Key Takeaways
- • The Kansas Board of Regents unanimously adopted a policy at a special Friday meeting requiring officials at the six state universities to notify the board's CEO and chair of "material discussions" with private equity or venture capital firms about athletics partnerships.
- • All contracts and agreements between university athletic departments or athletic-affiliated corporations and private equity or venture capital entities must receive Board of Regents approval before implementation.
- • The policy follows the Big 12's April ratification of a five-year financial arrangement with College Athletic Solutions, a partnership between RedBird Capital Partners and Weatherford Capital.
- • Regents general counsel John Yeary said the disclosure requirement would not be triggered by an initial meeting between a university and a private equity firm.
Summary
The Kansas Board of Regents amended its policy to require officials at the state's six public universities to notify the higher education board's leadership of discussions about partnerships between intercollegiate athletic departments and private equity or venture capital firms, according to Kiowa County Press. The board adopted the rule unanimously at a special meeting held on a Friday, rather than waiting for its regular meeting scheduled for Wednesday in Wichita. The reason for the special session was not explained in the report.
The policy requires notice to the Board of Regents' CEO and board chair before "material discussions that are likely to lead to a proposed transaction, agreement or arrangement" occur. The term was intentionally left vague. Regent Blake Benson of Pittsburg questioned whether the phrase would be universally understood. General counsel John Yeary said the requirement would not be triggered during an initial meeting, but would apply if interest continued and a deal appeared likely to proceed. Regent Peter Johnston, a Salina attorney, said the ambiguity was beneficial and that institutions need "a free hand to a great degree." Separately, all contracts between athletic departments or athletic-affiliated corporations and private equity or venture capital entities must be approved by the board before implementation. An earlier draft that would have given the board oversight of coaches' contracts, conference agreements, or name, image and likeness deals was revised to exclude those areas.
The policy comes amid the Big 12's April ratification of a five-year financial arrangement with College Athletic Solutions, a partnership between RedBird Capital Partners and Weatherford Capital. RedBird is a private equity firm with ownership ties to sports programming networks, and Weatherford holds a stake in IMG Academy. The agreement does not transfer university or conference governance authority, ownership interests or revenue rights. The Big 12 office received $12.5 million to promote commercial development, and each of the 16 conference universities was offered a $30 million line of credit at an interest rate near 10%, repaid through conference revenue sharing. Kansas State and most other Big 12 schools said they would not accept the credit line, while the University of Kansas had not decided.
Board chair Alysia Johnston of Edna said the board wants to support the universities given their short-term athletics financial pressures without jeopardizing long-term interests. She added that the board could enter executive session to protect proprietary information or trade secrets of companies seeking business with university sports programs, and that final votes would be subject to the Kansas Open Meetings Act.
The policy requires notice to the Board of Regents' CEO and board chair before "material discussions that are likely to lead to a proposed transaction, agreement or arrangement" occur. The term was intentionally left vague. Regent Blake Benson of Pittsburg questioned whether the phrase would be universally understood. General counsel John Yeary said the requirement would not be triggered during an initial meeting, but would apply if interest continued and a deal appeared likely to proceed. Regent Peter Johnston, a Salina attorney, said the ambiguity was beneficial and that institutions need "a free hand to a great degree." Separately, all contracts between athletic departments or athletic-affiliated corporations and private equity or venture capital entities must be approved by the board before implementation. An earlier draft that would have given the board oversight of coaches' contracts, conference agreements, or name, image and likeness deals was revised to exclude those areas.
The policy comes amid the Big 12's April ratification of a five-year financial arrangement with College Athletic Solutions, a partnership between RedBird Capital Partners and Weatherford Capital. RedBird is a private equity firm with ownership ties to sports programming networks, and Weatherford holds a stake in IMG Academy. The agreement does not transfer university or conference governance authority, ownership interests or revenue rights. The Big 12 office received $12.5 million to promote commercial development, and each of the 16 conference universities was offered a $30 million line of credit at an interest rate near 10%, repaid through conference revenue sharing. Kansas State and most other Big 12 schools said they would not accept the credit line, while the University of Kansas had not decided.
Board chair Alysia Johnston of Edna said the board wants to support the universities given their short-term athletics financial pressures without jeopardizing long-term interests. She added that the board could enter executive session to protect proprietary information or trade secrets of companies seeking business with university sports programs, and that final votes would be subject to the Kansas Open Meetings Act.
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