BleedGopher
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Per Yahoo Sports:
Private equity has officially arrived in college athletics.
The University of Utah is on the cusp of striking the industry’s first partnership with an equity firm in a marriage that features a nine-figure capital infusion and the creation and shared ownership of a for-profit entity to operate athletics outside of the university.
The new venture is expected to generate as much or more than $500 million in capital — a groundbreaking and innovative move that may pave the way for more schools and conferences to pursue such a concept.
Finalization of the project is expected soon pending authorization on Tuesday from the University of Utah Board of Trustees. The board is granting the university permission to move forward with the agreement with Otro Capital, a New York-based sports private equity firm.
Multiple officials with knowledge of the project spoke to Yahoo Sports under condition of anonymity.
The endeavor with Otro Capital is more than just a nine-figure infusion of cash.
At the center of the project is the creation of a private, independent offshoot of the athletic department — Utah Brands & Entertainment LLC — in a first-of-its-kind partnership between a university athletic department and an equity partner. An executive team from Otro Capital, combined with athletics department personnel, will lead the creation and operation of the new company.
The university retains majority ownership and decision-making authority of Utah Brands & Entertainment. Otro marries the capital infusion with a team of experienced operators. A president from outside the university will preside over the company and report to a board, chaired by Utah athletic director Mark Harlan, with seats for trustees and Otro executives.
The project includes a fascinating wrinkle. The university is offering a prominent group of donors the ability to purchase a stake in Utah Brands & Entertainment. Already, university officials have culled a small donor base to generate millions in purchase agreements. The more than $500 million capital figure includes both the nine-figure cash infusion from Otro as well as those capital commitments from donors.
Utah Brands & Entertainment will house most of the components traditionally held within the university’s athletic department, including many athletic personnel and divisions. However, fundraising will remain with the school.
The new company’s primary goal is to generate more revenue across an assortment of areas, including ticketing, concessions, corporate sales and sponsorships. Charged with overseeing and operating the revenue-share pay system for Utah athletes, the new entity provides the department with more flexibility and freedom considering it will operate separate from a public university.
sports.yahoo.com
Go Gophers!!
Private equity has officially arrived in college athletics.
The University of Utah is on the cusp of striking the industry’s first partnership with an equity firm in a marriage that features a nine-figure capital infusion and the creation and shared ownership of a for-profit entity to operate athletics outside of the university.
The new venture is expected to generate as much or more than $500 million in capital — a groundbreaking and innovative move that may pave the way for more schools and conferences to pursue such a concept.
Finalization of the project is expected soon pending authorization on Tuesday from the University of Utah Board of Trustees. The board is granting the university permission to move forward with the agreement with Otro Capital, a New York-based sports private equity firm.
Multiple officials with knowledge of the project spoke to Yahoo Sports under condition of anonymity.
The endeavor with Otro Capital is more than just a nine-figure infusion of cash.
At the center of the project is the creation of a private, independent offshoot of the athletic department — Utah Brands & Entertainment LLC — in a first-of-its-kind partnership between a university athletic department and an equity partner. An executive team from Otro Capital, combined with athletics department personnel, will lead the creation and operation of the new company.
The university retains majority ownership and decision-making authority of Utah Brands & Entertainment. Otro marries the capital infusion with a team of experienced operators. A president from outside the university will preside over the company and report to a board, chaired by Utah athletic director Mark Harlan, with seats for trustees and Otro executives.
The project includes a fascinating wrinkle. The university is offering a prominent group of donors the ability to purchase a stake in Utah Brands & Entertainment. Already, university officials have culled a small donor base to generate millions in purchase agreements. The more than $500 million capital figure includes both the nine-figure cash infusion from Otro as well as those capital commitments from donors.
Utah Brands & Entertainment will house most of the components traditionally held within the university’s athletic department, including many athletic personnel and divisions. However, fundraising will remain with the school.
The new company’s primary goal is to generate more revenue across an assortment of areas, including ticketing, concessions, corporate sales and sponsorships. Charged with overseeing and operating the revenue-share pay system for Utah athletes, the new entity provides the department with more flexibility and freedom considering it will operate separate from a public university.
Sources: University of Utah nearing landmark private equity deal expected to generate $500 million
The new venture would generate a massive amount of money for the school in a groundbreaking move that may pave the way for more schools and conferences to do the same.
Go Gophers!!
