Two questions are puzzling me. Why would 2U take over programs that Pearson (1/2 of the new offerings) offloaded because they were not profitable? And why would USC (40 million) or any school have to pay 2U if 2U is the one breaking with the school? 2U spin is that they are leaving the school not the other way around.
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Bro wrote a whole novel just to say 2u's model might not be the best lmaooo. You think anyone knows wtf or cares about wtf is going on? I don't get fired and as long as I don't again the next round I could give two sh--s and neither should you
So, I am definitely not a kool-aid drinker and the skeptic has DEFINITELY won with me lol. But having said that, my understanding of the USC payment to 2U has to do with the structure of their contracts. Basically, with any new school/program, 2U fronts the millions of dollars of cost to build the thing out from wharever stage it was currently at. Sometimes, they build it out with the school from scratch. So with the endless meetings with the schools to help them determine what they want to see for things like marketing, curriculum, student counts, ect., 2U basically just flexes their staff's expertise and does the grunt work on behalf of the school for degree programs. Because of all the dollars 2U spends at the front end of the deal, they won't start seeing a profit for years. My guess is that that 40 mill payout is whatever both parties agreed on in order to break 2U's very long contract business model. I'm sure there's more nuance involved, but that's what was explained to me when I started at the company. This is why I'll die on the hill that the platform strategy was a sh-t idea. The second we started moving away from the core values of the company for the sake of cringey CEO ambition, things got convoluted and hairy.
Lesson to be learned
Every day is a feast when you have millions in banks. You operated your company without full transparency and disclosure, your partners were sued because of lack of transparency and disclosure and now they are willing to pay millions to sever their relationships with you. You broke the spirit of thousands of your subordinates who had faith in your ability to operate an honest and successful business, meanwhile you still receive an unreasonable amount of money to be a 'special advisor', while your beloved and cherished team of underlings spend their holidays in turmoil and despair. Your prodigal tendencies on the backs of others is selfish and will hopefully follow you throughout the rest of your life. Blessings.
Well said, Post ID: @zbd+1pERVyec !
The answer would be obvious if you you were paying attention…