Private Equity Is Now in College Sports…Utah’s Bold $500M Deal Explained

College sports just crossed a historic threshold.
For the first time ever, a major university has accepted private equity funding into its athletic department — and the ripple effect could transform the entire industry.

Earlier this week, the University of Utah finalized a bold partnership with Otro Capital, becoming the first athletic department in the country to inject outside equity into its commercial operations. At a moment when revenue sharing, NIL payments, and expanded scholarship rules are pushing athletic finances to the breaking point, Utah’s move signals a major shift in how college sports might be funded going forward.

Here’s what’s actually happening, why it matters, and why many experts believe this may be a model other schools quickly follow.

A First-of-Its-Kind Structure: Utah Brands & Entertainment

To execute the partnership, Utah is creating a new for-profit company called Utah Brands & Entertainment, housed within the school’s foundation but operating independently of the traditional university entity.

Under the deal:

• Utah transfers its revenue-generating assets — ticketing, sponsorships, licensing, hospitality, merchandise, and trademarks — into the new company.
• Operational control of these business units shifts to Utah Brands & Entertainment, but competitive control (coaching decisions, roster management, hiring, and firing) remains entirely with the university.
• Otro Capital becomes a minority equity investor in the company.
• Supporters and major donors can also invest, with the combined structure expected to produce $500M+ in fresh capital.

Because the entity sits outside the nonprofit university, it avoids the public disclosure and FOIA requirements that typically apply to state schools — one reason the exact valuation and cash amount may never be public.

Why Utah Did This: Athletic Departments Are Bleeding Money

The timing of Utah’s deal isn’t a coincidence. College athletics finances are collapsing.

Several forces created the crisis:

1. House v. NCAA Back Payments

The $2.8B settlement for past NIL violations hits every school. Utah alone must contribute $1M per year for 10 years, while NCAA distributions decline to cover the association’s portion.

2. New Revenue-Sharing Era

Schools can now directly pay athletes up to $20.5M annually, with the cap rising 4% each year. Within a decade, payouts could exceed $33M per school.

3. Unlimited Scholarships

Roster limits are gone. Every player can now receive a scholarship — across every sport — doubling or tripling scholarship expenses at many schools.

The Result? Massive Deficits Everywhere

Even powerhouse brands are struggling:

• Ohio State: –$38M
• Alabama: –$28M
• UCLA: –$52M
• Rutgers: –$42M
• Colorado: –$27M (even with the Coach Prime effect)

Collectively, the Big Ten alone spent $160M more than it generated last year.

At many universities, “balanced budgets” only happen because school presidents backstop losses with academic dollars — meaning taxpayer or student funds quietly subsidize athletics.

Utah wanted a solution that did not drain academic budgets, cut Olympic sports, or raise student fees. That pushed them toward private capital.

Why Utah’s Private Equity Deal Is Different — and Why It Matters

Most prior private equity proposals in college sports failed because they essentially functioned like high-cost loans. Schools got a large upfront check, but PE firms demanded guaranteed returns tied to future revenues.
Universities took the risk, investors took the upside.

Utah flipped the model.

What Makes This Structure Unique:

• Otro Capital puts actual equity at risk. They profit only if revenues grow.
• Utah maintains majority control of the board — four seats to Otro’s two, plus one donor seat.
• The university can buy back Otro’s stake in the future.
• No obligation to cover investor losses. If revenues fall short, Otro absorbs the downside.
• Competitive integrity remains with the school — coaches, athletes, schedules, positions, and roster decisions stay untouched.

In short:
Utah gets the upside of professionalizing its business without the financial downside of traditional private credit deals.

Why Otro Capital Is the Key Ingredient

Calling Otro a “two-year-old New York PE firm” undersells what the group actually brings.

Its founders — Alec Scheiner, Brent Stehlik, Niraj Shah, and Isaac Halyard — previously built and operated global sports businesses at RedBird Capital, one of the most powerful sports investment firms in the world.

Their résumés include:

• Building Legends Hospitality with the Dallas Cowboys
• Leading commercial operations for the Cleveland Browns
• Advising Fenway Sports Group
• Scaling OneTeam Partners from $44M to $177M EBITDA in three years
• Growing valuations for global sports properties across NFL, MLB, EPL, and PGA Tour Enterprises

This isn’t a financial engineering play — it’s an operational play. Otro is betting it can dramatically grow Utah’s commercial revenues through:

• Dynamic ticket strategies
• Corporate partnership expansion
• Hospitality & premium experience programs
• Licensing and merchandising optimization
• Professionalized data-driven marketing
• Event and venue monetization

College sports, in many ways, still operate like it’s 2005. Otro brings a 2025 professional sports toolkit.

What Comes Next — And Why Other Schools Are Watching Closely

Multiple schools (Florida State, Boise State) and major conferences (Big Ten, Big 12) have explored private equity, but none closed a deal — until Utah.

If Utah’s model works, it creates a template:

• Universities keep control
• Academic budgets stay protected
• Private investors bring expertise
• Revenue grows without cutting sports or raising student fees

In an era where athletic departments are required to pay more — but cannot reliably earn more — Utah’s structure may be the first realistic path to sustainability.

This deal is not about short-term cash.
It’s about modernizing the business of college sports.

And if Otro succeeds in growing Utah’s revenues the way they’ve grown those in the NFL, MLB, and global soccer, the school’s deficit may disappear — and the rest of the country may rush to copy the model.

Bottom Line

The University of Utah didn’t just accept private equity money.
They engineered an entirely new way for college sports to operate.

It is the first attempt to fuse:

• Private-sector operational excellence
• University-controlled governance
• An equity-based long-term growth model

If it works, Utah will be financially untouchable — and college sports will never be the same again. So, if you’re into all things sports news in the U.S.A., you should totally follow us!