The tipping point for when college sports fans finally say “enough is enough” apparently hasn’t arrived yet. That’s despite the average Power 4 conference football game taking a record one hour plus of commercial breaks this season, fired coaches landing an unprecedented $180 million in buyout money during the past three months, and growing postseason playoff tournaments across several sports dragging championship runs out longer than ever before.
Any backlash against the increasing commercialization of college sports, in fact, seems far off. If customers speak with their eyeballs and wallets, they’ve made one thing clear to advertisers and university athletic departments across the country: We want more.
Never one to miss an opportunity to profit off a thriving market, private equity operators are openly negotiating for their piece of the pie; according to experts and observers, conferences and universities seem increasingly eager to oblige such outside investment.
The Big 10 Conference has been mulling a 20-year, $2.4 billion deal with the University of California’s pension fund in which the league would create a private for-profit offshoot called Big Ten Enterprises. The deal would award a 10 percent stake in the new business to UC Investments that the Big 10 would pay back over the next two decades with interest, in the form of a loan. The proposed deal would inject an average of $135 million in upfront payments to each of the conference’s 18 schools.
Likewise, the Big 12 nearly inked two separate private equity deals last year. Despite not landing either, the conference has left the door open to possible suitors in the future. Individual schools, notably UCLA, Penn State and Florida State have spoken with the likes of major PE firms Elevate, Sixth Street and Arctos Partners, while University of North Carolina reps have traveled as far as Saudi Arabia exploring deals with the country’s infamous Public Investment Fund.
“Everybody’s trying to figure out why exactly these power conferences and schools need the money,” explained Jason Stahl, a former University of Minnesota professor who founded the non-profit College Football Players Association. “They say it’s to keep up with Name, Image and Likeness. But the Big Ten and other major conferences already have gargantuan media contracts.”
Stahl, whose fledgling advocacy group includes dozens of current and former players, is like many observers of college sports wondering to what lengths schools will go to secure revenue for athletes. Especially while their claims of being underfunded don’t align with their spending behavior.
“If you can hand a coach a $50 million buyout, I don’t think it’s legitimate to claim poverty when it’s time to spread out $21 million to players on the field,” he said.
A slippery slope
Private equity prioritizes return on investment to benefit stakeholders. That means third-party firms looking to pump cash into college sports recognize a major potential for profit. And why not? Multiple reports suggest annual athletic department revenues across many schools in Power 4 conferences (Big 10, SEC, Big 12 and ACC) now exceed $200 million per year, growing as much as 60 percent since 2015 with no signs of slowing down.
The momentum is organic, but placing private equity’s foot on the gas pedal would only accelerate the revenue-grabbing nuances of college sports that already grind consumers, said Stahl and Karen Weaver, a professor in University of Pennsylvania’s Graduate School of Education.
Weaver, who studies the intersection of college athletics, higher education and public policy, said to expect longer commercial breaks, higher ticket prices and more premium access packages that benefit only the wealthiest college sports consumers. Meanwhile, everyday fans who make up the majority of customers could eventually be priced out, or just decide to turn away from commercial fatigue. Weaver’s biggest concern is athletic departments moving further away from universities’ missions as academic institutions.
“There’s already a massive squeeze taking place and Wall Street pressure would only turn the screw,” she said. “It’s a slippery slope because you’ll price out a lot of alumni and local fans who just won’t be able to afford $600 or $800 for a ticket.”
Ted Tatos, a sports economist for Los Angeles-based EconONE contends the ship has long since sailed with regards to athletics departments upholding the mission of public universities as vessels for education. The slow commercial “takeover” began over a century ago, starting with bowl games, radio rights deals, under-the-table payments to athletes and donor fundraising, then continued in the form of TV contracts, conference realignments, sportswear deals and NIL. Private equity is just the latest step in college sports’ ambition to chase money, he said.
Tatos, who also taught economics at the University of Utah for four years, believes the academic and athletics arms of major colleges are now moving in “completely opposite directions.” The strictly profit-seeking nature of private equity threatens to hollow up any claims of higher educational purpose that sports still have.
But Joel Maxcy, a sports business professor at Drexel University whose expertise also centers on the economics of college athletics, pushed back. Maxcy noted that most of the private equity proposals circulating in recent months are not sales of teams or conferences in the sense of ownership. The deals instead read more like bond financing than buying stock, characterized by large loans repaid over time with interest.
“Servicing debt is far safer than giving up ownership, which risks giving up more control,” he said. “And for big schools like Michigan, Alabama, Georgia, and Ohio State, for example, that control question is the red line.”
But even with loan-style deals, schools will be pressured to maximize revenue every season. And if college sports, especially football and basketball, keep moving toward pure commerce, the entire industry will eventually have to confront the elephant in the room: Why pretend that sports is somehow still a curricular activity?
Moving closer to collective bargaining
Regardless of whether private equity ultimately improves or deteriorates the college sports landscape, scholars and consultants interviewed for this article all believe third-party capital will push athletes closer to unionizing. They said collective bargaining, or at least some sort of employee classification, is unavoidable as college sports become full-time paid jobs.
Stahl pointed to the NCAA repeatedly failing to win blanket protections in Congress, courts blowing holes in the amateurism model, and state laws opening the NIL floodgates. All that remains is what universities have resisted: sitting down and negotiating with athletes and, almost certainly, a union representing them.
The CFBPA head framed the crossroads with private equity as a possible pivot from individual to collective empowerment. Since NIL deals and an open transfer portal changed the pay-for-play landscape in July 2021, Stahl noted that only a small, top slice of stars have reaped the financial windfall. The vast majority of college athletes, especially outside of football and basketball, still don’t make any money. Plenty of others have fallen prey to promised NIL cash, signing with a new school only to see the rug pulled out from underneath them.
“Unionizing and collective bargaining would help remedy all of that,” Stahl said. “The next four years should be about bargaining for the floor: minimums, multi-year guarantees, and protection against being run off through the transfer portal.
“If fans want players to hang around for multiple years, the players need employment contracts,” he added. “They need a collective bargaining agreement, like the ones in professional sports leagues. Because make no mistake, college sports are professional sports.”
Maxcy agreed that formalizing athletes’ status as employees could also help solve other NIL-era issues, serving to tighten up transfer portal windows, make enforceable contracts and promote a more honest accounting of where the money goes.
Tatos suggested the honest endpoint may be a clean split between schools and their sports programs, turning athletic departments into separate, for-profit athletic entities. The model would let universities license their branding, so the for-profit athletics teams could still use the same stadiums, fight songs, and the uniforms.
The only difference — and a significant one, at that — Tatos said, is that players wouldn’t be required to enroll as students.
“This is work, and it’s a bona fide labor market at this point,” he said. “It’s time we treat it like that.”
Maxcy sees the legal and financial sense in a spin-off model, but worries about the long-term branding effect. Explicitly detaching teams from their universities’ missions risks eroding the “college” in college sports, particularly the pageantry and school-based identity that keeps high-paying alumni and fans loyal. Still, he admits the growing college sports market speaks for itself. Even as the product has become way more commercial, audiences continue to grow.
“It seems like no matter what happens, people are still watching in record numbers,” he said.
Consumers will ultimately decide the future of college sports
Fans complain about NIL chaos, transfers and wall-to-wall ads, then break viewing records. They grumble about four-hour telecasts, but then buy expensive streaming subscriptions. They dislike how college sports have become too professional, but then pay ticket prices that rival those of pro leagues.
No wonder private equity wants in. Same for conference commissioners and university presidents who preach tradition and integrity while they simultaneously cash record checks.
As Maxcy put it, consumer behavior doesn’t match the discourse, and the numbers don’t show an unhappy customer base. As long as ratings keep rising, playoffs keep expanding and media partners keep jockeying for broadcasting rights, someone will happily finance the next upgrade. Incentives will only change when consumer behavior changes, he said.
Weaver called today’s climate ‘The Roaring ’20s’ of college sports, a frenzy of unregulated investment before the inevitable reckoning. At some point, enough fans will reach a breaking point and decide to no longer participate in the increasingly commercial industry formerly known as college sports, she predicted. That means withdrawing their time and money.
“If and when fans decide enough is enough, the people on top will have to listen,” Weaver said. “But for as long as there’s potential to extract money, private equity will continue to want a piece of the pie.”
