Private equity firms are increasingly courting college athletic programs, offering new avenues for funding amid rising costs and evolving revenue models in collegiate sports. However, many universities remain cautious about accepting such investments due to concerns over mission alignment, financial risks, and the impact on student-athletes.
The shift toward private equity involvement in college sports has been accelerated by a 2021 U.S. Supreme Court decision allowing student-athletes to be compensated for their play. This ruling prompted institutions to transform their sports programs into entertainment enterprises featuring star athletes who command higher salaries and may transfer schools for better pay. According to projections, college athletes nationwide are expected to earn nearly $3.8 billion in the 2026-27 academic year. Operating a competitive football roster alone can cost up to $50 million per season.
In response to mounting financial pressures, some universities have begun exploring private equity partnerships. The University of Utah recently finalized an agreement with Otro Capital to form Crimson Brand Partners, a venture responsible for managing commercial aspects of its athletic department. This entity oversees event operations, branding, licensing, sponsorships, ticketing, and digital media, while also pursuing endorsement opportunities for individual athletes. The university retains authority over coaching, recruiting, athlete support, and fundraising. The partnership includes an initial investment of approximately $200 million and brings on board executives with professional sports backgrounds, including CEO Matt Webb, formerly with the New Orleans Saints and Pelicans.
Utah’s athletic director, Mark Harlan, acknowledged the risks involved but emphasized the long-term challenges of competing financially without new strategies. University officials devoted significant time to legal and administrative measures to ensure compliance with tax laws and institutional governance. Otro Capital can recoup its investment through dividends or equity sales in the Crimson Brand venture.
Conversely, other institutions and conference leaders remain wary of private equity’s role. According to two individuals familiar with a separate credit line offered to Big 12 schools, the 10 percent interest rate has so far deterred any borrowing. Aaron Horvath, deputy athletic director at the University of Notre Dame, said private equity approaches are common across major conferences, but Notre Dame has declined such partnerships. He highlighted concerns that profit-driven investors might shift focus away from the welfare of student-athletes.
Val Ackerman, commissioner of the Big East Conference, expressed skepticism about private equity involvement in college sports. She pointed to the high returns sought by investors and worried such financial pressures could conflict with educational and athletic priorities. Ackerman also underscored the broader issue of the pay-to-play model, suggesting that the current scramble for funding calls for systemic reform rather than piecemeal solutions.
As collegiate athletics continue to evolve in the post-NIL (name, image, likeness) era, universities are balancing the need to increase revenue with the desire to maintain control over their programs and uphold their core missions. Whether private equity will become a widespread funding mechanism remains uncertain amid competing views on its benefits and risks.