Sports
Wetzel: Beware, college sports, private equity has arrived
The University of Utah approved a groundbreaking private equity deal Tuesday that promised hundreds of millions of dollars for the school’s athletic department, which like nearly every athletic department in the country is running an annual deficit.
This was a historic vote. The Utes need money. Otro Capital of New York, a firm that seeks investments in sports, sees an opportunity. The company is offering more than $400 million to the school, a source told ESPN, plus Otro’s operational expertise, to generate new revenue streams for the department.
“I think we can go from surviving to thriving,” Utah trustee Bassam Salem said before the vote, echoing the optimism of the moment. He then expressed the shared concern: “Are there risks? Yes. Am I concerned? Yes.”
Everyone should be; not just at Utah but across college athletics, where deals like these are expected to become more common.
The core problem though, which the smart folks in private equity have certainly realized, is this:
College athletics doesn’t have a revenue problem.
It has a spending problem.
Even as revenue goes up and up from richer media deals, expanded playoffs and modernized operations, costs continue to soar because of revenue sharing with athletes, coaching salaries, increased travel and debt on ever-more opulent stadiums and locker rooms.
At some point, spending has to be addressed. Private equity firms, renowned for acquiring investments with an eye toward cutting costs, consolidating and reselling for a profit, are likely to do it with a different mindset than college administrators.
An Otro spokesman declined comment on this deal, which isn’t expected to close until 2026.
Typically, though, it would seem that private equity companies aren’t really interested in college athletics — which lose money at nearly every school — but rather college football and, to a lesser degree, men’s college basketball, both of which turn significant profits at the major level.
Utah athletics, for example, lost $17 million in fiscal 2024 after spending $126.8 million against $109.8 million in revenue, per school documents. That’s a 15.8% deficit.
However, the Utes football program turned a $26.8 million profit. Men’s basketball followed at $2.6 million. The remaining 17 programs lost $21.2 million, per documents.
It’s Business 101: If costs need to be cut, then nonprofitable divisions get the axe, perhaps completely. In this case, that could mean Olympic sports teams.
Not everything at a university should have to make money, of course. Every school has a marching band. Yet that isn’t how private equity traditionally works — this is business, not academia. What’s the cost analysis on the clarinet section?
That’s the crossroads that is coming.
No one will say for certain whether sports will be scaled back or even cut, and perhaps they won’t be, especially in the near term. Business is business though.
Final details of the Utah-Otro deal will be hashed out before closing in 2026. But the basics are this: In exchange for the cash infusion, Otro will get a minority share of the newly created, for-profit entity Utah Brands & Entertainment. The university’s foundation will own the majority.
That entity will handle sponsorships, NIL, ticket sales and other business-side items. The university’s argument is that Otro’s expertise will increase revenue. Utah, meanwhile, will control scheduling, hirings and firings and handling the student-athletes.
Utah was in the red despite, it noted, “ticket sales, number of donors, and total donations … [improving] year-over-year.” The department already collects $6.2 million in fees from students courtesy of a $82.69 per-semester charge, according to documents.
Essentially, something needed to be done.
“There’s equal risk of actually not doing anything,” school president Taylor Randall said at Tuesday’s meeting.
So Utah is getting a cash infusion and some operational expertise in exchange for … ?
That’s the question.
Utah says it will have governing control over Utah Brands & Entertainment. “Decisions regarding sports, coaches, scheduling, operations, student-athlete care and other athletics matters will remain solely with the athletics department,” athletic director Mark Harlan said.
Generally speaking, though, across college athletics, a business approach to an athletic department is going to lead to uncomfortable and previously politically-loaded conversations about cutting expenses.
That’s because no school has consistently managed to generate enough revenue to cover ever-rising costs.
Even mighty and massive Ohio State, which brought in $254.9 million of revenue in fiscal 2024 (or nearly 2.5 times the amount of Utah), according to school documents, ran a $37.7 million deficit while operating 32 athletic programs.
It’s one reason Ohio State supported a $2.4 billion private-capital deal between the Big Ten and UC Investments before the proposal stalled out last month because of opposition from Michigan and USC. Mark Bernstein, chair of Michigan’s Board of Regents aptly noted that until runaway spending was addressed, the deal was simply akin to a “payday loan.”
College athletics has done much of this to itself, mind you.
Costs have been out of control for decades. The facility “arms race” has been financially destructive everywhere. Leagues have expanded, causing spikes in travel for even the smallest of programs. Motivated by winning, almost no one has kept a latch on coaching salaries, buyouts or staff sizes — in football especially, but every program as well.
While there is certainly plenty of fat that can be cut from football or men’s basketball, those are the profitable divisions that generate the money that keeps everything potentially viable. While Title IX compliance remains a factor, the emotional decisions about the value of other teams have been kicked down the road.
It’s how not just Utah, but nearly everyone else, has gotten to the point that these deals look like a life preserver.
Yet private equity is, usually, motivated to turn a profit to recoup (and then some) its initial investment.
How long until they, unmoved by arguments about the ethereal value of, say, having a tennis team, or that swimmers work as hard as football players, don’t push for bottom-line decisions — namely some of these teams need to go?
SYDNEY: As Twenty20 cricket competitions explode around the world, Australia’s Big Bash League is struggling to chart a vision for the future, after plans to privatise its franchises stalled.
Cricket Australia chief Todd Greenberg is adamant that outside investment is necessary to shore up the game’s financial future and keep pace with a boom in other well-funded leagues played in a similar time slot.
They include the UAE’s ILT20, South Africa’s SA20, and New Zealand’s privately-backed NZ20 scheduled to start in December 2027, all bidding for the best local and overseas players.
“If those salary caps (of other leagues) are significantly higher than ours over the coming years, and players can earn more in those areas, then players will follow those. That’s a real risk to us,” Greenberg told local media.
“I want to make sure that for Australian cricket, our ambition is to have a league that runs at the key part of the year for us, which is the December-January window, and it’s the best T20 league in the world at that moment in time.
“To do that, we have to have a significant amount of money in our salary caps to attract not only the best players from overseas, but to retain and attract our own best players.”
He added: “The concept of bringing private capital to cricket is inevitable at some point.”
While not a direct competitor as it runs in a different window, the benchmark Indian Premier League has seen massive success thanks to wealthy benefactors, with England’s The Hundred also on a roll after an influx of private capital.
But it is a thorny issue in Australia with an initial proposal to sell stakes in each of BBL’s eight teams stalling last month amid concerns about a loss of control for the game’s local custodians.
While the Victorian, Western Australian and Tasmanian cricket associations voiced support and South Australia said it was open to the idea, New South Wales and Queensland rejected the move.
Queensland Cricket, which controls the Brisbane Heat, said it was worried about player payments skyrocketing to unsustainable levels, and that private owners may not be as invested in the grassroots game.
Cricket NSW, which operates the Sydney Sixers and Sydney Thunder, was similarly concerned that it could be detrimental to how the sport is governed and how local players are produced.
‘Sugar hit’
There are also fears about an Indian takeover, with the most likely buyers seen as the rich IPL team owners who have invested in other short-form competitions around the globe.
Former Australian captain Greg Chappell is in the “No” camp, arguing that the BBL belongs to the states and communities that have built it into a successful and well-attended product.
While acknowledging the commercial realities, he said selling it off was not the answer.
“The moment you introduce private ownership at scale, you introduce a set of priorities that may not always align with the long-term health of the game,” he wrote in the Sydney Morning Herald.
“Private investors, however well-intentioned, answer to shareholders, not to Australian cricket.”
Andrew Jones, a former head of strategy at Cricket Australia who was instrumental in the launch of the BBL, is similarly unconvinced.
“A one-off sale is a sugar hit, not a solution,” he said in The Australian newspaper, arguing that revenues can be better grown through sponsorships, wagering, ticketing, and more focus on commercialising the women’s game.
Despite scepticism, Greenberg remains confident and is now eyeing a hybrid ownership model.
This would allow the BBL franchises keen to sell stakes to do so while allowing those against to maintain complete ownership.
“If we end up not going together at the same time, can we still extract the same level of revenue, and can we extract the same level of value?” he said.
“I think we can, but I’ve got to do the work to satisfy a recommendation that would ultimately go to the members and our board.”
Sports
NASCAR’s Truck Series and O’Reilly Autoparts Series honor Kyle Busch with moments of silence at Charlotte
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The NASCAR world is paying tribute to Kyle Busch this weekend, and that includes some classy ones from two series in which the late driver had a lot of success.
While Busch — who passed away Thursday after “severe pneumonia [that] progressed into sepsis” — had been a full-time driver in NASCAR’s top series, the Cup Series, for more than 20 years, he still competed occasionally in both the O’Reilly Auto Parts Series and the Craftsman Truck Series.
He was especially known for his dominance in the Truck Series, winning 69 of his 184 races, and at one point owned a team. In fact, the final win of Busch’s career came just under a week before his death in a Truck Series race at Dover.
ZERO BS. JUST DAKICH. TAKE THE DON’T @ ME PODCAST ON THE ROAD. DOWNLOAD NOW!
Kyle Busch, driver of the No. 7 HendrickCars.com Chevrolet, is introduced before the NASCAR Craftsman Truck Series SpeedyCash.com 250 at Texas Motor Speedway in Fort Worth, Texas, on May 1, 2026. (James Gilbert/Getty Images)
On Friday, the Truck Series was in Charlotte as part of the Coca-Cola 600 weekend for a race that Busch was supposed to take part in.
NASCAR, RACING WORLD REACTS TO KYLE BUSCH’S SHOCKING DEATH AT 41: ‘CANNOT COMPREHEND THIS NEWS’
Corey Day was in the No. 7 Chevrolet for Spire Motorsports, the truck in which Busch took his final win, and it was set to start on pole after Friday’s qualifying was rained out.
Kyle Busch celebrates the final win of his NASCAR career at Dover Motor Speedway. (Photo by David Hahn/Icon Sportswire)
Before the race was set to begin on Friday evening, teams and fans held a moment of silence for Busch.
Unfortunately, the race never got underway and was postponed until Saturday morning and then again to Saturday night.
The O’Reilly Autoparts Series, which Busch raced in many times and won many times during his career, also took a moment to remember him before their race at Charlotte on Saturday.
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That race was also suspended due to rain.
There will be some heavy hearts on Sunday when the Coca-Cola 600, the NASCAR Cup Series’ longest race of the year, gets started at 6 p.m. ET.
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While Kyle Busch was a legend in the NASCAR ranks, he was incredibly well respected throughout the world of motorsports.
That’s why one of Busch’s NASCAR numbers — the one I’d argue is most iconic — will make an appearance in the 110th Running of the Indianapolis 500.
Busch had a bunch of numbers across NASCAR’s three national series, but in the Cup Series, he used No. 5, No. 18 and No. 8.
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Kyle Busch used No. 18 during his years with Joe Gibbs Racing. (Isaac Brekken/AP)
For many fans, No. 18 is the number they associate with Busch, as he used it for 15 years, including during both of his championship seasons.
NASCAR, RACING WORLD REACTS TO KYLE BUSCH’S SHOCKING DEATH AT 41: ‘CANNOT COMPREHEND THIS NEWS’
You can close your eyes and picture it on the side of those legendary M&M’s paint schemes.
Well, Sports Business Journal’s Adam Stern shared that Dale Coyne Racing, which runs the No. 18 Honda driven by Romain Grosjean, will display the classic No. 18 used on Busch’s car during his time with Joe Gibbs Racing in the Cup Series.
How about that tribute?
Of course, the numbers are typically trademarked, so as Stern reported, the idea — which came from Fox Sports IndyCar commentator Townsend Bell — required getting in touch with Joe Gibbs Racing.
Busch never raced in the Indy 500 or in the IndyCar Series; however, he did have a lot of success at the Indianapolis Motor Speedway in NASCAR.
NASCAR star Kyle Busch died on Thursday at just 41 years old. (James Gilbert/Getty Images)
His brother, retired NASCAR driver and former Cup Series champ, Kurt Busch, attempted double duty by competing in both the Indianapolis 500 and Coca-Cola 600 on the same day in 2014.
It’s a heck of a tribute from the folks at Dale Coyne Racing with an assist from JGR.
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And while I don’t want to play favorites, wouldn’t it be something to see that No. 18 in Victory Lane?
Grosjean will start Sunday’s race in 24th, which means he has some ground to make up, but anything can happen in the Indy 500.
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