

(02:06:40):
this with the future of college football, And I've talked
a little bit about this on on Twitter or x
or whatever you want to call it, and I think
I think Utah and a lot of these programs are
really really needing to survive and wanting to survive and
thrive because in five to ten years, is it going

(02:07:01):
to be a two conference league with you know, all
the top teams are in that league and it's just
a semi pro league that you know it eventually becomes,
And you don't want to be left in the dust.
You know, there's schools, I don't know, Rutgers, some other
random like think of random schools that are are big names,
big enough names they might make a run every once

(02:07:21):
in a while, but if that type of structure comes about,
you don't want to get left in the dust. And
if Utah was not doing well financially and didn't have
the money to buy rosters that they needed to, there's
a chance they could have got left. So I think
it's you know, to put it, frank, I think this
was probably the only move left and I think if

(02:07:41):
that's the case, then this was a smart move.

Speaker 2 (02:07:43):
We owe forty million, so not a big deal. Most
big teams are in deficits.

Speaker 12 (02:07:47):
Ohio State ran one that still is not you know,
to your point, I'm not concerned about so much the
healthiness of the university financially, don't care. I want to
see what comes out on Saturday. I'm interested in great players,
great team teams, and I love the school, I love
athletic department, all that stuff. But my concern, fully and
forward is always going to be how are we spending

(02:08:08):
versus the top teams in the country. Where are we
at and what's the plan to overcome it? If we
have an issue, I want to ask you again, I
have to ask you can double down. Are you concerned
as a fan? As a ute you know what's coming
if we don't get money. Man, I was talking to
Spence the Oakland A's you know, I scale this thing.

Speaker 2 (02:08:24):
I don't. I don't see it. Are you concerned?

Speaker 4 (02:08:27):
Well, not with this new influx of cash.

Speaker 12 (02:08:30):
Yeah, we got a spending cap, so we can only
spend twenty million. That's every school in the country. All
the extra money Yeah, has to come from private people.

Speaker 4 (02:08:38):
Yeah, in the way that I understand it, and the
bus that you can tell me if I'm wrong. You
have the cap, but you have the ability to generate
revenue or sorry, generate money for players in other ways,
is that right?

Speaker 2 (02:08:51):
That is correct?

Speaker 4 (02:08:52):
Yes, through brand deals, through creative strategic ways. And I
think that's a little bit of the play here too,
is Yeah, you have a cat, but now you have
this influx of cash and influx of operational and strategic
and business minded folks who hopefully can come in and
land brand deals for players that actually generates even more revenue, right.

(02:09:15):
And I know some of that's in the works, you know,
I'll text you guys off air for my critical sources there.
But I know that's one area that Utah Athletics has
not been thriving in is the brand deals. If you
look at I don't know, I think we have Raisin
tains with Dan Pier and a few other random brand
deals here and there. But if you look at what

(02:09:36):
other schools are doing, it's kind of interesting. And I
know at Utah they're actually working on getting this and
it's kind of implemented, but there's essentially full sales forces
working on getting brand deals for players. And I think
if you look at what Otro's hopefully going to do,
they're going to start implementing these business practices to generate
money for players in other ways. Because you had to

(02:09:58):
travel to your point, You've got to find other ways
to get guys more money. And that's just the landscape
that we're in and Utah needs to figure that out.
And I don't know who's going to figure it out exactly,
but hopefully this means, you know, maybe they can make
a few crucial hires and bring on crucial business minded
folks who can get players even more money outside of

(02:10:20):
a CAP.

Speaker 2 (02:10:20):
We should hire you.

Speaker 4 (02:10:22):
Yeah, well, I've put out there on Twitter. I'll come
to it for free.

Speaker 12 (02:10:25):
Hey, Mark, we are Jake Murphy, son of Dale Murphy. Right,
there's some good lineage there. I think we should hire
Jake Murphy to be in charge of branding and cap circumvention.
Jake Murphy, I'll.

Speaker 4 (02:10:36):
Trevor if you I'll personally hand him my resume and
we can get it going. No, but I mean all
jokes aside. I've you know, I've looked in this space.
I've gone as far as like comparing who from the
top team, top teams throughout the country and nil, what
does their staff look like compared to Utah's. And there's
just a few roles and people at Utah that they

(02:10:57):
don't currently have that I think could. I'm sure it's coming.
I think it's going to be coming, and you're going
to be seeing people working at the University of Utah
who are trying to land brand deals, massive brand deals
for players. So I'm optimistic there. I don't know if
it's happening as well as it could be right now,
but I think it's going to get better.

Speaker 1 (02:11:18):
And a couple of things that I just continue to
want to bring off to just dispel some notions out here.

Speaker 2 (02:11:24):
You know, look, this is not a sale.

Speaker 1 (02:11:27):
It is a spinoff to an entity that is called
Utah Brands and Entertainment LLC. As a public institution, you're
not allowed to sell a portion of something that's owned
by the public. And look, every school was tasked with
the following challenge. Okay, number one back damages because of
the NCAA and the conferences agreeing to pay about two

(02:11:47):
point eight billion dollars over ten years to former athletes
who were denied nil opportunities. The NCAA is covering some
of this, but the schools are on the hook for
a lot of it. As Trevor reference, and this is
probably the most immediate thing, that's the most like pressing
in to handle it is the cap of roughly twenty
point five million to twenty two million per school. That's
about twenty two percent of your average revenue that goes

(02:12:10):
directly to athletes. Now that's to all athletes. That's not
only to football players, but most schools will allocate seventy
five to eighty percent of that money to the football players.
And then, finally, this is one that isn't talked about
very much. Under the House VNCAA settlement, we've eliminated scholarship
limits in favor of roster limits. So football programs can

(02:12:31):
now offer scholarships to the entire one hundred and five
man roster.

Speaker 2 (02:12:35):
Okay.

Speaker 1 (02:12:36):
Back in the day, you had walk ons and essentially
that was free labor. Okay, So if you want to
keep up with the biggest of the big dogs in
college football, you have to find money for basically one
hundred and five players if you want to have depth. Now,
of course we're grown ups and the majority of the
money will go to the Devin Dan Piers and the
Spencer Fonos. But we've seen what has happened to programs

(02:12:58):
that haven't been able to find the cap to pay
a lot of players. The depth isn't there the way
it used to be. And Trev you and I talked
about this. I mean, and it's not just Utah like
Lane Kiffen talked about this in the SEC because of
the dynamic of back in the day, if Nick Saban
had a five star defensive end get hurt, he'd be like, hey,
go dust off the other one that's on the sideline.

(02:13:19):
But now if you're a five star, sit to me
hide another player. The coach from Ohio Stadio call you
and say, wait, you'll come play for me.

Speaker 2 (02:13:27):
I'll pay you two mill You don't have to sit
on the sideline.

Speaker 1 (02:13:29):
So all of that is to say, ultimately, let's be clear,
the deal is not a sale.

Speaker 2 (02:13:34):
It is a spin off.

Speaker 1 (02:13:35):
They still maintain control and Jake I ultimately believe this
was kind of the only route that they had at
their disposal to basically come back to ground zero based
off of the three dynamics I just pointed out that
puts you in a much different cost of doing business
with an outdated revenue model.

Speaker 8 (02:13:54):
Hundred percent.

Speaker 4 (02:13:55):
Yeah, the cards were stacked against Utah almost from the
very beginning. And I don't want to sound like I
was predicting this, but when NIL came out and I
had all the I work in tech right now, I
work in software, So just knowing the entire landscape of
BYU and the folks that they have and who are alumni,
right when NIL kind of got the green light, it

(02:14:16):
was like instantly, Okay, this is great for BYU. And
it took a little bit of time for them to
adopt it, and they you know, had players doing brand
deals with like built bar and like some of these
random little things. But then they figured it out and
it's both it's it's gone really well. I think by
you just had their highest recruiting class ever, but for
Utah unfortunately, and there's money coming in, but the cards

(02:14:38):
were stacked against them and Spence you just laid out
all the different ways that it's all the different hurdles
that they've had and unless you have crazy amounts of
cash coming in, you had to do something. That's that's
why I am optimistic. And when I hear it, yeah,
there's there's certain things. You know, when private equity took
over Cafe Rio, all the you know, the pork you

(02:14:59):
think gets my meat and your burrito and little things
like that happen when private equity takes over. But the
private equity they still need to return, right, They still
need a strategy to actually get a return, and to
get a return, there still needs to be a good product.
To act like they're just going to just raise all
the prices of tickets and everyone's going to hate their
lives is very short sighted as well. These people are

(02:15:23):
very very good at what they do, and they have
a strategy on how they're going to create a good product,
or not just create a good product, but add on
to an already good product. Right, that's the hopes. So
to assume that they're just going to come in and
everything's going to go downhill, I think that's pretty short sighted.
And for every terrible private equity story we've all heard,

(02:15:45):
there's tons of good ones too, right, there's private equity
coming in and saving plenty of businesses. So as a
ute fan and with my bias, obviously, that's just hopefully
what happens and what I'm hoping for.

Speaker 12 (02:15:56):
I'm worried about the basketball team, and I know we're
both football guys, right, We're a basketball school. Though I
heard some great stories today about fifties and the hoops
and some of the culture there, mister Gardner and obviously
Majeris and now we got Alex Jensen here. I'm looking
to support this guy big time right as a former
ute player and he was my basketball camp coach back
in what nineteen ninety nine whatever he was here, he's

(02:16:19):
from Bountiful, and so I'm seeing that product right, I'm
seeing some they're playing hard, but same thing, right, the
whole brand has got a rise here, Jake, do you
have any solutions for us? How are we going to
raise this whole level thing we need to get on
a nationally? What do we got to do?

Speaker 4 (02:16:34):
I think you got to get creative and look, I
haven't crunched any of the numbers or looked at what
the fan attendance is at the basketball games or anything
like that, but I mean you can make like, there's
a few things you can do. And probably the first
thing that every college wants to do is make a
big splash in an il go offer, you know, an
aj De bandsa type player, you know, twelve million dollars

(02:16:57):
or whatever, four million dollars and find a brand deal
with Nike like they did at.

Speaker 8 (02:17:00):
B with you.

Speaker 4 (02:17:01):
That's what everyone wants to do. That's probably not gonna happen,
right So what's the answer. I don't know is the
answer right now, But I'm curious, like, have we thrown
around literally every idea to bring basketball back everything from
And I know this is opposite of what private equity
would probably want to do, but you know, really cheap tickets,

(02:17:23):
cheap concessions within basketball only make it accessible to everyone. Marketing,
I'm not too sure the answer, but you got to
really go out of the box and get creative here.
And I don't know what their budget's like for an IL,
but you do you do kind of got to get
get really really creative. I don't know how they're going
to do that, Trevor, But if you gave me a

(02:17:45):
few days to look at the business side of the
basketball team, I'd have a few hot takes for you.
But off the top of my head, you know, that's
that's a riddle for me.

Speaker 1 (02:17:55):
One of the dynamics here, Jake, that I think is
going to be a little bit complex. And as you
pointed out a few times, and I've said maybe a
thousand times over the past two days of shows, there
are so many unknowns. We have to wait to see
a lot of the financials. We need to see what
the percentages are like. We do know some things, namely
that the University of Utah is maintaining one hundred percent

(02:18:16):
decision making with the Athletic Department. It is a seven
person board. Mark Harlan will share it. Three of the
chairs go to folks that do work for the University
of Utah, whether it's the Athletic Department. I would imagine
Taylor Randall will take one of those seats. I honestly
don't know. I hope he does, because he's really really sharp.
Outro gets two seats, and then one of the seats,

(02:18:39):
which will be the seventh seat, goes to a local
business person who has invested into the Utah Brands and
Entertainment LLC, which is the spinoff here. When it comes
to the separate for profit in their own words, organization
that will operate separately from the Athletic Department, they're going
to hire a president who will report to the board,

(02:19:01):
and then once a year, the board has to report
to the Board of Trustees. But what feels inevitable, Jake,
and you're really smart to point out there are so
many people that just hear private equity and panic and
go to jump off a bridge. For every private equity failure,
there are probably three or four, if not more success stories.
These guys are billionaires, not because they're idiots. They know
what they're doing. But one of the things they very

(02:19:23):
much want to do, and all of them are in
this boat, is they want to flip this thing in
five to seven years and see a very healthy return
on their investment. So what this is probably going to
mean is that Utah football season ticket holders that aren't
in this group that was allowed to invest in the
LLC are probably going to get an email in the
next little bit it's like, hey, we love you, but

(02:19:44):
season tickets are now thirty percent more expensive. If you
like the tailgate up there, Hey we love you, please
tailgate with us. Your tailgate slot is now thirty percent
more expensive. My question, Jake, without anybody really knowing the answer,
but we're just talking about possibilities.

Speaker 2 (02:19:58):
What is the.

Speaker 1 (02:19:59):
Reaction going to be in this community from people that
might have budgetary issues, that are already having problems attending
games asked to donate and buy more.

Speaker 4 (02:20:12):
Great question, and I think I know the answer only
because I've seen it there in Utah. Not not in
football or sports related, but with the ski resorts. I
don't know if either of you ski. I know Trevor doesn't.

Speaker 8 (02:20:26):
Trevor.

Speaker 4 (02:20:27):
I'm sure you could ski, Trevor, but you're probably not
up on the slopes. I can't risk it, but I do.
I do remember every year it feels like the ski
resorts have increased their prices, and every year it seems
like everyone complains. Yet every year I see every single
same person renewing their pass, and I think that happens here.

(02:20:48):
Right There's gonna be people whining and complaining, and you'll
see the uptick. And then on top of that, you've
got to imagine that the fan base is growing. So
if someone else isn't renewing their seats, someone else will
And all of those types of decisions too. You know,
the more that I work in data and analytics and
tech and things like that, all of that is driven

(02:21:10):
by data. There's going to be back decisions on price raises,
who will renew, who won't, the likelihood of renewal, all
of that is driven by data. And just from looking
at Oatro's website, you can tell that they're backed by
all of this information, so they're going to make smart
decisions around that. The reaction probably won't be great, but

(02:21:30):
more often than not, people psychologically, especially if you're a
huge fan, are going to renew. They're going to want
to get season tickets. If the tailgates twenty percent more,
they're going to say, yeah, this sucks, I'm so mad,
But they're going to be there anyways, especially if Utah
is a good football team. I mean, that's the key
to it. If they're six and six, like, do you know,
do you really want to renew and pay all that money?

(02:21:51):
Probably not, but it's an interesting psychological question. And the
fomo that people have if you've thought is good, and
that's the bet, right, that's the big bet, is that
they're going to have good programs throughout each sport and
fans are going to pay a premium price to see
a premium product, and that's what you hope for.

Speaker 2 (02:22:10):
It seems like a little bit of a crowded market.

Speaker 12 (02:22:12):
Now we've got hockey, okay, we got jazz, we got
Utah basketball and football, and then Buyu and Bous playing
at a national level and at least with hoops. Do
you see any concern with that? I know you used
to live here. Do you think there could be you know,
you mentioned six and six. You know, I'm predicting if
we don't get this money, right, gods are we're going
to be trend that way. That's a one year evaluation. Obviously,

(02:22:33):
we talked about as we get this money, it's going
to change. Do you see any concern with some of
that burnout?

Speaker 2 (02:22:38):
Yeah?

Speaker 12 (02:22:38):
Yeah, there's a lot of sports going there talking about
bringing a pro baseball team here, maybe Murphy.

Speaker 2 (02:22:41):
What do you think?

Speaker 4 (02:22:44):
Yeah, I think I mean a few times May pushing
it for the playoffs every year and ranked in the
top ten. You know, are the fans? Are the fans
that sell out the stadium even when we were going
five and seven back in the day, Trevor, Are those
fans not gonna want to show up? You know, that's
the question from sport to sport. That's a good question, though,
that's a good question. I don't know how how do

(02:23:05):
you keep the attendance up? You know, and some of
the other sports that might not might already not have
great attendance. But yeah, in football, if you're winning, those
seats are gonna fill whether there's a baseball team there
or not. I the University of Utah will sell tickets
if they are winning, and that's that's the key. I

(02:23:26):
think there's going to be some pain in the prices
and maybe some inconveniences to people, but this isn't the
first time something that price is raised somewhere, and I
think Utah fans, even though they won't be super happy
about that, I think they'll still show up. So yeah,
Travor to your point, if you go two years in
a row having five wins, it's going to be tough
to renew those season tickets. So it's all about the wins.

Speaker 2 (02:23:51):
Well, Jay, great stuff. Tell people where they can go
follow you.

Speaker 1 (02:23:54):
You've been really good about expressing some very valid spots.

Speaker 4 (02:23:58):
So where you at on social Yeah, Jake Murphy. So
the E is the number three though, So Jake, JK
three Murphy, give me a follow. I don't give the
best takes always, but I'm trying.

Speaker 2 (02:24:12):
Well.

Speaker 1 (02:24:12):
I've always appreciated your uh, you know, your your ability
to think through things critically and intelligently. So I appreciate
your time today and we'd love to get you back
on soon.

Speaker 4 (02:24:21):
Okay, Yeah, let's talk soon. Trevor reached out, let's talk soon.

Speaker 2 (02:24:24):
All right, buddy, and made to eight number. Now I'll
call you.

Speaker 4 (02:24:27):
Okay, we'll see you guys.

Speaker 5 (02:24:28):
All right.

Speaker 1 (02:24:29):
Jake Murphy, former tight end the University of Utah. I
would say Jake is one of our wrider, more thoughtful
Utah football alums.

Speaker 2 (02:24:37):
Is that fair to say? He's a genius? Dude.

Speaker 12 (02:24:39):
He could have played pro baseball easily. Okay, probably could
have played college hoops. He's a tremendous athlete.

Speaker 2 (02:24:45):
Okay. His whole family man to his brother's playing in
the NFL.

Speaker 12 (02:24:50):
McKay, Jake McKay was with us, We were state with
Jay Hill, and then he had brother was at ut
season off.

Speaker 2 (02:24:55):
It's alignment.

Speaker 12 (02:24:55):
His dad is who he is. And again he's got
a good campaign going now. I kind of looked him
up a little bit. He's getting his dad in the
Hall of Fame. We need to get I mean, they
just let in Jeff Kent.

Speaker 2 (02:25:05):
He's good. He's not Dale Murphy. Yeah, come on, man.

Speaker 1 (02:25:08):
Yeah, it's beyond time. We've been on that in this
market for quite some time. ESPN seven hundred and the
Rocky Mountain Chevy Dealers invite you to help those in
need at the road Home this holiday season with needed blankets, coats, shoes,
hats and gloves. Drop off donations at any Rocky Mountain
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(02:25:28):
dealer locations. Spread the warmth and help others find their
way home and join us at the Midvale road Home.
Media thon December eighteenth and the nineteenth. All Right, wrapping
it up, busy show. Drink it through a fire hose.
Here porter some interesting stuff here, you know, lost in
all of the news, whether you perceive it to be

(02:25:49):
good or bad, is the prescient nature of making sure
you're fully funded prior to this transfer portal. And I
don't know how much of this cash and fusion is
coming Utah's way immediately. And if priority number one is
to service the debt, which it probably should be, it
does lead the question as to where you're at as
a football program to add to the roster and retain

(02:26:14):
the good players you have. So it's probably an underreported
dynamic of what the financials are actually going to look like.

Speaker 3 (02:26:20):
Yes, short term, nothing's necessarily changed in that regard this
private equity equity thing. If you could kind of boil
it down to the bare bone spence, This is Otro
betting on two things, Utah football and the future of
college football right and where Utah lands in that. It's

(02:26:41):
also Utah betting on themselves and their place in the
future of college football. If both of those things move
in a positive direction, then this could be a great
opportunity for both sides of this situation. But again, this
is something moving forward, debt servicing facilities, all of the above,

(02:27:04):
it doesn't necessarily solve what you have in the next
what couple weeks month as far as getting your roster
put together for twenty twenty six, which is fast.

Speaker 1 (02:27:14):
Approaching, fast approaching, and again urgent. Interesting that no news
has surfaced about coach Wits. My guess is he'll coach
the bowl game. As we know that ultimately Utah will
be in the Vegas Bowl against Nebraska.

Speaker 2 (02:27:29):
There's a chance we're going to be on site for that.
Not sure what that look that will look like just yet.

Speaker 1 (02:27:33):
It is a nervous night for NBA fans because porter,
as you know, it is the Emirates NBA Cup, So
you know, I know, I know, I know, you know,
and you know that, I know that.

Speaker 8 (02:27:42):
You know.

Speaker 3 (02:27:43):
My favorite night of sports activities. I think in maybe
the calendar year the NBA Cup.

Speaker 1 (02:27:49):
Yeah, very very nervous there suns, oh, very nice Suns,
Thunder Spurs Lakers, so yes. In college hoops tonight for sure,
b Yu with a good comeback win at the Garden
against Clemson.

Speaker 2 (02:28:01):
So college football kind of rolling here.

Speaker 1 (02:28:04):
Certainly I will move some of our coverage over there
as football kind of goes away, which of course is
always sad. Sharon Moore lost his job today for an
inappropriate relationship with the staffer, fired for cause. So not
only is he unemployed, he will not receive any of
the money he would have received if he was just
fired for being bad at his job. So a costly

(02:28:24):
mistake from Sharon Moore. All right, let's get out of here.
Portal comes our way on a Thursday edition of the show.

Speaker 3 (02:28:31):
Thursday edition of the show, we've been talking too much
private equity. We're gonna talk a little football tomorrow. College
football playoff, no Utah, no BYU, no Jake Rhetz laughing
too Lane or in the college football playoff, of course,
Sam at Bruckhouse, our guy will stop by for that
and then we'll hand it over to maybe the two
guys who are as qualified as anyone to discuss the

(02:28:51):
story of the week, Doctor Chris Hill and what Kyle
Bonagura will join the drive.

Speaker 1 (02:28:57):
That will be a fascinating educational show. We will talk
about two Lane's use of the Spider two Why Banana
with Jake Rehetzlaff under center.

Speaker 2 (02:29:04):
Have you noticed that they love that route? They do,
I know they do.

Speaker 3 (02:29:10):
I love to see these local connections, but man, it
must be a little tough for BYU fans Utah fans
to look across. They've been listening to Sam Bruckhouse on
the Home of the Youthes all year. They've been watching
Jake Rehetzlov who was a BYU Cougar less than a
calendar year ago, and they'll be watching them in the
college football playoff. But yeah, Spider spider Y two Banana whatever.

Speaker 2 (02:29:31):
You want to call it.

Speaker 1 (02:29:31):
Such an underrated route, man, I'm telling you, but I'm
a football guy. You guys know that, all right. I
am staying at the ESPN seven hundred. For the number
of people that have reached out to inquire you're stuck
with me. I'm sure a lot of you are bummed.
But for those of you that like it, don't worry.
We're not going anywhere, just gonna take a little part
time gig with our friends over at Ku TV and

(02:29:52):
expand the TV footprint a little bit, and we're gonna
have a lot of partnerships and synergies now that we
have a TV partner, which is something the radio station
has never had. But we'll say goodnight, special thank you
to Richard Smith, Matt Brown, Andrew check It's and Jake Murphy,
Trevor Riley too.

Speaker 2 (02:30:06):
A lot of good stuff today. If you miss any
of it.

Speaker 1 (02:30:08):
Website is there, which is ESPN seven hundred Sports dot com.
You can also download our mobile app and take us
on the go. That ESPN seven hundred app is in
the App Store in the Google play Store. Then, finally,
for what we do in our space four hours every afternoon,
it's called The Drive with Spence. Check its check out
our podcast. Wherever you get your shows, support us, subscribe, rate, review,

(02:30:29):
say nice things in the comments, give us all the stars.

Speaker 2 (02:30:31):
It helps.

Speaker 1 (02:30:31):
He's porter, I'm Spen saying, and I'd have a great
Wednesday evening. Talk to you on a Thursday Drive. As always,
you can catch it right here on your humbleyets. ESPN
seven hundred