FSU Working with JPMorgan to Explore Equity Raise, Private Equity Could Lead Investment
On Wednesday, Florida State University’s president, athletic director, and Board of Trustees publicly voiced their concerns over the increasing revenue gap between the ACC and the SEC and Big Ten. During the board meeting, President Richard McCullough and Athletic Director Michael Alford harped on the state of conference realignment and where the Seminoles stand relative to the rest of the country.
The administrators noted that Florida State could fall short of their competitors in the SEC and Big Ten by as much as $30 million per year, effectively threatening the university’s ability to remain competitive in intercollegiate athletics at the national level.
The situation prompted President McCullough to issue an ultimatum, “I believe that FSU will have to, at some point, consider very seriously leaving the ACC unless there were a radical change to the revenue distribution.”
Florida State’s leadership refrained from making any definitive decision during Wednesday’s board meeting, but Board of Trustees Chairman Peter Collins repeatedly echoed that the university would have more information to share “sooner rather than later.” Of course, the Seminoles are current members of the Atlantic Coast Conference, which is locked into a stringent contract with ESPN until 2036 at the very least.
Should Florida State wish to depart the ACC prior to the 2024 football season, they would first need to settle their Grant of Rights issue and pay the $120 million exit fee all before August 15th of this year. Chairman Collins appeared on Warchant TV earlier in the week, stating that the Grant of Rights is “the least of university’s worries,” and a recent report could indicate that Florida State’s actions echo the chairman’s statements.
According to a report from Sportico, Florida State University is working with JPMorgan Chase to explore how the school’s athletic department could raise capital from institutional funds, such as private equity.
With the grant of rights issue seemingly on the back burner, it appears as though the university is focusing its attention on the financial challenges associated with both staying in the ACC and choosing to leave it.
“The school is considering a structure similar to many of those pro sports investments, where commercial rights are rolled into a new company, the private equity fund invests in that entity, and then recoups its money via future media/sponsorship revenue,” read the report from Sportico.
The report notes that multiple sources have pointed to private equity “giant” Sixth Street as the firm in "advanced talks to lead a possible investment.”
Per their website, Sixth Street operates nine investment platforms with over $60 billion in assets under management and active investments in the San Antonio Spurs, Real Madrid, Barcelona, and the NWSL’s Bay FC. Despite the overwhelming amount of private equity involvement at the professional level, Sixth Street’s rumored investment in Florida State University would mark a first for the realm of collegiate athletics. Florida State’s athletic department, Sixth Street, and JPMorgan Chase have all reportedly declined comment at this time.
The clock is ticking as the Seminoles attempt to find a way forward before August 15. Both the Grant of Rights and the immense financial requirements remain hurdles for departure, but the university has made its position clear: they will not stand idly by while their program suffers, as Trustee Justin Roth put it, “a death by a thousand cuts.”
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