Key Takeaways
- • Private equity investment in college sports will not fully open until clear rules and a predictable governance structure are in place, according to an expert panel at the 15th annual University of Michigan Sport Business Conference.
- • The Big Ten equity deal, which UC Investments had proposed, collapsed last year after reportedly 16 of 18 teams favored it, with Michigan and USC holding out and UC Investments declining to sign without them.
- • Experts view private credit structures as an easier path than traditional private equity for now, while Apollo Sports Capital's Sam Porter cites sponsorship, media rights and ticketing as attractive long-term revenue streams.
- • Investor uncertainty centers on conference realignment, litigation and unclear rights, with Porter asking for "legislation that makes clear how rights will be handled."
- • The bipartisan Protect College Sports Act has passed the Senate and awaits a House vote, with passage not guaranteed; it would double the revenue-sharing cap and address transfers, agent rules and media rights pooling.
Summary
Private equity investment in college sports will not fully materialize until clear rules and a predictable governance structure exist, an expert panel at the 15th annual University of Michigan Sport Business Conference concluded. Despite significant interest from both investors and schools, several transactions have stalled. The most prominent was the Big Ten deal, which fell apart last year. According to the panel's account, 16 of the conference's 18 teams reportedly supported the transaction, but Michigan and USC held out. UC Investments, the University of California system's pension fund that had proposed buying an equity stake in the Big Ten, said it would not sign without those two schools. Smash Sports co-founder and COO Magdalena Kala said that deals can be judged on "process, outcome, and implications," and that the Big Ten transaction drew concerns on all three.
Experts currently see private credit, structured as loans in which investors provide financing, collect interest and are repaid, as an easier route than traditional private equity. Apollo Sports Capital chief strategy officer Sam Porter said private equity firms regard college sports as a "very attractive" asset class because of long-term revenue from sponsorship, media rights and ticketing. However, he added, it is difficult to "thread the needle" given that schools are public institutions with a higher-education mission.
American Conference commissioner Tim Pernetti said there is "plenty of money for the taking," but schools need a "real partner" focused on building revenue and commercial growth. Porter contrasted college sports with professional leagues, where investors deal with established ownership structures, collective bargaining agreements and league constitutions. Pernetti noted that college sports has historically operated under a "not-for-profit umbrella" without investors demanding a return. Porter identified conference realignment and the legal disputes that followed as examples of the uncertainty that deters capital, saying that in college "there's just so much unknown."
The Protect College Sports Act (PCSA), a bipartisan bill recently approved in the Senate, now awaits a House vote, and its passage is not guaranteed. The legislation would double the revenue-sharing cap, attempt to limit cap-circumvention NIL deals, impose a one-time transfer and five-for-five eligibility policy, add agent restrictions, set health and safety and Olympic and women's sports requirements, limit conference realignment and coaching transfers, and allow schools to pool and sell media rights jointly. Pernetti acknowledged the bill is imperfect but said it must pass, warning that without it conferences will "keep getting raided for talent and coaches." The unresolved question of whether athletes should be classified as employees adds further uncertainty for potential investors, and Pernetti said collective bargaining "deserves to be discussed" while acknowledging it would be a major challenge.
Experts currently see private credit, structured as loans in which investors provide financing, collect interest and are repaid, as an easier route than traditional private equity. Apollo Sports Capital chief strategy officer Sam Porter said private equity firms regard college sports as a "very attractive" asset class because of long-term revenue from sponsorship, media rights and ticketing. However, he added, it is difficult to "thread the needle" given that schools are public institutions with a higher-education mission.
American Conference commissioner Tim Pernetti said there is "plenty of money for the taking," but schools need a "real partner" focused on building revenue and commercial growth. Porter contrasted college sports with professional leagues, where investors deal with established ownership structures, collective bargaining agreements and league constitutions. Pernetti noted that college sports has historically operated under a "not-for-profit umbrella" without investors demanding a return. Porter identified conference realignment and the legal disputes that followed as examples of the uncertainty that deters capital, saying that in college "there's just so much unknown."
The Protect College Sports Act (PCSA), a bipartisan bill recently approved in the Senate, now awaits a House vote, and its passage is not guaranteed. The legislation would double the revenue-sharing cap, attempt to limit cap-circumvention NIL deals, impose a one-time transfer and five-for-five eligibility policy, add agent restrictions, set health and safety and Olympic and women's sports requirements, limit conference realignment and coaching transfers, and allow schools to pool and sell media rights jointly. Pernetti acknowledged the bill is imperfect but said it must pass, warning that without it conferences will "keep getting raided for talent and coaches." The unresolved question of whether athletes should be classified as employees adds further uncertainty for potential investors, and Pernetti said collective bargaining "deserves to be discussed" while acknowledging it would be a major challenge.
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