Renowned sports intelligence business JohnWallStreet conducted a private equity-college sports event on Jan. 20 at the W Hotel in Atlanta, Georgia, just hours before the College Football Playoff National Championship Game between the Ohio State Buckeyes and the Notre Dame Fighting Irish. Multiple panels were held, featuring conference commissioners and a presentation by Mark Dowley, RedBird Capital’s chief operating partner.
Per the company’s website, the audience had big names in attendance, including senior officials from Bowl Season, the NCAA, ACC, AAC, Big 12, Big Ten, Mountain West, and SEC.
College Football Conferences Might Tap Into ‘Third-Party Money’ in Another Year
Private equity is not a new concept in sports — many sports leagues have permitted private equity firms to own limited partner stakes for a long time. The NBA, MLB, MLS, and the NHL already have allowed it.
Even the MFL decided in August to allow private equity to own minority stakes in teams. Now, interest is swaying toward college football, so the private equity-college sports event was a major event for the next big step in the sport.
ESPN’s Heather Dinich spoke to one of the sources who attended the event who told her that the meeting was more informative — rather than a directive on what to do and what not to do.
“I certainly believe that by this time next year, there will be conferences that will have done deals — maybe they’re private-equity-focused, maybe there’s a different model,” an industry source told Dinich, “But there’s not a chance in hell another year’s going to go by with someone not tapping into some kind of third-party money.”
The individual tickets to the event were priced at $1,994 and included a “complimentary report on the opportunities and challenges for college athletic programs around private capital.”
Private Equity Firms Are Interested in Buying Into College Football Programs
Many private equity firms and venture capital enterprises are looking to capitalize on the growth of college football. Moreover, the sport will also benefit, as it’d translate into an escalation of NIL, which would mean better deals for athletes and football programs.
According to CNBC Sports, football generates around 75% of an athletic program’s revenue at typical Power Four schools. This leads to many interested investors.
“The SEC is almost a super-conference and, because of its football teams, owns the most valuable content in college sports,” said Irwin Kishner, a partner at the corporate department of Herrick Feinstein LLP and co-chair of its Sports Law Group.
“There’s a big opportunity to drive EBITDA [earnings before interest, taxes, depreciation, and amortization] higher in college sports because there are easy ways to maintain quality, while reducing expenses,” Kishner added.
Goldman Sachs Global Co-Head of Sports Franchise, Greg Carey, talked about the reason behind the investors’ interest in the college football conferences.
“As a business, college sports — particularly football — is performing well and continuing to grow, which is why investors are looking at the asset class,” Carey said.
KEEP READING: College Football Playoff Seeding Shakeup? FBS Leaders Eye Major Changes for 2025
Per a report from Sportico, the Florida State Seminoles are currently trying to work out a deal with JPMorgan Chase to raise institutional capital. So, it would seem that the involvement of private equity firms in NCAA programs is inevitable.
College Football Network has you covered with the latest from the ACC, Big Ten, Big 12, SEC, and every Group of Five conference and FBS Independent program.
