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S2E8 - Tim Pernetti - Now It's Legal with Jim Cavale
169 Plays2 months ago
Tim Pernetti is the commissioner of the American Athletic Conference and former director of intercollegiate athletics at Rutgers University. From 1994 to 2003, Tim worked for ABC Sports and held several media positions, and from 2001 to 2009, he was a football analyst for Rutgers Football and Sports USA Radio’s NFL coverage. In 2009, Tim became the youngest director of intercollegiate athletics in college sports — overseeing 24 sports, business engagements, NCAA relationships, the Big East/Big Ten Conference, donors and alumni.
Tim joins Now It’s Legal to discuss his role as the commissioner of the American Athletic Conference, as well as his career as director of intercollegiate athletics at Rutgers University — and highlighting the importance of building these relationships in the NCAA.
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About Now It's Legal
In July 2021, NIL forever changed the trajectory of college athletics. It’s been a long time coming as the NCAA has long needed changes like NIL, the transfer portal, revenue sharing and other benefits for college athletes.
We introduce to you the Now It’s Legal podcast. Join us as we discuss the industry that holds the hearts of millions of fans who want to understand where its trajectory is heading. We are talking to those who are invested in and affected by NIL including: Former and current college athletes, presidents and head coaches, broadcasters and media personalities, investors and more. This is just the beginning of NIL and what it means for the future of college athletics.
Host Jim Cavale is a former college athlete and entrepreneur who has become an advocate for young athletes across the country. In 2017, he created the INFLCR app that allowed athletes to build their brand on social media, and in 2021, evolved into the NIL management technology for more than 100,000 athletes across 200 college athletic programs. INFLCR has since been acquired by sports tech titan, Teamworks.
In 2023, Jim founded Athletes.org which which is the players association for college athletes to negotiate the best terms for their college athletics experience. AO provides its member athletes with a free membership, empowering them with a voice, on demand support, and group licensing income in the same ways that professional league associations do for their member athletes.
Tune in to a new episode on Wednesdays this fall and join in on the conversation on Instagram with @nowitslegalpod and @jimcavale.
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Transcript
Introduction and Guest Announcement
00:00:10
Speaker
right, welcome to another episode of Now It's Legal, the show where we talk about everything past, present, future in college, athletics. I'm your host, Jim Cavell. And on this episode, we're going to be talking to a conference commissioner sitting in the chair today and really leading things forward in a lot of ways for the industry. And his name is Tim Pernetti.
Tim Pernetti's Background
00:00:31
Speaker
Tim is a guy who played football at Rutgers, worked ah for a startup called CSTV that really became a very successful media venture in the early 2000s, came back and was AD at Rutgers, worked for IMG College on the leadership team there. And then as the president of IMG,
00:00:50
Speaker
led a private equity deal that's catapulted the academy into to new heights. And so Tim is just a great guy. He decided to come back into college athletics. We're going to talk about why he decided to do that during the chaotic time, as some describe it, that we're living in. ah But as you would think, he's an innovator. He's got a lot to say about that. ah So here it is, my interview with Tim Burnett.
00:01:15
Speaker
Well, Tim, first off, appreciate you making time.
New Role as Conference Commissioner
00:01:18
Speaker
I know you're new in the commissioner's chair. And so the first place I want to start is you've been visiting your schools, traveling around. Talk about what the first few months have been like as the commissioner of the American conference. Well, it's not been dull. I could tell you that much. It's been, it's been a whirlwind, but it's been great. I was really.
00:01:38
Speaker
I really evaluated this opportunity in a lot of depth, you know, for myself personally, and just knowing the space and and understanding all the things that are changing around it. But, you know, getting out on the campuses has been the best part. It's it's a chance to just get to know people because People are what makes a conference go and also like I insist on spending time with student athletes when i'm on campuses And for two reasons number one is I think commissioners sometimes are viewed in a different way by different people And I always want to be accessible, you know to everyone and and i've traded my my cell phone number with student athletes and I have text exchanges and i've been part of student athlete advisory committee calls because
00:02:19
Speaker
It's part of why I got back in, you know, was my student athlete experience 100 years ago meant so much to me. You know, it really changed me as a human being. And to be honest with you, I think I'd be different had I not done it. But I know what the job is. Like there's all these business things. But my responsibility is to so listen and and do everything I can to create a great experience for student athletes. And at the core, that's the job. So being out on campuses is just a constant reminder of why we do what we do.
00:02:50
Speaker
So you came back into this industry after having the post at Rutgers.
Opportunity Amidst Chaos
00:02:56
Speaker
both as a student athlete and as the athletic director. um You then went to IMG. We're a part of a lot of innovation that happened um to really set that that place up for what it's continued to achieve with some of its amazing regardts and results and progressions. um But you chose to come back into college athletics at a time where a lot of folks are leaving college athletics. And it's it's a scary time because there's uncertainty
00:03:23
Speaker
But I think people like you look at this as an opportunistic time to create change and innovate for a sustainable future. So like just talk about the decision to come back into college athletics and take this job at ah at a conference that's not an autonomy conference, um but also different than much of the group of five.
00:03:46
Speaker
It's a great question. you know I really felt like what you're what you're talking about is like you know getting back in, thinking it through. like I really felt the weight of that on my shoulders as I went through the process because I've had a lot of really fun stops in my career and a lot of them have been in collegiate athletics, like from the media side of it to doing a startup when I was in CSTV to being an athletic director.
00:04:08
Speaker
yeah I felt like I saw it from all these different sides of the business and even when I ran IMG's college commercial business, it's it's different everywhere you are, but I did spend a lot of time with it. As you can imagine, like everybody's got an opinion in college sports. right so I heard from a ton of friends and a ton of colleagues in the industry that literally wanted to know if I was crazy or if I had lost my mind. and you know What I said to every single one of them was,
00:04:34
Speaker
I think uncertainty and chaos are a deterrent for people, sometimes psychologically, when they think about an opportunity professionally. But to me, I think college sports is, again, my own experience, like I'm a product of it. I believe in it. I think the original mission of it has gotten out of focus, but it's important to kind of bring back in focus. But why did I want to get back in? I think in the chaos and in the uncertainty is where all the opportunity is.
00:05:02
Speaker
you know And would we be facing so many of these challenges right now if the business had modernized itself over a period of time? I don't think we would. I mean, there's always challenges, but failure to modernize in a lot of ways is why we are where we are. So we can either spend all of our time lamenting that,
00:05:24
Speaker
Or we can go do something about it. you know And i'm I'm sort of on that side of it, which is it's exciting to see what's possible out there. I know things scare people, but the one thing this industry needs to do better is get comfortable talking about change.
Media Revenue and Investment
00:05:39
Speaker
like It doesn't mean you're going to do it.
00:05:41
Speaker
But you have to talk about it. And, and I do find that there's a real resistance to that, you know, in a lot of areas that I go, but, you know, for me personally, that was why I took it. I felt like there's a real opportunity to change and like autonomy group of the media made this crap up. Like they literally made it up. I don't use any of those words ever in my day to day narrative, but no matter who you are, like to me, there's a group of conferences playing FPS football.
00:06:07
Speaker
And I look at all of those conference commissioners as my peers. And while we may be at a different place in the hierarchy, as far as investment and performance and profile and all of those things, we all are still trying to maximize investment to create the greatest experience possible for kids. That's the job. But now everybody's eyes are on all these other things.
00:06:30
Speaker
And that's what makes it even more challenging. But in that challenge is where all the opportunity is. Like when when but things are uncertain, that's when you can take more risk and have more fun with it. Absolutely. And I think the hierarchy you described is an interesting one in the respect of, you know, the American has a ah good position right in the, let's say, fifth spot of conferences when you look at just revenues off of media deals and such. um Your schools are investing across the board at a higher rate than than a good portion, more than half of the FBS. But you're still in this place where you've got to figure out how to make up the delta.
00:07:10
Speaker
um and be in a position to get that playoff spot each year, or maybe have multiple playoff spots, like grow it, right? And that's just the football example. So I just, how do you look at the opportunity you have for the American to grow, improve, how do you even define growth or improvement for the American in these first couple of years as commissioner?
00:07:33
Speaker
ah you know The one dynamic that that is always going to be there hanging over all of our heads is you know you can't guarantee the result. You can't guarantee the winning. And like it or not, you know in sports, like that is a key component of success is having success on the performance side you of what you do. We are doing well as a conference in a lot of those categories that you would outline, but it's not enough. And I also think that in order to reinforce what it is that we've been doing for years and will continue to do. We're talking about different things as a membership that I'm not sure are being discussed in other places. We're talking about House and how we're gonna manage this as a conference and what the conference can do to provide solutions. Naturally, one of them is new commercial opportunities to infuse more capital into the conference. Media rights used to be, if not 99.9% of the revenue, 100%, that's not the way it is anymore.
00:08:31
Speaker
There's more out there. So we're talking about private capital and private equity. We're in the market, you know, not only valuing but talking to brands about conference naming rights. We are pushing the envelope on the legislation related to Jersey patches and Brandon Hellman stickers. Why are we doing all this? Not trying to turn college football into NASCAR, but we are trying to open up new commercial opportunities to generate more revenue for institutions so they can invest in more of these things continuously. We're also talking about minimum investment.
00:09:02
Speaker
You said it, and I love that you know this. We have a conference. Again, put the hierarchy aside. I know what's going on on our campuses. We are investing, not only in the university, but investing in athletics.
00:09:15
Speaker
We're talking about a minimum level of investment in house not like all right opt in opt out figure it out This conference is of the same mind that this is important going forward to continue our growth To go into it as a conference and also to establish a minimum level of investment that to be in this conference You're going to be expected to invest in house at a minimum and what you can do beyond that It's a free market where you have the ability to generate more revenue and and contribute more to it. So that's how we do it. We do it by thinking about doing things differently, constantly talking about change, and we're going to swing the bat at some things that I think the industry has been reluctant to do in the past.
00:09:55
Speaker
Well, we've seen investment in coaches, not just the head coach, but the staff payoff. We've seen investments in facilities payoff. House will now be another category, which is your investment in talent, which every coach will tell you he or she can't win without great players. And now that will be an investment that can pay off. um How do you create a floor to ensure that there's not too big of a delta between the lowest investing school in your league and the highest investing school in your league? Because especially in your conference, that could be a big difference. It could be. And I think that'll be the challenge. And commissioners and athletic directors and
00:10:37
Speaker
Everyone around this gym have all talked about how to attack it, and you know this because you're in the space. Everybody's trying to figure out a way to evaluate it and figure out solutions through it, right? What's what's the best mousetrap for us? And I'm not sure that's going to be the same for everyone. But initially, the industry was talking about house and talking about caps.
00:10:56
Speaker
There's a revenue share up to a cap, and there's the cap and they cap. As we looked at it, we said it's unfair to restrict any institution's ability in our conference to be able to, if they can bring more revenue in, to be able to push it back out into all of these benefits. But we expect that everybody's going to be invested at some level. I don't know that there's a an easy or logical way to try to control
Adapting to Change in Student-Athlete Support
00:11:22
Speaker
the space above the minimum. But what I would say is if everybody's at the minimum, it further separates what we're doing as institutions from you know everyone else around us or our so-called peers or whatever it is. ah But restricting others to try to control it doesn't feel right to me. you know The whole space is is inclined to want to move towards doing more for student athletes. And if we want to try to do more, we have to know we're all in at a certain level.
00:11:49
Speaker
and then It's on the conference. It's on the institutions. It's on our brand partners. It's on our TV partners. It's on us to perform so we can make the argument to generate more revenue into all those buckets. And my sense is if we do a really good job, in a few years, everybody's going to be spending above the minimum anyway, based on the fact that we're bringing more revenue to the party.
00:12:10
Speaker
Absolutely. So if you look at House, it's one of the um the ideas that have now started to materialize. There's a few of them. There's private equity, which you mentioned. There's college football league concepts, which we'll get into. um But the House settlement's the first one that's kind of materialized. And the House settlement wasn't an idea that materialized.
00:12:31
Speaker
how sentiment really is an answer to an idea that's materialized, which is the school being able to directly share revenue with their athletes via NIL still, instead of the money having to come from outside of the school. ah But it's not necessarily the end game solution. it's It's just a transformational, progressional solution. It's a big step forward, right? And so how do you look at house in the journey of where this industry has to end up? like how do you How sustainable do you feel the terms are ah versus what still needs to happen after house occurs? The answer to that question is the the eye of the beholder. you know Depending on where you sit, I think you'll get a variety of different answers. I don't think there's an institution in America that is now faced with the prospect of you know back damages and future revenue sharing that has a plan for it that is
00:13:30
Speaker
the right plan yet. I think everyone will come up with their plan and they'll execute on that plan. And I would expect things will change you know as we go. The thing that concerns me the most about it is, because to me, there's all this battling that you guys are reading about that's going on. you know there' There's the FPS conferences, there's the other conferences, and then the ones that just don't even have football. And how does all this distribution of damages make sense? The reality is this. You have football, you don't have football.
00:14:00
Speaker
Where's the value generated? Everybody had a hand in a period of time where the business didn't modernize itself or there was resistance to change. So everybody, you can't excuse yourself from that responsibility now because there is a component of it that you know comes back to affect you. So the thing that I'm concerned about is it feels like we're going to have to do 10 years of work in one year.
00:14:25
Speaker
yeah That's what really is, I think, the challenge. like Is money in back damages and the numbers? Of course, that stuff's challenges. But the reality of of being able to execute and get some of these things in place and figure out what the right plan is in the midst of also trying to figure out a way to get your arms around back damages and all of these things. like We're doing 10 years of work in one year. That's going to be daunting for the entire industry. Like the the baseline of it of creating more benefits for student athletes to contribute to a greater, more elevated experience. I don't think anybody would argue with that. But the fan doesn't necessarily know everything that's got to get done in order to get this all implemented. So we are jamming a decade's worth of work into one year. And and as it plays out, there's some realities
00:15:17
Speaker
at the school level that the the school has to face, right? there're Number one, schools don't have front offices where they can put 500 different deals together with 500 different athletes. um And so there's a complexity there. ah The other complexity is the legal aspect of this. I mean, schools are gonna have contracts now. We've seen the national letter of intent go away. So even if you're your baseline is is scholarship and benefits and and no revenue sharing, you're still gonna have a contract with the school for that, but then for some athletes, it'll also include revenue sharing. And and and so these contracts um are gonna have some liabilities legally that come with them. And so how how important do you think it is for the student athlete voice to be included in how a school approaches this, especially when student athletes probably lack the full information of of how this business works at their school?
00:16:16
Speaker
I don't think student athletes have ever had a bigger megaphone than they have right now. and I'll just tell you from my own perspective, I don't want to speak for others. As I was interviewing for the job even even before I started it, after I accepted it, my mindset is student athletes are our partners now in everything that we do.
00:16:34
Speaker
And I think that's the way we all should sort of view the future. And a lot of people, like as I'm running around campuses, Jim, I run into donors and traditionalists and and all these people. And to some extent I am myself, because the period of time that I was able to compete in college football. And the business is is it's modernizing at such a rapid rate. That's why people have a hard time getting their arms around it. like Had this been an evolution over a 10 to 15 year period of time,
00:17:01
Speaker
I think people would be more accepting of where we've arrived to at this point. But student athletes already have a voice as it relates to how institutions should involve them in how this is going to work.
00:17:16
Speaker
their voice should be heard, but it's also a slippery slope, right? It's like me going into a room and having confidence that I could walk out of that room of athletic directors and presidents with a unanimous vote on anything. But the consensus building part of this is really, really hard. And when you're dealing with student athletes,
00:17:35
Speaker
you're you're talking about a student athlete that maybe stayed home to go to a state university to swim and a student athlete that was the number one recruited athlete in America in football and landed in that spot and is high profile. So the student athlete voice needs to be a balanced voice. you The challenge with the whole industry is the future is being built, but is it being built for 100% or is it being built for the top 1%. So that's the thing that we all really need to get our arms around. And I'm also a realist. Certain sports generate the revenue that is the engine in the car to make everything else go. But if student athletes are going to have a voice, it needs to be a balanced voice across all different kinds of student athletes that maybe arrived in the same place, are part of the same university, wear the same colors, but they have different views of the world. The one thing I know they all want
00:18:35
Speaker
is they want to have a great experience. Like I've asked student athletes on campuses and said, do you want to be an employee? And I think when they understand what that means, I think universally they don't. Because there's so much about being an employee. And as an adult, you could talk to young people about being an employee saying, you sign up for a certain thing and you have to perform. But when you don't perform, your performance managed. If you continue not to perform, like in our world, you and me, we get fired.
00:19:03
Speaker
Like that's how it works. There's some realities to that that I think, you know, need to be brought back into it, but I think their voice needs to be balanced. I think they already have a voice in most of these matters. That's why we are where we are. The thing that we will spend our time on is making sure they're surrounded with resources and people that can help them understand more of what they're walking themselves into on a daily basis or a better understanding of what all this means. So when they are asked to have a voice, they have all the information to be able to make an impact.
00:19:38
Speaker
Absolutely. That makes complete sense. And I think, you know, from my perspective, having been in rooms with student athletes at one school from all the different sports at that school, I've seen that once they obtain the information on how the business works at that school and how much money does come from football,
00:20:00
Speaker
or men's and women's basketball versus their sport, let's call it soccer, track and field. I think student athletes are more concerned with what you said, which is having a great experience and and solidifying that that experience is going to continue, that their sports going to still be there, that they're still going to have a scholarship and benefits. And so I've seen consensus in rooms. Notre Dame is a place we visited where we had a room with athletes who are team reps for athletes.org for different sports. And as an executive counsel almost, they sat there and and and formulated their stances on a lot of things. So I think ah materializing student athlete voice is why we exist. This is like you said, a time where they already do have a voice and it's probably the best time for student athletes in history to ever be able to speak up and not have to fear ah that their voice might be persecuted against because we've seen most of the things they've asked for in court has been granted.
00:20:55
Speaker
um but But going back to you taking the job and this topic of student athlete voice, I was always impressed by what you told me when we first spoke. You had just taken the job as commissioner and you talked about how you called different athletes from different American Conference schools, um some who were in the portal and stayed, some who were in the portal and left.
00:21:17
Speaker
And you just had conversations with them about the current climate of college athletics. Talk about that as you can, because I think that's a really unique a starting point that you decided to take with this job. Yeah, and I've had the opportunity since I started to be, you know, I think I surprised everybody. I showed up on a couple of student athlete advisory committee calls and, you know, had a chance to talk to all of them as well. And and just, a you know, a diverse bunch of great kids that want to be in leadership.
00:21:44
Speaker
and As a commissioner, like how can you actually effectively think about the future, plan for the future and represent who you represent without knowing what's on their mind? And and also understanding that there's a dynamic here that no one wants to talk about. like Talk about transfer portal and everybody's like, such and such quarterback or such and such power forward you know used to be here and now they're here and they're all talking about a result that people think happens in every case, forgetting that more than 50% of these kids end up stuck in the portal. So it started with me trying to understand that dynamic. And with certain student athletes, they had a vision of going towards that portal and what the results would be. It wasn't in any case that the result would be, they would end up right there.
00:22:34
Speaker
The result always was, well, I'm going to have a choice here. I'm going to have options. And I don't know that it's set up in a way for success for everyone. I mean, the numbers speak for themselves. But if you're not talking to student athletes, if you're not listening to what they have to say, and you know, young people like, you know, I had my own three kids who are older now, but my 17 year old daughter who was going to play division three lacrosse, like those kids don't hold back.
00:23:01
Speaker
Like if you ask them, they won't hold back. They'll tell you what's on their mind. They'll tell you what the conference can do better. They'll tell you what they really want, which is, again, a great experience. they want to be developed as This stuck with me on my first SAC call. They said, we want to be developed as human beings as much as we do as athletes. And this is not the stuff that you read about.
00:23:26
Speaker
on the, you know, in any of the publications that cover college sports. but You don't read about that as much, but that is right. More than 90% of the young people competing in athletics are signing up for that. Like they want to become fully developed human beings and they want to be able to compete in their sport and they want to have a great experience.
00:23:46
Speaker
Well, as far as the experience goes, a lot of non football student athletes have been dragged into situations because of the decisions made about football, right? The best example would be the Pac-12 and You know the the four schools that are now in the big 10 and all the traveling they're going to do your alma mater Rutgers will play, you know, a West Coast team on a, you know, a weeknight in, you know, volleyball or soccer. um And, in you know, Cal being in the ACC, all the examples that that you know.
00:24:19
Speaker
um There's a ah thought out there that because A, it will produce a lot more revenue, but B, it could help eliminate some of the things that other sports are being dragged into, that there should be a separation of football.
Centralized Football System Proposal
00:24:34
Speaker
And whether it's so with a conference structure that still exists, like we've seen with Project Rudy, the Disney executives proposal that came out last week, or whether it's um without conference existence just for football, ah instead it'd be one big league like College Sports Tomorrow who's come out with but their plan. there's There's plans out there ah that that show that there's billions more a year in media revenue alone if football is part of a centralized system with centralized scheduling and and all the things that that are a part of these proposals. As a commissioner, obviously, you're watching, you're learning, you're seeing what's out there. like How do you look at that that approach?
00:25:15
Speaker
Well, you nailed it. A commissioner's job is to is, I think, anyway, is to listen and learn and sort of sponge up everything that's being discussed in the space. and When things come into the space that flow in from the outside,
00:25:29
Speaker
that are different or require a change, you know are viewed by some as not worthy and some as innovative, then people have different reactions to those things. um To me, the idea of building something different versus the constant poaching that goes on in realignment, that feels progressive to me. like That feels right, that feels progressive. I'm not saying it should happen because Those proposals that are out there, like there's work to be done, right? There's work to be done on impact on Title IX, impact on antitrust discussions, like ah future litigation. there's There's a lot of that to to unpack. But do they answer questions that the industry can't currently answer? Also should be taken into consideration. So whether things change or not, Jim, I think things need to be discussed.
00:26:28
Speaker
and And I do feel like the commissioners group, like you have a really dedicated, smart bunch of people that do care about young people having a great experience. And we should all be open-minded to learning more about these things. Learning and listening and talking is not doing anything beyond that stuff, but understanding how the industry could go, could change. I think that's any commissioner's responsibility. As it relates to what it means, you know pro sports they They have it figured out in a lot of ways because it's a one seller that goes to the marketplace on behalf of a group. And in collegiate athletics, we're all out there fighting for our peace, you know, of the pie. If you thought about college football and the power of college football as a single seller in the marketplace, I think it has value beyond what people are even talking about right now. And at the end of the day, that's controversial.
00:27:28
Speaker
and dramatic and a lot of other things, but is that the best path to properly fund collegiate athletics to have sustainability? like These are all the questions that I would ask, so I think it's all worth listening to, trying to be open-minded to, and having a discussion about, because you know this. like Our conference just went through this you know with the last round of expansion.
00:27:52
Speaker
and What I was really proud of was we had brands we have great brands and we build strong programs in this conference. But when they got in the mix, they approached it in a unified manner. you know These institutions actually worked together. They made sure to be talking to each other. We helped them at the conference level.
00:28:10
Speaker
separate fact and provide actual outcomes versus maybe some of the speculation was out there. But there is still like, I hate to say romantic, maybe that's the wrong word, but there still is some unity in this business that's inspiring. Like there are groups like ours that are serious about trying to build something different. So I think building something different, even if it's across conference lines, like that feels progressive to me.
00:28:36
Speaker
So when you talk about private equity earlier, it's something that's also become a commonly discussed topic.
Private Equity's Role in Collegiate Athletics
00:28:43
Speaker
And, you know, if I think for different schools, different leagues, it makes maybe more sense than others. um How do you look at private equity and what are some of the, you know, overarching discussions you've been having around private equity?
00:29:00
Speaker
Well, I said this at and football media day because, you know, as a commissioner, I think you get a little worn out of reading all the headlines about the industry being broken because face it. I mean, there are a lot of things that need to change and are changing right before our eyes about the industry. But if the industry was so broken, why are private capital groups at the table interested in being part of what we're doing?
00:29:28
Speaker
ah Those two things, they don't connect. and Collegiate athletics, like any other attractive business to private capital, and I went through one of these deals at IMG Academy, we sold to to private equity a little over a year ago, is, of course, the investment gets the headlines. Of course, the the the dollar signs get the headlines. The operational expertise and acumen you get out of these these partners is as valuable as anything else.
00:29:53
Speaker
so I'm looking at this space with a very open mind. You know, naturally our conference is looking to accelerate our brand and our growth and experience for student athletes. And in order to do that, access to capital is something that's high on our list. But the idea is not to just, I think people think, oh, private equity in college, you're just going to get more money and they're going to spend it. It's like, no, this is not about bringing investment in for coaching buyouts. Like this is about bringing investment in to invest in value creating things that will generate more value as a conference. So when we get to the market for our next round of media rights, something that looked like a $1.5 billion dollar enterprise one day looks like a $3 billion dollar enterprise the next day. So you've you effectively and strategically utilized that investment to create more value. So that's why it's interesting to me. Having said that,
00:30:51
Speaker
I think it's all kind of circling the airport, you know figuring out whether to put the plane down or not. And there's a lot of ways to attack it, but let's not deny the fact that private capital has been playing in college forever. Like anybody that's been in Moody Center in Texas, like that's a private capital deal. OBG comes in, finances it, turns over the keys, controls the revenues for a period of time, and away we go. That's like in its simplest form. Investing at a conference,
00:31:17
Speaker
has more complexities to it. But what we know is they're looking to invest in things that they they know, historically, continue to escalate in value. And that's why it's worth having the conversation. It doesn't mean we're gonna do it, but it's it's an attractive opportunity that's out there. Well, I mean, here's the thing. You've seen some people say, ah leaders say, well, we don't need private equity to do XYZ. And I understand that comment. And and technically, it's true.
00:31:47
Speaker
but there is an accountability that comes with private equity because there's no private equity investment that doesn't come with an ah ROI strategy to go meet or exceed. And so when you do involve private equity, not only are you gonna have the expertise you mentioned earlier to help you get from 1.5 to three, but there's gonna be incentive for everyone to get from 1.5 to three because everyone's gonna win off of the upside.
00:32:16
Speaker
And even in the existing climate of college athletics with conference media deals, everyone doesn't win off of upside because there's even shares going to every school. So like there are some some pieces of wisdom that come with private equity coming in.
00:32:34
Speaker
A hundred percent. Like I said, there's, there's, there's operational acumen. There's, there's experts, you know, that have worked all over the industry and not just in finance. So, excuse me, there's a lot that comes along with it that I think has value. Naturally, when people talk about it, all they talk about is, you know, they think bankers, money, ownership control, like that's not what these conversations are about. You know, passive investment to help grow value is different than a private capital group coming in and outright buying an asset. So at the same time, I think the days of of things being equal are being challenged more than ever. Like in our conference in particular, and I know what i've what I've taken over here and look to move forward into the future, performance-based revenue sharing is going to be a thing here.
00:33:19
Speaker
because the reality is I think some some brands are are continuing to invest, if not over invest in collegiate athletics. They're creating great media exposure for us as a conference. They're also willing to schedule in a gutsy manner out of conference to create even more visibility. you know My sense is our membership needs to be rewarded you know for that. So that's where we're moving. And I think wherever we know we've got members that can create more value or are willing to do that, then they need to be rewarded for that. I said this the other day at Basketball Media Day. like this is a What I like about it, Jim, and I know the challenges, like this is a blue collar gritty, gritty leak. It really is. like Nobody is looking for anything for free.
00:34:04
Speaker
And there's no participation trophies like people are just trying to earn it. So, but if they invest and they do earn it, they need to be rewarded for earning it. And that's the direction, you know, that we're going to move. Well, there's no, there's no team more gritty than right down the street here.
Conclusion and Future Invitations
00:34:20
Speaker
Andy Kennedy, UAB, the conference champs from men's basketball last year. um But Tim, man, I cannot thank you enough for, for joining us for this conversation. Looking forward to seeing when you were back in Birmingham for a game at UAB.
00:34:33
Speaker
And just keep thinking forward, man. You're helping, I think, a lot of folks who've been in college athletics for a while think outside the box, because that's who you are and what you bring to this industry. And I appreciate that in my seat at athletes dot.org, because we need more leaders like you thinking forward. Well, it's very kind. I really appreciate the time, and I'm looking forward to seeing you in person, Jim. Thanks.
00:34:57
Speaker
Great stuff from Tim. I love how he talked about the fact that there's got to be an ah ROI if capital is infused. And honestly, that means the same if capital is infused from the school, the university into athletics, let alone from PE into athletics. There has to be a plan to take that capital and invest it into places.
00:35:18
Speaker
that can create revenue growth and ultimately growth in value. um So really appreciate Tim for taking the time to do that interview. And of course, if you are interested in being a part of the show, if you're ah a commissioner or an athletic director, a leader in college sports, if you're an athlete, we wanna have you on. and If you know somebody that should be on, let us know. Here's the best way to do it. Follow us on Instagram at nowitslegalpod.
00:35:45
Speaker
You'll get great teasers of new episodes every time we're ready to release one. So you can watch shorts about the new guest before we release it, but you also can DM us with ideas for the show for guests. You can also go to jimcaval.com and message us through there. And if you're not subscribed, please make sure you do on Apple Podcasts, Spotify Podcasts, or YouTube. For everyone on our team, thank you for tuning in to another edition of Now It's Legal.