Utah Entering Landmark Deal with Private Equity Firm Expected to Raise $500 Million
While everyone was busy debating Notre Dame’s exclusion from the College Football Playoff (CFP) and arguing over the Pop-Tarts Bowl, the University of Utah was shaping the future of college athletics.
According to a report from Ross Dellenger of Yahoo Sports, the University of Utah has entered into a $500 million partnership with a private equity firm to create shared ownership of a for-profit entity that will manage athletic activities and financial functions outside of the traditional university setting.
The deal is expected to be approved Tuesday after review by the Utah Board of Regents.
This is Otro Capital, a sports private equity firm based in New York.
At the heart of the deal is a shared management group that will include an Otro Capital management team and athletic department staff. The combination will be known as Utah Brands & Entertainment LLC.
The group will operate within the university’s foundation, and the school will retain majority ownership and decision-making power over the partnership. Otro will receive a percentage of the joint venture’s annual turnover.
“The deal comes with an exit strategy in five to seven years, and the university has the right to purchase Otro Capital’s stake,” reports CBS Sports.
Utah Brands & Entertainment will absorb much of the decision-making and responsibilities associated with traditional athletic departments. Donors who wish to participate in and benefit from the new venture will be able to acquire stakes in the company. It is hoped that with the large initial infusion of capital and contributions from donors, the new company, Utah, will find itself at the top or at least among those at the top of college football’s financial mountain.
However, safeguards have been put in place. An exit strategy over a five to seven year horizon is in place. Additionally, the university has the right to purchase Otro Capital’s stake.
Schools and conferences became free to negotiate deals with private equity firms following the 2024 House v. NCAA case. While several schools and athletic conferences have explored the idea, and some even came close to signing on, Utah is the first school to sign a formal agreement with a private equity firm.
