Joe Moglia explains plan for future college sports model, views on Big 12's private equity exploration

When Joe Moglia landed at Coastal Carolina in December 2011, fans and outside donors had a preconceived notion about their new head football coach.

The former CEO of TD Ameritrade arrived on campus with a combined college and pro record of 1-4. Some thought he landed the gig to help pay for a new baseball field or practice field because he was rich, not because of his moneymaking tactics, as the now-defunct Grantland reported at the time.

“How many thousands of pages of rules and regulations are there?” he said in 2012. “The NCAA, Wall Street, period. Most of the time, without a whole lot of rules, most people know the difference between right and wrong. Give me 500 rules, and I’ll spend all my time trying to get around those rules.”

During his time in Conway, South Carolina, Moglia was known for his signature green pen. The former Wall Street executive didn’t speak much at practices, but he was always taking notes. His outside-the-box thinking worked. Just one example, as ESPN reported in 2014, he rearranged the trainers’ tables on the practice field to reduce the amount of time it takes players to get a drink of water.

Moglia was 56-22 as a head coach in his five seasons with the Chanticleers. He helped grow the institution’s footprint while leading the football program into the Football Bowl Subdivision. His time with Coastal Carolina also gave him a front-row seat to the drawbacks of the NCAA model.

Simply put, Moglia used his green pen to take notes about problems within college sports. He’s gone from the day-to-day minutia of college football but is still on top of current events.

College sports is a business now

The NCAA and Power 5 conferences voted to sign off on the House settlement in May, agreeing to pay $2.77 billion in back damages to athletes over 10 years. The second piece of the agreement is revenue sharing, allowing institutions to pay $20-22 million annually to athletes.

If the NCAA did not agree to terms on a settlement, the organization would be looking at up to $20 billion in damages. In a recent op-ed published in the IndyStar, Moglia opined that the NCAA going bankrupt would not ruin college sports.

“Frankly, college athletics – major revenue sports – has always been a business,” Moglia recently told On3 in a phone interview. “But it’s a business within a collegiate academic environment, and that’s not the case today. Today is absolutely, without qualification, a business. It’s that simple. You need a business perspective to be able to address everything that’s going on in the business world. If I have a problem, I’ve got to be able to handle it head-on. I got to handle it as soon as possible.

“… [NCAA president Charlie] Baker is a lifetime politician, and I think he is really hung up on wanting to do everything he can to keep Power 5 football within the NCAA auspices. He’s going to Congress to try to get help. Now a private sector business, I can’t imagine a private business going to the government and asking them for help. They’re trying to address the money issue. They’re focused only on the Power 4 or five now. The rest of them, they’re not paying a whole lot of attention to. None of these, to me, potentially solve the problem that college athletics is faced with today.”

Joe Moglia calls for new college sports order

In his op-ed in the Indy Star, Joe Moglia laid out the framework for a new college sports model. Moglia, using his former TD Ameritrade background, believes in football, men’s and women’s basketball breaking away to form what he calls the Professional College Athletics Association (the PCAA). Under that umbrella, those sports would be modeled after the NFL, with collective bargaining, binding contracts, direct payments and NIL deals.

All things college football coaches would support, as many believe collective bargaining is the route to rein in the transfer portal.

“You have professional college athletics,” Moglia explained in the phone interview. “Everybody’s trying to paint everything with the same brush because they’re just focused on Power 5 athletics and just focused on the money. So for those universities that want to be professional in certain sports, make-believe for argument’s sake, that’s going to be all Division I football, men’s basketball and women’s basketball. Well, then you know what? That’s a business. They got to break away from the NCAA and have their own professional organization.

“So let’s call that the PCAA. They break away and have to hire their own outside leadership. They have to pay them, and that leadership only operates in a way that’s in the best interest of those specific sports that are being considered professional.”

On the flip side, he would also support the formation of an Amateur College Athletics Association (the ACAA). This would include other Power 5 sports and remain with the NCAA, only allowing NIL deals with brands and eliminating NIL collectives.

According to Moglia’s op-ed, if a player at the ACAA level was a star in a revenue sport, they could transfer to a PCA program. 

“All the others can stay amateur,” the former Coastal Carolina coach said. “Now that includes different sports, even at the Power 5 schools. So the others, let’s call it the ACAA, the Amateur Collegiate Athletic Association. They would continue to report to the NCAA, similar to what they are today. Hopefully, the NCAA upgrades their rules a little bit, but they’re amateurs. That’s it. So if you go to one of those schools, you’re going with the idea it’s an amateur organization. There’ll be championships. There’ll be honors, all those things, but nobody’s getting paid. If you want to get paid, you got to be good enough to be recruited by one of the schools that are in the PCAA.”

Is private equity the right move?

As athletic departments prepare for an enormous financial stress test on the heels of approval of the House settlement, Big 12 Conference Commissioner Brett Yormark is exploring potential revenue streams never before accessed in college athletics. 

On3 confirmed last week that Big 12 campus leaders are weighing a potential landmark private equity investment intended to narrow the revenue gap between the league and the industry’s two super conferences – the SEC and Big Ten. The deal would entail the Big 12 receiving a cash infusion of as much as $1 billion from Luxembourg-based CVC Capital Partners in exchange for as much as a 20% stake in the league.

The 16 conference members would receive a portion of the cash investment, and the league would receive access to CVC’s investment services and clients. Moglia knows enough about private equity to deliver a warning to conferences or schools that turn toward outside capital.

“No. 1, I can appreciate somewhere in there, I think is probably a good idea,” he said. “First, don’t underestimate. You’re going to private equity people. People are going to make private investments in your company. They expect a return. So what you’re doing then is you’re borrowing up front to take care of your immediate needs today, with the idea you’re going to be giving back a good portion of your revenues down the road, whatever that deal turns out to be. You tend to be near-term greedy, rather than long-term greedy. From the Big 12 perspective, I’m getting a nice plus. Somebody is going to really take care of me now. But my problems are not going away.

“This is not solved. So even if this thing [House settlement] gets passed with the $2.7 billion settlement that the NCAA has said they would do, even if that gets passed, that only gives them protection for 10 years.”

Joe Moglia says his plan works better than legislation

The House Committee on Education and the Workforce also voted 23-16 last Thursday to move the Protecting Student Athlete’s Economic Freedom Act to the House floor. It’s the furthest a bill focused on college sports has advanced in more than five years.

The legislation would codify that athletes are not employees of an institution, conference or association.

“First of all, the bill you talking about is the Protecting Student Athlete’s Economic Freedom Act. That’s six words. Anytime you got more than three words to name a bill, it’s not going to work,” Moglia emphasized.

“I’m not a fan of that. No. 2, they make such a big deal about – the issue here is the integrity, it’s the structure, it’s all the things. So whether or not you call somebody an employee or student, who gives a shit. It’s ridiculous. You run it the way you’re supposed to run it. And see what I would do, by the way, if you had a PCAA, well then my student-athlete they are a professional student-athlete. That’s so simple and easy to me. But I’ve been hearing for three years, ‘Are they employees?’

“Oh, my God, who cares what you call them? Get the damn thing straight.”