University of Utah unveils first-of-its-kind revenue plan for athletics department

The University of Utah revealed a first-of-it-kind plan Tuesday to infuse hundreds of millions of dollars into its athletic programs amid the ever-changing landscape of college sports.

The school intends to create a for-profit company with a private equity firm that has expertise in sports, entertainment and media through its 2-year-old University of Utah Growth Capital Partners Foundation.

It would mark the first university partnership with a private equity firm in college sports.

Basically, the university would spin off the commercial side of sports into a new entity called Utah Brands & Entertainment, including the revenue rights to licensing, events, multimedia, sponsorships, ticketing and trademarks. The foundation would be the majority owner.

New York-based Otro Capital, which, according to its website, “invests in strategic businesses within the sports ecosystem with strong intellectual property and opportunity to scale through a hands-on, operational approach,” would be the minority owner.

The new venture is expected to generate at least $500 million in capital, according to Yahoo Sports, which first reported the story Tuesday morning.

University of Utah officials would not confirm that figure. But president Taylor Randall said the “platform that will allow multiple millions to come into the athletic program at various points in time. Right now, we need an infusion. We may need an infusion just before the Olympics.”

Randall and athletic director Mark Harlan presented the private equity plan to the school’s board of trustees Tuesday morning.

“We wanted to be aggressive,” Randall told the board.

The board voted unanimously to authorize school administrators to start negotiations with Otro Capital on a deal they don’t expect to finalize until next year.

Administrators said the university needs to be innovative in order to avoid raising student fees, cutting research funds or eliminating some or all athletic programs. Randall said the university is committed to maintaining Olympic or non-revenue sports.

“This will give our institution, particularly our athletic institution, the upside it needs to thrive in the new revenue-sharing and NIL era,” Randall told reporters after the board meeting. “It also allows the other missions of our university to thrive.”

Randall acknowledged there is risk in the plan but there’s an “equal risk of not doing anything.”

As currently proposed, a seven-member board headed by the university’s athletic director would govern Utah Brands & Entertainment, which would include stadium and events, production and broadcasting, hospitality, partnership and licensing, brand content and finance. Some athletic department employees would move to the entity.

Coaches and athletes will remain with the athletics department.

The announcement comes as Kyle Whittingham reportedly contemplates retiring after 21 seasons as head football coach. He was to have informed the university of his plans last Friday. Whether the new private equity partnership figures into his decision isn’t known.

Harlan said he intends to meet with head coaches of all sports on Thursday to talk about what’s coming for university athletics with the revenue plan. He declined to say whether Whittingham would be at the meeting.

Who is Otro Capital?

Otro Capital’s portfolio includes a $200 million investment in the F1 team Alpine Racing; FlexWork Sports, a sports event and marketing company, and Two Circles, a fan and data analytics platform that partners with sports-rights holders. Before starting the firm in 2023, its founders worked in executive roles for NBA, MLB, NHL and NFL franchises.

One of the founders, Alec Scheiner, has a long history as a sports investor and team executive, working as president of the Cleveland Browns and senior vice president of the Dallas Cowboys. He was the point person for Legends Hospitality, a corporation providing food, merchandise, retail and stadium operations for venues and companies worldwide.

Another founder, Brent Stehlik was the previous president of OneTeam Partners and worked as the chief revenue officer for the Cleveland Browns.

Harlan said Otro isn’t just investors but operators who know the sports industry. “That is what unlocked all of this for me,” he said. “This was folks that really got it.”

According to a 2024 buyoutinsider.com story, Otro was targeting $500 million for a sports-focused investment fund. The company has pitched its college plan to other schools — one specifically in the Big Ten — before Utah expressed serious interest, per Yahoo Sports.

Impact of the House v. NCAA settlement

Beginning this past summer, universities are allowed to directly pay their athletes. The House v. NCAA antitrust settlement provided a revenue-sharing plan that permits schools to distribute up to 22% of the average athletic department’s income to players in all sports. That comes to about $20.5 million for the 2025-26 season, increasing 4% over the next decade.

While that money would come through Utah’s proposed private equity deal, the school would still control how it’s distributed to players.

Harlan said the plan is an “extreme boost” to NIL.

“This allows us to now really in our recruiting process, in our retainment process to really show what we are surrounding our student-athletes with going forward,” he said.

Under the House settlement, the NCAA will pay nearly $2.8 billion in back damages over the next 10 years to athletes who competed in college at any time from 2016 through the present. Utah’s share of that payment is $1 million a year.

Donors, media rights fees, sponsorships and ticket sales only go so far as college athletic departments face increasing costs to field teams. Many donors and boosters are also starting to experience “donor fatigue” with the collectives that facilitate NIL deals for athletes. Enter private equity firms at both the university and athletic conference levels to fill funding gaps, enhance brand value and provide capital to cover costs and fund rosters.

Harlan said the university wouldn’t have the ability to keep up with costs if it did nothing.

“As we penciled everything out, it just wasn’t adding up,” he said.

The University of Utah is not alone in pursuing private capital for sports departments. Boise State athletic director Jeramiah Dickey told Front Office Sports in June he expected a deal would be in place in the next six months.

“Ultimately, I need to create more assets for my institution and state,” he said. But because the athletic department doesn’t earn as much money as some others, “I have to get that much more creative, which means I have to take that much more risk, and appropriately so.”

Florida State also was reportedly in talks with a private equity firm.

Big Ten private equity plan stalls

The Big Ten proposed a private capital plan to infuse $2.4 billion into its schools’ athletic departments in a deal with UC Investments, which is tied to the University of California system’s pension fund. In exchange for a 10% stake in what would be called Big Ten Enterprises, each of the conference’s 18 schools would receive about $150 million.

But opposition from Michigan and USC have stalled the proposal.

In a November letter to Big Ten commissioner Tony Petitti, Rep. Haley Stevens, D-Mich., warned such an agreement would be a “dangerous expansion of private equity influence over our nation’s universities, harming the quality of college sports and the integrity of university governance.”

NCAA president Charlie Baker cautioned schools and conferences about potential deals with new equity sources, per The Associated Press.

“My message to everybody on this would be really simple: ‘Be really careful,’” he said in October at a Big East roundtable on the future of college basketball.

Congress could also weigh in.

Rep. Michael Baumgartner, R-Wash., introduced a bill to prevent colleges from entering into agreements with private equity or sovereign wealth funds that give those entities ownership stakes or profit-sharing rights in athletic departments. It would have multimedia rights, ticketing, premium seating and other commercial rights.

Colleges, he said, aren’t pro franchises.

“College sports serve an educational mission — and they’re sustained by billions in annual public subsidies and tax advantages,” Baumgartner said in a press release in October. “Assets under the control of universities should be managed in service of that public, educational mission — not carved up as a new asset class for private equity, hedge funds or foreign sovereign wealth funds."