How The Big Ten Private Equity Deal Could Play Out

A Changing Landscape

For over four years the business of college sports has been evolving in response to law suits aimed at compensating athletes for the value they bring to universities, athletic conferences, and the NCAA. The latest iteration has the Big Ten athletic conference considering a private equity partnership to provide funds and expertise to the conference and its member universities in the wake of the House v. NCAA settlement where each university allocates $20M+ to athletes. This move is not supported by all member universities and appears to be on hold as a result. Is this option a power play by the athletic conferences or a much-needed infusion of cash and solutions for university athletic programs? That debate continues, but here are primary factors for college sports leaders to consider.

Potential Benefits

1. Large infusions of capital

   • The Big Ten could ink a ~$2 billion capital deal (or similar magnitude) via a new business entity (sometimes referred to as “Big Ten Enterprises”) to monetize media rights, sponsorships, etc.

   • This kind of upfront cash can help schools/directors cover costs such as athlete compensation (name/image/likeness/NIL), facility upgrades, or debt servicing on stadiums.

   • It may allow schools with smaller budgets in the conference to “lift up” through shared largesse rather than each going it alone.

2. Access to business expertise and commercial growth

   • Private‐capital firms often bring skills in analytics, commercialization, venue development, and sponsorship marketing that many athletic departments may lack.

   • By creating a consolidated entity (e.g., a conference-wide business arm), the Big Ten could gain scale and bargaining power in media and sponsorship markets.

3. Stability and competitive positioning

   • With landscape changes (e.g., athlete compensation, streaming rights fragmentation, conference realignment threats), having a large capital injection may provide strategic insulation and long‐term horizon.

   • It may enable the conference to commit to long-term grant-of-rights agreements and lock in member stability. For example, the deal reportedly would extend the Big Ten’s grant of rights through 2046.

Potential Risks / Downsides

1. Mission and institutional alignment issues

   • Colleges and universities are mission-driven (education, research, student welfare), whereas private equity is typically profit-driven. The risk is misalignment between those goals.

   • Entrusting outside investors with a stake in media rights or sponsorship may raise concerns about losing control or compromising non‐profit status.

2. Loss of autonomy and long‐term constraints

   • Some deals require long commitments or give up future upside in exchange for upfront cash — locking in terms that may become disadvantageous if the business environment changes. For example, critics say the Big Ten deal may require giving up ~10% of future revenue in exchange for immediate cash.

   • Schools may have less flexibility for future direction, realignment, or renegotiation of media deals because they’re bound by grant‐of‐rights or other contractual locks.

3. Tax‐, governance-, and public perception issues

   • Lawmakers and oversight bodies are raising questions about how private investments may affect the tax‐exempt status of university athletic operations or whether the nonprofit character is compromised.

   • There’s a risk of backlash from alumni, boards, faculty, and fans who feel that collegiate athletics are being “sold” or too heavily commercialized.

4. Financial risk and opportunity cost

   • Upfront cash is seductive, but if the future revenue streams (media rights, sponsorships, etc.) don’t grow as expected, the institution may be handing off significant value for less than the long‐term worth.

   • Large universities within the Big Ten may not need money from private equity so it does not make fiscal sense to do so.

   • Private-capital investors typically expect returns and may push for cost‐cutting, asset monetization, or other business tactics that may conflict with athletic or academic goals (e.g., reducing “non-revenue” sports).

Specific Considerations for the Big Ten

• The Big Ten proposal reportedly involves each of its member schools getting a nine-figure upfront payment (e.g., over $100 million) in exchange for the conference granting rights through ~2046 and giving a ~10% stake in the new entity to the investor.

• Some member schools, such as University of Michigan and University of Southern California, are publicly dissenting, citing concerns about rushed decision‐making, giving up future upside, and the long‐term implications.

• The Big Ten is still exploring structure; no final deal has yet been approved.

• Because the Big Ten has a strong brand and revenue base, schools in the conference may feel more empowered (or threatened) in this context: empowered because they might secure large capital; threatened because they may be giving away future growth.

Key Questions

In short:

• If done well, private-capital (or quasi‐private investment) can provide the resources to help a major conference like the Big Ten stay competitive in a rapidly changing collegiate athletics environment (streaming rights, athlete compensation, global branding).

• But if done poorly, it may erode institutional autonomy, mission alignment, and long‐term value for the member schools and the student-athletes.

• For a conference like the Big Ten, the key questions are:

  1. What exactly is being given up (percentage of future revenue, length of grant of rights, control over assets)?

  2. What governance safeguards exist to ensure the academic mission and student-athlete welfare are protected?

  3. What is the true valuation and growth potential of the assets being monetized, and—is the upfront cash worth the trade?

  4. Are member schools aligned in appetite and risk-tolerance, or will dissent (as we’re seeing) undermine the unity needed for success?

Download a Private Capital Deal Evaluation Scorecard to better understand the pros and cons:

Private Capital Deal Evaluation Scorecard.

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And always consult your tax, legal and business professionals.

While seeking private equity partnerships may provide benefits, other creative options could retain autonomy and future earnings for universities while providing much-needed resources. Leveraging new revenue streams in addition to traditional broadcast rights and tickets to athletic events is one option. Learn more about utilizing athlete data as a revenue stream here.