University of Utah Launches College Sports’ First Private Equity Partnership

By Max Adox

In late 2025, the University of Utah became the first school to greenlight a private equity deal. 

Money is now flowing through college sports in ways similar to the professional leagues. Now that every top-tier school has begun facilitating name, image, and likeness deals through collectives and paying players via revenue sharing, the coaching and facilities “arms race” has heated up. Universities are facing a new reality: spend more or stop being competitive. Most schools have opted for the former. Unfortunately, most athletic programs simply don’t have the necessary funding to maintain competitive teams in the modern era, but they will do anything to remain relevant. That money needs to come from somewhere. For a few years, the solution was in wealthy donors, called boosters. Recently, schools have started to think about taking things to the next level: Private equity.

What is Private Equity?

At their core, private equity (PE) firms raise capital to acquire companies. After gaining control, they put their finance and operations experts to work to improve the company’s performance and increase value. Their goal is to eventually sell the company at a higher price, often generating returns of roughly 20–30% above the original purchase price. 

If you’re a glass-half-full person, think about PE as a house flipper for companies: Buying businesses that need fixing up, renovating them, and selling them for more than their original investment. If you’re more of a glass-half-empty person, however, think about PE like a farmer buying scrawny pigs, fattening them up with whatever feed is cheapest or most convenient, and selling to the highest bidder. 

Overview of the Agreement

The two players in this deal are the University of Utah Athletic Department and Otro Capital, a sports-focused private equity firm based in New York City. 

The University of Utah is a public institution and therefore owned by the state and its residents, and they’re not selling. So, first and foremost, this deal had to create something that Otro Capital could actually buy and make money on. The entity that was created is called Utah Brands & Entertainment LLC. 

The new LLC is essentially a subsidiary of the athletic department and will house some of its key revenue streams, such as ticket sales, corporate sponsorships, fan experience, and university trademarks and licensing. In exchange for an estimated $500 million, Otro will receive a minority stake in the new for-profit company and will therefore share in its returns. The PE firm will have input on how these revenue streams operate and evolve, and will work with the university to grow the Utes’ brand. 

In an open letter, school president Taylor Randall and Athletic Director Mark Harlan made it very clear that “the university is not selling parts of our Athletics Department,” and are keeping full control of administrative decisions (like adding and cutting sports, a long-feared consequence of PE involvement), coaching decisions, facilities operations, and management of student-athletes. That control is required by the NCAA to remain eligible for competition. 

Hey, Wasn’t the University of Michigan Close to Reaching a Similar Private Equity Deal?

Yes, sort of. The Big Ten conference was close to negotiating a deal with UC Investments, the California University system’s investment fund. That deal also involved the Big Ten creating a for-profit company to house the media and sponsorship rights for the entire conference. UC Investments was offering $2.4 Billion for a 10% cut of the new company’s revenue each year, for up to 20 years. The deal fell through after facing opposition from the University of Michigan and the University of Southern California, with Chair of the University of Michigan Board of Regents Mark Bernstein calling the deal a “payday loan.”

The Future

Universities and private equity firms have been flirting around the edges of a deal for a while now, and they’ve finally taken the first step in what could be a long and complicated relationship.

How much of an effect will this deal have on other schools looking for an influx of cash, given simply that somebody has finally decided to bite the bullet and go first? Could this be the first domino to fall? Questions also arise on the private equity side of the deal as well. How might a company that has a history of dealing with financially stable pro sports teams work out in the unstable world of college athletics?  Can private equity companies provide real, long-term, substantive benefits to an athletic program? 

The deal between the University of Utah and Otro Capital will be a test for both parties and may very well lay the groundwork for the future financial management in college athletics.