Utah approves groundbreaking private equity deal raising $500 million for athletics

Landmark deal includes the creation of a new company that will work as an offshoot of the athletic department

Otro Capital, the private equity firmed partnering with the university, will have access to the Utah Utes football team, with all coaching and player personnel decisions remaining with the school. | Rob Gray-Imagn Images

Private equity in college athletics had only been a concept explored by a few schools and major conferences.

On Tuesday, the University of Utah helped pave the way for more institutions to look into the idea as its board of trustees approved a first-of-its-kind partnership with a private equity firm.

The new venture will see the creation of a for-profit entity called Utah Brands & Entertainment LLC. Otro Capital, a New York-based sports private equity firm, along with prominent donors, is projected to infuse more than $500 million in capital into Utah's athletic department.

The groundbreaking deal was first reported by Ross Dellenger and confirmed by KSL's Josh Furlong after the partnership was unanimously approved during the board of trustees meeting.

According to Dellenger, Utah Brands & Entertainment is the centerpiece of the project as a private offshoot of the athletic department. The schools will retain majority ownership and decision-making authority over Utah Brands & Entertainment, while Otro provides capital and an executive team to help the company function. A president from outside the university will preside over the company and report to a board, chaired by Utah athletic director Mark Harlan.

The new company's goal is to generate more revenue through ticketing, concessions, corporate sales and sponsorships. Utah Brands & Entertainment will also be charged with overseeing the revenue-share pay system for Utah student-athletes, according to Dellenger, while Otro executives have access to the school’s trademark and licensing rights, facilities, sponsorships and sports teams.

Decisions regarding coaching and player personnel remain with the university so that the school can still be eligible under NCAA rules. Per Dellenger, Utah cleared the private equity deal with the NCAA before its final approval.

Additionally, a group of donors will have the ability to purchase a stake in Utah Brands & Entertainment, per Dellenger. It'll still be on the school to raise money, though the company will house several departments that traditionally fall under the university's athletic department, such as athletic personnel and divisions.

The university will split its funds with Otro, which is expected to earn a large percentage of the annual revenues generated by Utah Brands & Entertainment. According to Furlong, the university will have the right to buy shares back if Otro decides to move on or if certain parameters are not met.

Otro Capital is an operator-led private equity firm with experience in sports, entertainment and media. According to its website, the firm seeks to invest in strategic businesses within the sports ecosystem with intellectual property and opportunity to scale through a hands-on, operational approach. One of its founders, Alec Scheiner, previously spent time as president of the Cleveland Browns and senior vice president of the Dallas Cowboys.

Private equity's debut in college athletics had been on the horizon for some time, dating back as far as two years ago, when Big 12 commissioner Brett Yormark's pursuit of a capital deal inspired Harlan and Utah administrators to seek their own.

The Big 12 considered a private equity investment that included a possible cash infusion of $800 million to $1 billion from Luxembourg-based CVC Capital Partners back in June 2024. The potential move was put on pause as Yormark told Front Office Sports this past May that the league wasn't "ready to go in that direction."

The Big Ten almost got a $2.4 billion capital deal across the finish line before at least two schools foiled the project.