Weiberg Says Oklahoma State Won't Be Taking Private Equity Money
STILLWATER – Oklahoma State has joined the growing list of schools that are declining any of the up to $30 million line of credit that has been offered to each of the Big 12 members as part of the Big 12 Conference office and commissioner Brett Yormark’s negotiations of a private equity deal with the partnership of Red Bird Capitol and Weatherford Capitol. It is described as a three-prong partnership to deliver an infusion of capital to the league offices starting with $12.5 million in immediate funds to be used to “drive commercial development and business growth.”
The deal bringing the two capitol companies together in a partnership known as Collegiate Athletic Solutions. Another part of the agreement other than the immediate funds to the league office is an opt-in for a capital credit line of $30 million available to each school. The University of Utah made their own deal with private equity corporation Otro Capital earlier this calendar year. Now, 13 other Big 12 schools have come out publicly and declined the offer, which carries a double-digit interest rate on the payback of the “loan.” That list as of Friday of schools declining includes Oklahoma State University.
“First, I give Commissioner Yormark a lot of credit for providing opportunities for the schools to look at. he is an innovator. He pushes the envelope,” Weiberg said of the Big 12 leader on a school podcast on Friday with play-by-play voice Dave Hunziker. “This isn’t a private equity deal. There is no ownership of the conference or a private investment opportunity. As of right now (the option of a line of credit or loan) is not something that Oklahoma State will do. If we need something like that we believe we have other avenues or levers like that we would pull first before that.”
A double-digit interest rate and a major creditor would not be in Oklahoma State’s best interest. Yes, there is a need for more revenue in this age of revenue sharing and NIL with student-athletes. It has heaped on a large new financial responsibility for athletic departments, but this doesn’t look like a good way to handle it.
Weiberg further explained that the money that Red Bird and Weatherford are fronting the Big 12 office will be used to invest in other business ventures that could become new revenue streams for the conference. All of those revenues through the league, such as multi-media rights, sponsorships, conference championship events, and any joint business ventures, eventually end up paying the bills for the conference office and most revenue is passed on to the member schools.
Selfishly, Weiberg could have interest in the potential line of credit. It was recently revealed that his new contract signed by him in mid April calls for him as athletics director to end each fiscal year with a balanced budget and increased revenue from the previous fiscal year. A failure on either of those could result in Weiberg being dismissed from his job with cause and no further benefits. One major Power Four athletic director told Pokes Report that he had never seen a clause of language as such in any other athletic director contract.
“It is our people that drive the vast majority of our revenue,” Weiberg said saying it is more than the conference payout, which should be announced for this fiscal year in the next few weeks at the conference meeting. “Whether thats through ticket purchases, donor contributions, and then all of the things like our licensing. That’s when people buy our gear or support our sponsors of OSU athletics, those are significant things, but they are driven by our fanbase.”
Weiberg also mentioned institutional support. He mentioned that all kinds of institutions look at that differently. We know from investigating that Oklahoma State University athletics has long paid its’ own way. They have not taken subsidies, loans, or funding in general from the University. Recently, with the increased costs of not only maximum scholarship numbers in all sports, but also the revenue share and NIL going to athletes, many athletic departments have taken money or increased money from the University. Again, from our research we know that was in the planning stage for Oklahoma State. Former school president Dr. Kayse Shrum had a plan to help athletics. However, since she was forced out by the Oklahoma State/A&M Board of Regents that stream of funding to help athletics has not been inacted. Athletics is still working to pay its’ bills and succeed on its’ own without general University support.
