Key facts
- Many college athletic programs are hesitant to partner with private equity firms due to concerns about financial risks and loss of control.
- The NCAA House v. NCAA settlement, requiring revenue sharing with players, has increased the need for funding, driving interest in private capital.
- Some private equity ventures, like Collegiate Athletic Solutions (CAS), offer capital in exchange for a return on investment rather than an ownership stake.
- Wealthier programs and conferences are generally less interested in private equity deals, viewing the financial returns as insufficient for the control relinquished.
- Boise State and Utah are among the institutions actively exploring or finalizing deals involving private capital or new for-profit arms.
Many college athletic departments are approaching deals with private equity firms with caution, despite a pressing need for funds. While some firms are actively seeking to invest, schools are hesitant due to concerns about relinquishing control, potential financial risks, and a misalignment between private capital objectives and educational missions. Some athletic directors, like Mark Jackson of Northwestern, have stated their programs are not in a position to explore such offers.
The recent NCAA House v. NCAA settlement, which mandates revenue sharing with players, has intensified the financial pressure on athletic departments, making private capital more appealing. However, wealthier programs and conferences, such as the Big Ten (which is actively pursuing offers), find the concept less attractive, viewing the financial gains as insufficient for the control they would cede. The Big Ten's proposed deal with UC Investments for a 10% stake in a spin-off group for $2.4 billion faced opposition and ultimately fell through.
Firms like RedBird Capital Partners and Weatherford Capital have launched ventures such as Collegiate Athletic Solutions (CAS) to provide capital to athletic departments, sometimes structured as loans rather than direct ownership stakes. CAS has not yet announced any deals, with founder Drew Weatherford noting that schools were exploring traditional revenue streams while awaiting the outcome of the House case. However, he has observed renewed interest from schools across various budget levels since the settlement was finalized.
Institutions like Boise State are establishing arms to explore private capital, with athletic director Jeramiah Dickey indicating a potential investment within six months, though not necessarily a traditional ownership stake. Utah is also moving forward with a nine-figure arrangement with Otro Capital, creating a new for-profit entity to manage business operations like ticketing and NIL sales. Despite the potential benefits of much-needed funding and professionalization, legitimate questions remain about long-term revenue loss, fan and taxpayer protection, and decision-making authority when investors and administrators clash.