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The Big 12 Conference is reportedly considering a private equity investment of up to $1 billion in what would be a first-of-its-kind deal in the world of college sports.
The conference, headquartered in Irving, could receive a cash infusion of $800 million to $1 billion from Luxembourg-based private equity giant CVC Capital Partners in exchange for a 15% to 20% stake in the league, according to a CBS Sports report that cited "multiple" unnamed sources. A portion of the money would go directly to the Big 12's 16 conference members, according to the report.
CVC has assets under management totaling 193 billion euros, or about $207.4 billion. The firm made a presentation to the Big 12 at the league's spring meetings in Dallas, according to CBS Sports.
While one source described the talks as "pretty serious," not all conference presidents are convinced further convincing, according to CBS Sports. The report also notes it is not clear how soon a deal could be completed or when money would start coming into the conference.
Neither the Big 12 nor CVC responded to a request for comment.
If the deal does happen, it would be a major milestone: the first private equity investment in college sports. Private equity firms have become increasingly interested in sports. At the professional level, the NBA, MLB and NHL all allow some form of private equity investment. The NFL is also weighing changes to its ownership rules to allow for limited private equity investments, with Commissioner Roger Goodell saying in May the league's owners could vote on a new policy later this year.
The interest has rolled over into college sports as well. Gerry Cardinale, founder and CEO of RedBird Capital, spoke about the opportunity for private equity in college sports during a Sports Business Journal event in Las Vegas in December. RedBird and Weatherford Capital, founded by former Florida State quarterback Drew Weatherford, have since launched a partnership called Collegiate Athletics Solutions with plans to invest $50 million to $200 million apiece in a select group of universities, the Wall Street Journal reported in May.
Meanwhile, the college sports landscape is undergoing massive change. The ability for student-athletes to get paid for their name, image and likeness created disruption. Conference realignment, which led to the Big 12 growing from 10 teams a couple of years ago to 16 by the time football season kicks off in the fall, has caused even more chaos.
And now private equity has the ability to get involved following a $2.8 billion settlement in a landmark legal battle, House v. NCAA, that allows institutions to directly pay athletes. Schools in the Power Four conferences — the Big 12, Big Ten, SEC and ACC — could have to share up to $22 million a year each with athletes. The increased costs of compensating athletes means schools will need even more cash.
For the Big 12, an investment from CVC would help ensure the conference's long-term financial and competitive security, according to CBS Sports.
Big 12 teams currently earn $31.7 million per year each from the conference's media rights deal with Fox and ESPN, compared to $75 million a year for teams in the Big Ten Conference, which has the biggest deal with Fox, CBS and NBC. A private equity partnership would help close the gap, per the CBS Sports report.
In other Big 12 news, Sports Business Journal reported that the conference was exploring a naming-rights deal with with Allstate, among other potential sponsors.
