Important OCS Update

[CousinRicky]

1 hour ago, Jim Johnson said:

As you know, having a stadium does provide additional revenue streams (naming rights, advertising, concessions, boxes / suites, etc) - which reduces the need to rely on ticket sales for debt payments

Those will be less than maybe they're planning for if we remain where we are. Let's not kid ourselves, that stadium was proposed based on the Big12 telling us many years ago that we wouldn't be considered without a stadium. We acted too late now that that conference appears to be maxed out.  

[John Lewis]

8 minutes ago, CousinRicky said:

Those will be less than maybe they're planning for if we remain where we are. Let's not kid ourselves, that stadium was proposed based on the Big12 telling us many years ago that we wouldn't be considered without a stadium. We acted too late now that that conference appears to be maxed out.  

That literally has no bearing at all.

[CousinRicky]

12 minutes ago, John Lewis said:

That literally has no bearing at all.

So what conference will have us now? You still think the Big 12?  Possibly the ACC but as many have said a lot of things have to fall into place. 

[Triple B]

16 minutes ago, CousinRicky said:

So what conference will have us now? You still think the Big 12?  Possibly the ACC but as many have said a lot of things have to fall into place. 

We're in a conference. It was time for a stadium ......... a P5 invite would be the cherry on top

[Brad]

4 hours ago, Jim Johnson said:

I don't believe anything that happened this week should give anyone pause to reconsider the stadium project.

I’m not talking about “we”.  I’m talking about what a bond underwriter would charge today compared to last year. 

Probably not a real issue since we aren’t seeking public financing, right?  Is the DSO the entity responsible for the bonds- backed by the Foundation?  I’ll have to read tomorrow.  Who is backing the bonds?  More to learn for me. If this were a corporate bond, it might’ve just crossed over to junk bond status.  
 

Risk has increased because opportunities are decreasing. 
 

We are in a worse spot than we were.  Things have changed around us.  

[Jim Johnson]

7 minutes ago, Brad said:

I’m not talking about “we”.  I’m talking about what a bond underwriter would charge today compared to last year. 

Probably not a real issue since we aren’t seeking public financing, right?  Is the DSO the entity responsible for the bonds- backed by the Foundation?  I’ll have to read tomorrow.  Who is backing the bonds?  More to learn for me. If this were a corporate bond, it might’ve just crossed over to junk bond status.  
 

Risk has increased because opportunities are decreasing. 
 

We are in a worse spot than we were.  Things have changed around us.  

Ah. Well good news there.  No bond underwriter, at least at first.  USF is borrowing the money from a bank. 

Yes, things have changed around us, and I contend we are actually in a better spot than we were before, for two reasons:

1 - The B1G and Big 12 are nearly "full".  The Big 12 going to 16 now and maybe 18, but would need Fox or ESPN to agree to more -- which ESPN has apparently done for 2 more west coast teams (to get the "after dark" time slot). Meanwhile, The B1G going to 18 now, and hoping to get 2 more from the ACC, then wait for Notre Dame for doing anything else.

2 - The ACC will lose AT LEAST two teams, but quite likely no more than six.  It's just a question of when that happens.  According to Warchant, and their BOT meeting would seem to support this, FSU will be announcing their departure before August 15th... will anyone else join them?  USF's academics, location in Tampa Bay, and significant commitment to football have to place it at the top of a very short list.

 

Edited August 6, 2023 by Jim Johnson

[Brad]

1 minute ago, Jim Johnson said:

2 - The ACC will lose AT LEAST two teams, but quite likely no more than six.  It's just a question of when that happens.  According to Warchant, and their BOT meeting would seem to support this, FSU will be announcing their departure before August 15th... will anyone else join them?  USF's academics, location in Tampa Bay, and significant commitment to football have to place it at the top of a very short list.

And this scenario is critical.  It’s BS to pretend otherwise,  IMHO opinion and with respect to others.  

[Brad]

Quote

The estimated cost for a new stadium is $340 million.  The approval by the board authorizes the USF Financing Corp. to issue a debt of $200 million that the university will repay from several sources, including operating revenues from the stadium and other revenues generated by USF Athletics. In the plan provided to the board, USF also identified the funding sources that will be used to support the other $140 million on the project: Cash advances on future capital gifts ($50 million); Capital Improvement Trust Fund ($31 million); auxiliary funds and proceeds from a 2017 FCC auction ($34 million); and contingent cash contribution from the sale of educational broadband service licenses ($25 million-$40 million).

$200 milion in a debt instrument.  Debt can be in bond issues or some type of a loan.  A $200 million bank loan would be crazy.  If that’s the case, that USF got a fixed rate on a long term $200 million dollar loan, that would be spectacular and probably a participation loan.  
 

With a lack of detail, internet sites make it sound lime a simple loan:

Quote

Another $200 million would come from a 20-year loan at 5.5% interest.

Whereas this one sounds like some kind of bond issue:

Quote

USF then intends to borrow the remaining $200m over 20 years with an estimated taxable fixed interest rate of 5.5%. The plan is for the University to service that debt, at around $17.8m per year, through new revenues generated by the stadium like ticket sales, concessions, parking and sponsorships.

 

Bottom line is uncertainty makes capital more expensive.  With the door closer to closing, things become more uncertain.  

[Bull Matrix]

10 hours ago, John Lewis said:

That literally has no bearing at all.

Agreed. Too many people are thinking the conferences are what defines us but I can see conferences restructuring more down the road. Seeing more regional conferences that will make more sense for all. USF is going to be in a good position whenever that time comes. 

[Cat941]

ITA the uncertainty swirling around CFB only makes it more tenuous.  I'm not resigned to this failing, but the idea that our stadium is 100% ironclad is no longer true.  I am not feeling optimistic anymore.