By Mark Seavy 

The recent infusion of private equity into the University of Utah’s athletic department created a new gameplan for college sports. 

But how that will affect brand licensing is very much open to debate. While the University of Texas, Kansas University, and the University of Michigan are among those schools where licensing is under the athletic department, other licensing programs instead act as a part of a school’s legal, development, or other department.  

Yet one thing is for sure—with the growing competition for media rights and sponsorships as well as the expansion of Name, Image, and Likeness (NIL) licensing for college athletes, schools are changing their strategies. 

Clemson University (Clemson Ventures), the University of West Virginia (Gold & Blue Enterprises), Michigan State University (Spartan Ventures), Texas Tech (Texas Tech Athletic Partners), and the University of Kentucky (Champions Blue), for example, created separate limited liability companies (LLCs) within their athletic program to serve a similar purpose as private equity firms.  

In the case of Clemson, the LLC it formed in 2024 generated in 15 months more than double the gross and net revenue it produced in the final year of a seven-year agreement with third-party multimedia rights company JMI Sports.  

“The jury is still out on how widespread these business models will be but it is clear that colleges and universities, especially the athletic departments, are looking for revenue sources in a lot of different places,” a sports licensing executive said. “So far it is a mixed bag of whether conferences and commissioners will actually partner with private equity.” 

To start with, the typical private equity model of investing for three to five years and then cashing out is hard to deploy at public universities. 

With that in mind, the changes typically wrought by new investors—like reorganizing the business—will be bypassed in favor of revenue sharing, licensing executives said. But there have been attempts at private equity in the sector prior to the University of Utah’s deal with Otro Capital, which was negotiated over two years.  

For example, the Big Ten Conference paused plans in November on a $2.4-billion private equity agreement with UC Investments (a branch of the California pension funds) after opposition from the University of Michigan and the University of Southern California. And Florida State University has had discussions with Sixth Street Partners during the past few years that have yet to yield an agreement. 

At the same time, a number of athletic departments are implementing comprehensive licensing and multimedia rights deals that cover sports and the entire school, said Jeff Schemmel, CEO at consulting firm College Sports Solutions and a former athletic director at San Diego State University.  

“This may well open the door to more institution-wide deals since there is more money involved,” Schemmel said. “Licensing and multimedia rights partners are always looking for more than just athletics. If you can reach 30,000 students on campus, they want to do that. Every sports program big or small is looking for new revenue and if they can figure out ways to partner with private equity and realize gains, everyone will look at the business model.”  

Much of the growing private equity interest stems from new business plans, including NIL, which was implemented in 2021 following a U.S. Supreme Court decision, and revenue sharing, licensing executives said. NIL brought new funding for revenue sharing given that schools had little time initially to rework their budgets, said Kristi Dosh, Founder of the Business of College Sports.  

The key to the ongoing growth of these types of agreements will be a return that makes both parties happy, executives said, whatever form that may take.  

“People look at private equity from a different lens. [It] is a business ownership model, and I am not sure that is the way it is being looked at in college sports,” a college licensing director said. “It will not be, in the traditional sense, private equity. It feels more like an investment partner in developing opportunities and having a revenue sharing arrangement. It will not be private equity buying a school or conference and then going in and rearranging and streamlining things with an eye toward maximizing their return and flipping the business five years down the road.”