To quote Bob Dylan, the times are a-changing.
Drastically.
There’s all of the coaching changes at blue blood programs. The changes to the transfer portal. The changes to NIL and revenue-sharing. Don’t forget about the upcoming changes to the playoff format.
And now there’s the addition of private equity to college sports.
Per Yahoo! Sports senior college football writer Ross Dellenger, the University of Utah is close to finalizing a deal to create the first partnership with an equity firm. It would include an capital infusion of at least nine figures and would operate athletics business and financial elements outside of the traditional university framework.
Dellenger added the new venture “is expected to generate as much or more than $400 million in capital – a groundbreaking and innovative move that may pave the way for more schools and conferences to pursue such a concept.”
The deal with Otro Capital hasn’t been finalized, but is expect as soon as Tuesday when the University of Utah Board of Trustees meets.
More details on the partnership
Part of the deal will include the creation of private, independent “offshoot of the athletic department” called Utah Brands & Entertainment LLC.
From Dellenger’s story, “The university retains majority ownership and decision-making authority of Utah Brands & Entertainment. Otro marries the capital infusion with a team of experienced operators. A president from outside the university will preside over the company and report to a board, chaired by Utah athletic director Mark Harlan, with seats for trustees and Otro executives.”
Prominent donors will be able to purchase a stake in Utah Brands & Entertainment. In exchange for the large capital infusion at the start, Otro Capital will earn a large percentage of annual revenues generated from the new company.
This idea isn’t anything new. You may recall somewhat recently (or not considering the craziness of the last month) the Big Ten was nearing a deal with an equity firm for $2.4 billion capital infusion before big name schools like USC and Michigan shot it down.
What does this mean for Ole Miss?
Right now? Nothing.
But it sets the precedent for Ole Miss to partner with a private equity firm in the future, should it choose to do so. It also could lead the SEC to creating its own deal like the Big Ten was close to pulling the trigger on.
Now, whether or not this is a good thing for college sports, I don’t know. I’m not smart enough about the financial world to say one or another.
It could, though, be an opportunity for Ole Miss to become a school head coaches won’t leave to go someplace else like, oh I don’t know, LSU.
