Facing rising costs in college sports, the University of Utah hopes to put the future of its athletics department’s finances in the hands of a new for-profit company backed by a private equity firm.
The U.’s board of trustees will vote Tuesday on whether to approve the deal involving New York private equity firm Otro Capital.
The proposal calls for the creation of Utah Brands & Entertainment, a company to oversee the athletics department’s revenue sources. Otro Capital would be the minority owner of Utah Brands and handle operations such as ticket sales, media, stadium events, concessions, and trademark and licensing matters.
The U., through its nonprofit University of Utah Growth Capital Partners Foundation, would have majority ownership of the company and Utah Athletic Director Mark Harlan would serve as the chairman of its board. The athletics department would continue to oversee student athletes and their scholarships, coaches, fundraising and NCAA compliance.
Otro describes itself as a company with “deep expertise across sports, entertainment, and media.”
University officials have declined to say how much Otro Capital plans to initially invest because the deal has not been finalized. Yahoo! Sports reported the partnership could bring in more than $500 million in revenue. The U. expects the deal to be completed early next year.
(Trent Nelson | The Salt Lake Tribune) The Big 12 Conference logo as the Utah Utes prepare to host the Baylor Bears, NCAA football in Salt Lake City on Saturday, Sept. 7, 2024.
Private equity investors have zeroed in on college athletics in recent years.
In the wake of the House vs. NCAA settlement, colleges can now pay their student athletes up to $20.5 million annually.
That has contributed to significant deficits at schools around the country. Last month, the University of Colorado projected a $27 million deficit for its athletics program. Earlier this year, Ohio State University claimed a $37.7 million deficit.
The Tribune will update this developing story.