The Big 12 Conference is reportedly considering a private equity investment, which would be the first of its kind in college sports.
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The Big 12 Conference is reportedly considering a private equity investment of up to $1 billion, which would be the first of its kind in college sports.
The Irving-based conference could receive a capital infusion of between $800 million and $1 billion from Luxembourg-based private equity giant CVC Capital Partners in exchange for a 15% to 20% stake in the league, CBS Sports reported, citing “multiple” unnamed sources. Some of that money would go directly to the Big 12’s 16 member teams.
CVC has a total of 193 billion euros in assets under management, roughly $207.4 billion. The company made a presentation to the Big 12 during the league’s spring meetings in Dallas, according to CBS Sports.
According to CBS Sports, a source said the talks are “pretty serious,” but not all conference representatives are sold. The report also noted that it’s unclear when the deal will be completed or when money will start flowing into the conference.
Neither the Big 12 nor the CVC responded to requests for comment.
If the deal goes through, it would mark a major milestone as the first private equity investment in college sports. Private equity firms have become increasingly interested in sports. At the professional level, the NBA, MLB and NHL all allow some form of private equity investment. The NFL is also considering changing its ownership rules to allow limited private equity investment, and Commissioner Roger Goodell said in May that the league’s owners could vote on a new policy later this year.
The interest has even spilled over into college sports: Jerry Cardinale, founder and CEO of RedBird Capital, spoke about private equity opportunities in college sports at a Sports Business Journal event in Las Vegas in December. RedBird and Weatherford Capital, founded by former Florida State quarterback Drew Weatherford, have since launched a partnership called College Athletics Solutions that plans to invest $50 million to $200 million each in a select group of colleges, The Wall Street Journal reported in May.
Meanwhile, college sports is undergoing major changes, including chaos caused by student-athletes being paid for their name, image and likeness rights and further confusion caused by conference restructuring that will see the Big 12 expand from 10 teams a few years ago to 16 by the time football season begins in the fall.
And now, the landmark court case, a $2.8 billion settlement between the House and the NCAA, allows institutions to pay players directly, opening up the door for private equity to get involved. Universities in the four biggest conferences — the Big 12, Big 10, SEC and ACC — could have to split up to $22 million a year with their players. Rising player compensation costs mean universities need even more money.
For the Big 12 Conference, the investment from CVC will help ensure the conference’s long-term financial and competitive stability, according to CBS Sports.
Big 12 teams currently earn $31.7 million a year from media rights deals with Fox and ESPN, while Big Ten teams, which have the largest contracts with Fox, CBS and NBC, earn $75 million a year. CBS Sports reported that the private equity partnership would help close the gap.
In other Big 12 Conference news, the Sports Business Journal reported the conference is in discussions with potential sponsors, including Allstate, about naming rights deals.
