University of Utah Board Approves Private Equity Deal to Boost Athletics Department
The University of Utah has made a significant decision to enhance its athletics department by approving a groundbreaking private equity deal. This initiative aims to generate over $500 million through a partnership with Otro Capital, a New York-based equity firm.
Formation of Utah Brands & Entertainment LLC
The University of Utah’s board of trustees unanimously agreed to create a for-profit entity named Utah Brands & Entertainment LLC. This new company will function under the university’s umbrella but separate from the athletics department. Utah will retain majority ownership and full control, while Otro Capital will act as a minority partner.
Financial Impact and Revenue Sharing
- Projected funding of over $500 million for the athletics department.
- Otro Capital to receive a share of annual revenues from Utah Brands & Entertainment.
- Both parties expect to exit the partnership in five to seven years.
University President Taylor Randall emphasized the importance of this deal, stating it will empower the athletics program to thrive in a new competitive environment. He noted that the innovative funding model allows the university’s various missions—education, research, and healthcare—to coexist and flourish.
Operational Shifts within the Athletics Department
The partnership will lead to a restructuring of athletic department positions. Areas such as events management, production, hospitality, and finance will transition to the new entity, with athletic director Mark Harlan serving as board chair.
The board’s approval follows a comprehensive 18-month investigation period. The university sought a partner whose values align with theirs, making Otro Capital the ideal choice due to its extensive background in sports and entertainment.
Goals for the Future
This collaboration aims to provide sustainable funding solutions for the University of Utah’s athletics, reducing dependency on traditional university resources. Randall expressed confidence in the partnership’s shared risks, which reinforces a collective commitment to its success.
Harlan highlighted that this venture represents a substantial advantage in recruiting and retaining talented athletes. By integrating experienced professionals familiar with Name, Image, and Likeness (NIL) policies, the university aims to enhance its competitive edge.
Conclusion
The University of Utah’s private equity deal signifies a pivotal shift in how collegiate athletics can be funded. By partnering with Otro Capital, the university is poised to create a robust framework that supports its athletics and broader academic missions.
