Is anybody actually going to take the $30 million loan from the Big 12’s private capital deal with RedBird and Weatherford Capital?

As of this afternoon, 11 schools have already said no to taking what amounts to a $30 million loan at a near-10% interest rate. Here is the updated list:

This shouldn’t come as a huge surprise. Early reporting on the deal suggested only 2-6 schools would take the plunge. But it has left plenty of people wondering what the point of the deal was if almost nobody wanted the capital infusion.

There are two important points to make in response to that question. 

As for why schools are passing on the money, multiple reports indicate that universities can secure more favorable terms than RedBird is offering. They can also do it without getting in bed with a potentially pushy private equity partner, even though no equity is technically being given up.

The Fort Worth Star-Telegram’s Mac Engel has more details on that. 

But the main point of the deal was never the credit line available to individual schools.

The key here is deepening a partnership with RedBird, which has Paramount in its portfolio. Paramount owns CBS and is expected to own TNT soon, and both could become potential TV partners when the Big 12’s next deal comes around. Adding depth to those relationships could pay bigger dividends than anything else in this deal.

RedBird also says it has already secured $145 million in extra revenue for the league over the next five years through partnerships with companies like PayPal.

The Big 12 now has exclusivity with RedBird and can continue to foster more revenue-generating opportunities with its partner. 

That’s what is really at the heart of this deal. It seems pretty low-risk to me, especially if most schools aren’t going to touch the $30 million available to them.

I understand the aversion to anything involving private equity firms. But I do think this has generally been overblown because those two words are in all of the headlines.

What You Need to Know

• Alabama is backing out of a home-and-home with a Big 12 team, which is very lame. 

• Did Cincinnati actually know about Brendan Sorsby’s gambling problem before last season? I talked to The Athletic’s Justin Williams to get the full story. 

• The Indiana Gaming Commission and Ohio Casino Control Commission are now investigating Texas Tech QB Brendan Sorsby. 

• The NCAA officially approved the expansion of the NCAA men’s and women’s basketball tournaments to 76 teams. 

• The Player’s Era Men’s Championship has expanded to two brackets, with eight Big 12 teams participating next season.

• Want your Big 12 news and analysis in podcast form? Listen to Open For Business at the gym, in your car, or first thing in the morning on Apple Podcasts, Spotify, or YouTube.

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