Story originally published on Sept. 24. Updated with quotes on Sept. 26.
FCS commissioners heard a pitch this week in Chicago from an outside group looking to invest in and help operate the playoffs outside of the NCAA umbrella. HERO Sports first reported this pitch on Monday, the day before the meeting.
That outside group has been identified as an investment firm called Sequence Equity, first reported by Amanda Christovich.
The concept would be similar to the College Football Playoff business model, which is an LLC owned by FBS conferences plus Notre Dame that runs the FBS (CFP) national championship bracket outside of the NCAA postseason tournament umbrella. It handles revenue distribution, sponsorships, media rights, and operations.
In the pitch given to FCS commissioners, the new playoff system would be operated by a new private entity, which would be owned by FCS conferences while Sequence Equity takes a minority stake. Sequence Equity would reportedly inject tens of millions of dollars in investment into the playoffs.
HERO Sports reached out to Big Sky Commissioner Tom Wistrcill, who is the Collegiate Commissioners Association Vice President, before and after the meeting. Wistrcill agreed to speak with us on Friday after all of the commissioner meetings in Chicago concluded.
“You sit there with an open mind,” Wistrcill told us about how the meeting went. “You listen to lots of ideas, and your mind goes about 100 different directions with all of the various things at play. And it was very intriguing. It’s step one of a long process, but you have to take step one and have an open mind of different ideas. In this day and age with the financial pressures that our schools are under, we have to get creative in trying to find ways to help them out. And this is certainly worthy of our time to start exploring things like that.”
“I felt like everybody had an open mind,” Wistrcill added. “Everybody was positive about the fact that we have to be open to these types of potential opportunities. And we decided, ‘Hey, let’s take the next step. Let’s talk to the NCAA. Let’s talk to our own people within our conferences about some of the things we learned. And then let’s see where it goes from there.’ I mean, it’s a little scary, it’s all new, it’s shiny, and cool, and scary. It has all of those different adjectives to it. But I think as a group, we were like, ‘Yeah, let’s crawl before we walk and see where it leads us.’ So that’s where we left the room.”
The FCS playoffs are viewed as an undervalued sports property with proven metrics (TV audiences, strong brands, etc.) but with underachieving monetization. A stronger TV deal, more sponsorship opportunities, and other ways to maximize revenue are all possibilities under a private model. And as Division I athletics continues to get more expensive, added revenue streams are vital.
A financially incentivizing FCS playoff system could also stabilize realignment to make the FCS more attractive while also rewarding teams for investing in FCS football and earning revenue with postseason success. The current system requires FCS schools to bid on hosting playoff games while returning around 85% of ticket revenue back to the NCAA. That draws the ire of athletic directors.
“We lose money,” one sitting athletic director, whose program has made multiple playoff runs in the past decade, told HERO Sports before the meeting. “It’s a great product and tremendously undervalued. Surely there has to be another way. I think every athletic director, president, and commissioner will listen if something like this is presented.”
Another AD told HERO Sports: “People realize we are being operated like the track and field championships, right? Same per diem, same setup. We are lumped in with everything else they do, and that’s not right.”
In a tweet responding to our original report, Abilene Christian VP for Athletics Zack Lassiter said, “As someone who worked at the FBS level for 20 years before spending the last four at the FCS level at a school invested in football success, I absolutely believe FCS is undervalued. Especially in the post House era. Excited to see where this goes.”
Wistrcill echoed those frustrations: “One of the things that [Sequence Equity is] driving at is this property is very undervalued, and I agree with that. I think we have an incredible product in FCS football. And so that’s part of what we want to talk to the NCAA about, is this properly valued? I mean, our conference has been incredibly successful in the playoffs. I don’t like it when I hear my ADs say to me, ‘Tom, this is awesome. Made this run in the FCS playoffs. But we lost a ton of money on it.’ That just doesn’t sit well with me. So that’s part of this discussion around media rights and sponsorships, and every piece that you could put into a business entity like this to grow the revenue to offset those costs and to provide a payment to the conferences and the schools. That’s what gives this thing traction, is capturing it all in one big bucket and then finding ways to make a lot more money on it. We don’t sit and think this is going to be like the CFP. But it could be heading more in that direction, and that’s why we need to explore it.”
There is enough intrigue and interest from commissioners to bring this to the NCAA, which has the TV rights for the FCS playoffs, for further discussion.
“We’re all proud NCAA members, and so we want to talk to Charlie Baker and his staff about some of the things we heard,” Wistrcill said. “And we would need to know what is the impact with NCAA membership from a championship position, from a pure FCS football, and media rights. So there’s a lot of complicating factors that go into that discussion, so we’ll set up a meeting at some point with them and pick their brain a little bit about here’s what we learned and what’s the impact on NCAA membership and all of those things.”
Per its website, Sequence Equity is a multi-strategy investment platform based in Los Angeles, investing in sports, media, entertainment, technology, and infrastructure. The firm works with owners, operators, and institutions to structure and deploy capital in ways that strengthen operations, expand reach, and support long-term value creation.
As private equity makes its way into college athletics, it does draw concern from some fans and media.
“I think that all of us come into this with varying degrees of knowledge of what private equity means, how it works,” Wistrcill said. “And so part of this is an educational process for each of us around, OK, here’s an interesting concept, and these guys, a couple of them played FCS football, so they understand sports. But how does that plug into, in my case, the Big Sky Conference and to the schools in my league and eight different states? So the other commissioners are sitting there, maybe they’ve talked to equity people before. Maybe they’ve heard these types of things before. For others, it’s probably the first time they’ve ever heard anything like this. A lot of it is just an educational piece of how could this work. What’s the short-term impact? How does this play out long-term? What are the pros and cons? And we’re just scratching the surface of that because we just had this hour and 20-minute meeting of which they did primarily most of the talking, and we asked some questions, and then agreed to follow up later. That’s the piece that it’s all so new, the terminology is new, that we’re going to tread very, very carefully down this path.”
Sequence Equity’s co-founders (Marcus D. Stroud and Brandon M. Allen) attended Princeton. Jason Belzer, founder of Athletic Director U, was also a part of this pitch with Sequence Equity.
The pitch didn’t include specific playoff formats, and for positive reasons.
“In their model, we still run it the way we want to, as FCS commissioners and as an FCS group,” Wistrcill said. “So we didn’t get into the weeds as to a 24-team same format, different format. That didn’t come up because their pitch the entire time was for us to run it how we see fit.”
Wistrcill believes this will be a long process with a lot of discussion. He also believes the conversations are worth having.
“I think, to me, this is our responsibility as an FCS community to explore all options to make the championship better,” Wistrcill said. “And that’s why we’re going to venture down this path and engage our presidents councils and the NCAA. We haven’t done anything yet other than have conversations, and so we’re going to continue those conversations and communicate with our ADs and presidents as we go along, and we’ll see where it leads.”
