Utah Turned to Private Equity — The Next Era of Athletic Funding?
Dec 16, 2025, 1:54 PM | Updated: Dec 17, 2025, 10:18 am
SALT LAKE CITY— Faced with a rapidly changing college sports economy, the University of Utah agreed to a first-of-its-kind private equity partnership with Otro Capital.
In an era where schools must begin sharing millions in revenue directly with athletes under the House v. NCAA settlement and manage ever-higher operational costs, Utah is monetizing future commercial income now rather than waiting for it to trickle in over years.
By spinning off its commercial rights into Utah Brands & Entertainment, the Utes are securing up to $500 million in capital upfront to stabilize budgets, invest in facilities, enhance fan experiences and compete more effectively in the NIL and revenue-sharing era.
What once would have been unthinkable — private investment in a public university athletic program — now reflects hard financial realities that most athletic departments simply cannot ignore.
What Utah’s PE deal actually is
Contrary to some media spin, Utah is not selling its athletics department. Instead, it is creating a for-profit company called Utah Brands & Entertainment LLC in partnership with Otro Capital — marking a first major private equity deal in college sports.
The university retains majority ownership and full control over coaches, scheduling, compliance, and player decisions, while Otro provides capital and commercial expertise.
Under this structure, commercial revenue streams — including ticketing, concessions, media rights, event operations, licensing, and sponsorships — are housed in the new entity. Utah will also allow select donors to invest equity alongside Otro.
Why would Utah pursue such a deal?
As the business side of college athletics continues its seismic shift, insiders coming out of last week’s Sports Business Journal conference in Las Vegas laid bare what everyone in the industry is quietly admitting: the old fundraising playbook isn’t working anymore.
It’s against that backdrop — where collective bargaining is now a real conversation and private equity is poised to dominate the conversation in 2026 — that the University of Utah’s landmark partnership with private equity firm Otro Capital makes cold-blooded financial sense.
Shannon Terry — founder and CEO of On3 & Rivals, a major NIL/college sports media and data platform — posted a thread summarizing key college sports business dynamics after attending the Sports Business Journal conference last week. Here is what Terry said in his tweet:
4 quick takes from the world of college sports business after a visit to the SBJ Conference in Las Vegas this past week.
Wealthy donors who drove early NIL Roster Value deals for athletes are growing tired at a record rate. Always thought to be a bridge, but donors are over it.
Big Ten commissioner Tony Pettit’s stock is sliding over his handling of and lack of transparency in the $2.4B private equity deal. Worth watching.
Collective Bargaining went from almost no chance to now a real possibility. It is becoming more of a how-to-do-it vs. should-it-be-done.
Private equity isn’t going away. PE will remain the top storyline in the business of college sports in 2026.
Outside of Tony Petitti’s stock, let’s dive into that more in-depth:
Donor Fatigue in the NIL Era
Early NIL collectives were funded by wealthy donors eager to help athletes via “Roster Value” deals. But many donors are retreating because returns on those investments are unclear and ongoing financial demands are high — especially now that athletic budgets must also support revenue sharing and increased roster costs.
NIL was always supposed to be a bridge, not a permanent sponsorship model. But without a sustainable commercial engine behind it, donor fatigue can lead to smaller pipelines of capital, forcing schools to look at institutional revenue streams and outside investors to fill budget gaps.
This pressure is one reason schools have considered and are considering private capital structures. It seems college athletics has reached a point where donor-funded NIL is maxed out, and universities must adopt new revenue infrastructure to keep programs competitive.
Collective bargaining on the horizon?
Collective bargaining — once considered a fringe or unlikely outcome in college sports — is now being discussed as a feasible next step, not just a philosophical debate. The era of NCAA amateurism has ended, and with revenue sharing, the next frontier is how athletes gain representation and voice in compensation structures.
If collective bargaining becomes a how instead of a should, that signals a tectonic shift: athletes may gain legal and organizational leverage akin to professional players, and institutions must prepare for new labor dynamics.
Is college athlete collective bargaining simply inevitable now that revenue sharing is real — and how would that reshape NIL, scheduling, and compensation norms?
Private equity is in college sports
Private capital isn’t going away, it won’t be a blip — it’s becoming the central storyline in college sports business. Utah’s deal with Otro Capital is only the beginning; conferences and schools are exploring creative funding models (Big Ten Enterprises, American RISE Ventures, etc.) to unlock liquidity and restructure commercial rights.
This follows broader trends where conferences and universities are pushing for commercial arms and partnerships that look more like professional sports business entities.
Whether it’s LLCs, revenue-sharing arms, or venture partnerships, private capital is reshaping the business model of college athletics — and schools that don’t adapt risk falling behind financially and competitively.
Why immediate capital matters – Rev Share, NIL
Here’s the key, the financial demands on college athletic departments have shifted dramatically in just a few years:
- Revenue Sharing With Athletes: Under current settlement terms, schools will soon be required to share a meaningful percentage of media, ticketing, and sponsorship revenue directly with athletes. That’s a permanent recurring cost that departments must fund.
- NIL Is Still Paying Out: While donors and collectives fueled early NIL compensation, many are now experiencing donor fatigue, and booster pools aren’t an infinite resource. Departments that thought they could continue relying solely on donor generosity to fund NIL and competitive gaps are finding that model unsustainable.
- Competitive Recruiting Costs: Competing in a Power 4 conference now means investing in top facilities, analytics, coaching support, travel, and scholarship support — all cash demands that pile up before games are played. Having capital on hand now lets Utah invest in infrastructure, branding, and competitive recruiting without hollowing out other parts of the budget or repeatedly hitting up donors. That’s the strategic logic behind monetizing future revenue today.
At its core, Utah’s private equity partnership is simply financial engineering. The university is securitizing future revenue streams — converting predictable income that would normally come in over years into capital today. That cash can then be deployed immediately to meet new cost pressures and strengthen the program across multiple fronts.
Traditionally, those dollars trickle in each year — and athletic departments budget and spend based on annual cycles. Given these rising costs, simply waiting for revenue to arrive “later” becomes a liquidity problem — you need cash now to stay competitive.
By partnering with a private equity firm and spinning off its commercial rights into a new entity (Utah Brands & Entertainment LLC), Utah essentially sells a slice of its future revenue rights in exchange for upfront capital. Unlike a typical university department, this new entity is structured so that:
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Utah still controls all program and on-field decisions.
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The for-profit arm can operate like a business partner with corporate sponsors and vendors.
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It’s not governed by public records laws in the same way, meaning its internal commercial deals may stay private.
Risks and Unknowns
To be clear, this is anything but risk free. Private equity partners expect returns, which could influence strategic priorities over time.
Utah’s deal reportedly includes common investor protections that can act as vetoes on certain decisions, even if the university retains the steering wheel. And if the firm exits in 5–7 years, Utah may need to buy back the stake at a premium.
There are also regulatory risks, such as pending federal legislation that could restrict these types of deals, potentially forcing unwinding at a huge cost. There’s already been congressional blowback but Utah moved forward on this deal fully aware and mindful of what was at stake.
Bottom Line
College sports have fundamentally changed. Revenue-sharing, expanded NIL, and rising costs have rendered the old funding model obsolete.
Utah’s move makes financial sense because it provides the liquidity required in a transformed college sports economy — where revenue obligations are higher, donor fatigue is real, and competitive recruiting costs are rising — without burying itself in traditional debt or relying solely on boosters. It’s a strategic shift toward a business model that reflects the realities of college athletics today.
The private equity partnership with Otro Capital is a forward-looking financial strategy aimed at sustainability, competitiveness, and long-term growth in this new era. Whether it becomes a model for other programs — or a cautionary tale — remains to be seen, but there is a belief Utah provided a blueprint for others to follow.
