Kentucky spinning athletics into a seperate LLC, or holding company.

[ttowncoug]

I like the idea a lot. Put a Board overseeing WSU athletics. We'd finally have some real accountability. If the holding company owned the real estate, I assume you could also work with developers and development partners on things like a new arena.

The other thing, which could be novel, is allow stocking ownership into this entity. I'd look at this as a way to wipe all facility debt away.

" If adopted, the entire UK Athletics Department would be shifted to a limited liability or holding company being created called Champions Blue, LLC.

The UK Athletics Committee is discussing the proposed opportunity this afternoon. The full UK Board of Trustees will consider the move at its meeting Friday.

The strategy will provide the department with the flexibility to unlock new revenue streams through public-private partnerships and potentially other transactions, such as real estate."

New Model Represents Innovative Approach to Future of College Athletics

ukathletics.com

 

[95coug]

I like the idea a lot. Put a Board overseeing WSU athletics. We'd finally have some real accountability. If the holding company owned the real estate, I assume you could also work with developers and development partners on things like a new arena.

The other thing, which could be novel, is allow stocking ownership into this entity. I'd look at this as a way to wipe all facility debt away.

" If adopted, the entire UK Athletics Department would be shifted to a limited liability or holding company being created called Champions Blue, LLC.

The UK Athletics Committee is discussing the proposed opportunity this afternoon. The full UK Board of Trustees will consider the move at its meeting Friday.

The strategy will provide the department with the flexibility to unlock new revenue streams through public-private partnerships and potentially other transactions, such as real estate."

New Model Represents Innovative Approach to Future of College Athletics

ukathletics.com

It's an interesting idea, but would be complicated. If they leased the facilities from WSU, then WSU would still have to run any improvements, and would still have to use a public bid process, pay prevailing wage, etc. If they bought the facilities from WSU, then they're on the hook...and they'd also lose the property tax exemption. And, the fact that the IT building is essentially the south stands could be problematic too.

Probably more viable as its own entity at Kentucky than it is at WSU.

 

[UberCougars]

Great. Another board staffed by UW grads appointed by the Governor.

 

[ttowncoug]

Great. Another board staffed by UW grads appointed by the Governor.

Green Bay Packers operating model. Sell stock. Stock holders elect the Board.

 

[cr8zyncalif]

95 brings up valid points. The lease structure (gross lease? Modified triple net? Full triple net") is important. I'd absolutely keep property ownership, day to day facilities maintenance and utilities with the landlord (WSU). Facilities construction as well as major retrofits...that is a tough call. Probably have to be handled on a case by case basis, depending upon intended purpose of the location, and subject to review and modification as building/site use evolves. Payroll? That goes with the LLC, other than normal payment by the school to classroom instructors (which often includes at least a portion of the cost of a lot of the coaching staff). Travel, sports equipment, officiating payments, etc., are all clearly with the LLC. I think you could circumvent the prevailing rate leasing via some form of "blue sky" valuation due to school reputation and ability to advertise being linked to athletics. Prevailing wage is not an issue unless we have some really low paid people.

 

[95coug]

95 brings up valid points. The lease structure (gross lease? Modified triple net? Full triple net") is important. I'd absolutely keep property ownership, day to day facilities maintenance and utilities with the landlord (WSU). Facilities construction as well as major retrofits...that is a tough call. Probably have to be handled on a case by case basis, depending upon intended purpose of the location, and subject to review and modification as building/site use evolves. Payroll? That goes with the LLC, other than normal payment by the school to classroom instructors (which often includes at least a portion of the cost of a lot of the coaching staff). Travel, sports equipment, officiating payments, etc., are all clearly with the LLC. I think you could circumvent the prevailing rate leasing via some form of "blue sky" valuation due to school reputation and ability to advertise being linked to athletics. Prevailing wage is not an issue unless we have some really low paid people.

I think prevailing wage would only become an issue in construction and upgrades of the stadium.

Maintain ownership, but outsource everything (including payroll). The new athletics LLC becomes the customer who uses the facility - and pays for the right to do so. Day to day operations and maintenance get farmed out to a management company that becomes responsible for keeping it useable, managing minor tenant improvements and repairs.

If tutors and instructional staff are required, the university can provide them, but the athletics LLC has to pay for them. Basically, all athletics costs follow the LLC, and they pay the university for the right to exist.

 

[ttowncoug]

95 brings up valid points. The lease structure (gross lease? Modified triple net? Full triple net") is important. I'd absolutely keep property ownership, day to day facilities maintenance and utilities with the landlord (WSU). Facilities construction as well as major retrofits...that is a tough call. Probably have to be handled on a case by case basis, depending upon intended purpose of the location, and subject to review and modification as building/site use evolves. Payroll? That goes with the LLC, other than normal payment by the school to classroom instructors (which often includes at least a portion of the cost of a lot of the coaching staff). Travel, sports equipment, officiating payments, etc., are all clearly with the LLC. I think you could circumvent the prevailing rate leasing via some form of "blue sky" valuation due to school reputation and ability to advertise being linked to athletics. Prevailing wage is not an issue unless we have some really low paid people.

WSU could own the facilities. If WSU owns 51% of the entity, they'd have ultimate control. WSU could decide what the lease rates for the athletic facilities are. In affect, taking all the facilities debt off of athletics and transferring that to WSU.

 

[dgibbons]

WSU could own the facilities. If WSU owns 51% of the entity, they'd have ultimate control. WSU could decide what the lease rates for the athletic facilities are. In affect, taking all the facilities debt off of athletics and transferring that to WSU.

Maintaining tax exempt status would be essential.

 

[ttowncoug]

Maintaining tax exempt status would be essential.

You could set up a non-profit. Green Bay Packers are a not-for-profit.

I'd buy stock in WSU Athletics. Could be a creative way to get some capital to reinvest in revenue generating assets or enterprises.

 

[UberCougars]

BET MGM is setting up a charitable foundation to support secondary education?

Noble.

 

[dgibbons]

You could set up a non-profit. Green Bay Packers are a not-for-profit.

I'd buy stock in WSU Athletics. Could be a creative way to get some capital to reinvest in revenue generating assets or enterprises.

I thought Green Bay was publicly traded?

And if you own stock in it, can’t be nonprofit.