University of Utah Approves Private Equity Partnership for Athletics Programs

The University of Utah is set to redefine college sports finance through a first-of-its-kind partnership with Otro Capital, introducing a new private equity partnership structure that purports to provide significant capital to its collegiate athletic operations.

On December 9, the Board of Trustees of the University of Utah (Utah) unanimously approved a transformative partnership with New York-based private equity firm Otro Capital (Otro) expected to generate upwards of $500 million in capital for the university (consisting of the committed infusion from Otro and committed capital from donors).

The agreement marks the first time a major university athletic department will partner with a private equity investor as a minority stakeholder in a newly formed corporate entity—Utah Brands & Entertainment LLC—dedicated to managing revenue-generating athletic operations. The move could result in a major shift in the organization of collegiate athletics and could serve as a blueprint for other institutions seeking innovative financial solutions for their sports programs—a key priority across the industry in the post-House settlement era.

THE CURRENT INVESTMENT LANDSCAPE IN COLLEGE SPORTS

Private equity firms have been eyeing college sports for several years, seeking entry points to invest in an industry facing mounting financial stressors driven by revenue-sharing requirements and the rising costs associated with maintaining competitive athletic programs. However, actual equity investments in collegiate athletics have largely failed to materialize, even as interest has grown on both sides, due to the regulatory complexities that come with investing in nonprofit and public institutions.

To date, private credit agreements (such as Elevate’s $500 million initiative backed by private-equity firm Velocity Capital Management and the Texas Permanent School Fund that made headlines earlier this year) have been the primary vehicle for universities to infuse cash into their operations. These agreements more closely resemble highly customized loans, with terms based on the specific needs and characteristics of the schools, that provide cash but offer clear operational parameters for all parties. As schools and investors seek higher upside in potential win-win transactions, many have pointed to equity investments as a logical progression. For a broader look at investment approaches and regulatory considerations, please see our July 11, 2025 Insight examining private equity’s evolving role in the college sports landscape.

UTAH’S INNOVATIVE PARTNERSHIP

The Utah-Otro partnership will be facilitated by the creation of Utah Brands & Entertainment LLC, a new corporate entity formed for the purpose of managing the university’s revenue-generating athletic operations. While the specific details of the partnership have not been announced, the terms that have been shared thus far align with the traditional framework of private equity investments in the sports industry. The university will maintain majority ownership and decision-making authority of the new entity, while Otro will receive a significant minority stake in exchange for both funding and operational and industry expertise. Otro’s expertise will supplement Utah’s existing capabilities within the athletic department, aiming to optimize all aspects of athletic revenue streams across ticketing, concessions, sponsorships, and licensing deals. The parties have also contemplated a potential future exit for Otro, and the university will retain the right to repurchase the private equity firm’s ownership stake should it decide to sell.

The governance structure is intended to preserve the university’s educational mission, with Utah Athletic Director Mark Harlan serving as chair of the board of directors of the new entity, which will include upward of seven director seats—the athletic director and three other members appointed by the university’s foundation would be joined by two members from Otro and another university supporter/investor. Utah will reportedly remain in control of major decisions like hiring and firing coaches and scheduling. Although the new corporate entity will distribute name, image, and likeness (NIL) payments to athletes, the university itself will control the amounts allocable to athletes. The company will be required to submit audits to Utah’s trustees.

The concept of a for-profit affiliate entity—the corporate structure Utah Brands & Entertainment LLC will adopt—has been implemented previously as a solution to some of the structural and regulatory challenges that have limited equity investments so far. Several universities (including University of Kentucky, Clemson University, Michigan State University, and Texas Tech University) have established holding companies to manage athletic operations, but none have involved direct private equity investment until now.

The Utah-Otro partnership could be a potential catalyst for broader industry change with the opportunity to pave the way for similar investments across the country. Given the extent to which private equity firms have recently emphasized their interest in college sports, industry insiders anticipate more deals will follow a similar structure in the months to come (subject to understanding the specifics of the Utah-Otro deal not yet disclosed).

IMPLICATIONS FOR ATHLETIC DEPARTMENTS AND UNIVERSITIES

While the potential for private equity investment in collegiate athletics offers many advantages, there are a few key considerations that university administrators and investors will need to keep in mind as they structure these deals moving forward.

First, while the affiliate entity structure alleviates some compliance challenges, athletic departments must still follow National Collegiate Athletic Association (NCAA) rules and regulations. For example, all decision-making authority within these new entities must remain with the university. Utah and Otro took specific efforts to ensure compliance, including clearing the partnership with NCAA officials prior to final approval.

In addition to compliance-related challenges, parties on both sides of potential deals will need to navigate the nascent stages of these partnerships with appropriate levels of diligence. Parties should discuss key terms including control rights, economic provisions, investor protections, and restrictions to develop a robust understanding for how the partnership will operate as it develops. Similarly, investors will want to review all relevant university agreements, including leases, concessions, sponsorships, official provider and media rights agreements, as well as the university’s IP portfolio, to evaluate existing cash flows, confirm ownership, and identify potential opportunities. Ensuring alignment across strategic, operational, and financial priorities will help to inform the governance structures established to guide these new entities.

KEY TAKEAWAYS

The University of Utah’s partnership with Otro Capital represents an important moment for collegiate athletics, introducing the first test case for partnerships with private equity as a viable solution to longstanding financial challenges. As financial pressures mount and the need for sustainable revenue streams continues to grow, other institutions are likely to consider similar partnerships, potentially reshaping the landscape of college sports for years to come and generating sizeable returns for universities and investors. It will be essential for parties on both sides of these transactions to balance strategic, compliance, and financial priorities to help these investments recognize their full potential.