Florida State University is currently in discussions with JPMorgan and Sixth Street Partners, exploring options to secure funding from institutional investors. These conversations have been ongoing for the past few months, and Sixth Street Partners has expressed interest in becoming an investor. It is yet unclear whether the funding would be specifically allocated to FSU’s athletic department or other parts of the university. However, FSU’s president mentioned the possibility of leaving the Atlantic Coast Conference (ACC) if the conference’s revenue distribution model remains unchanged.
It’s important to note that the discussions with potential equity investors are separate from FSU’s potential decision to leave the conference. In related news, Sportico previously reported that FSU was collaborating with JPMorgan, with Sixth Street being involved in the discussions as well. When approached for comments, both JPMorgan and Sixth Street declined to provide a statement. Neither FSU nor the NCAA responded to CNBC’s request for comment at the time.
Obtaining funding from institutional investors is not a common practice for public universities. While the Pac-12 Conference expressed interest in selling a stake in its media rights to private equity firms in 2019, the plan did not ultimately materialize. Sports media consultant Lee Berke explains that merging private investors with media rights for public schools posed significant challenges, partially explaining the failed attempt with the Pac-12. Although FSU is just one public school, similar hurdles may still apply to private investment. Potential investors may desire a prompt and predictable return on investment, but it could take years for FSU to renegotiate its grant of rights, secure a new, more substantial media deal with the ACC or another conference, and extricate itself from the current agreement.
While conferences like the Big Ten and Southeastern Conference have recently secured highly lucrative media rights deals, the ACC remains tied to an agreement with ESPN until 2036. Media rights deals serve as a primary revenue source for both professional and collegiate teams and leagues. FSU has been a vocal advocate for changing the ACC’s revenue distribution model to prioritize schools that generate higher TV revenue, as the current model emphasizes success in football and basketball.
Overall, FSU’s collaboration with JPMorgan and Sixth Street reflects the university’s efforts to explore alternative funding options and address concerns regarding the ACC’s revenue distribution model.
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