University of Utah to Fund Athletic Program via Private Equity

The University of Utah announced Tuesday that it will partner with private equity firm Otro Capital to help fund Utah’s athletic program as revenue sharing with student athletes has resulted in increasing costs for the university.

The deal will see the formation of a new entity—Utah Brands & Entertainment LLC—containing revenue-generating assets of the university’s athletic program. It will be owned by the University of Utah Growth Capital Partners Foundation, which manages the university endowment through an outsourced CIO contract with the Cynosure Group.

The foundation will own a majority of Utah Brands & Entertainment and hold a majority of the company’s board seats. The university’s athletics director will chair the company’s board. Otro Capital will hold two board seats, and one will be set aside for investors or university supporters.

In June, a landmark antitrust settlement known as the House settlement, because it settled House v. National Collegiate Athletic Association in U.S. District Court for the Northern District of California, opened the door for college athletic programs to pay players directly. Other recent rulings had allowed NCAA athletes to profit from their name, image and likeness rights, but schools had still been prohibited from paying players directly.

The House settlement permits a National Collegiate Athletic Association institution to share up to $20.5 million per year in revenue with its athletes—with that cap increasing by nearly $1 million each year.

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As a part of the settlement, the NCAA will pay $2.85 billion in damage claims over the next decade to college athletes who participated in programs it governs between 2016 and 2024. As a result of the settlement, revenue sharing—expected to be overwhelmingly directed to athletes in football and men’s basketball—is weighing on athletic programs that are already financially burdened.

“Our athletics programs have operated in a highly efficient manner, generating a modest surplus over the years with the support of generous donors and student fees,” University of Utah officials said in a statement. “However, the decision to share revenues with student-athletes under the House Settlement and the emergence of the transfer portal have disrupted the status quo and introduced significant costs to the university. Additionally, we face growing financial headwinds across all of our missions—academics, research and patient care.”

The university will transfer revenue-generating operations to Utah Brands & Entertainment, including licensing, event-related revenues, multimedia, sponsorships, ticketing, use of trademarks and logos.

Otro Capital invests in sports and related industries. It owns stakes in the Alpine Racing Formula 1 team, sports event marketing company FlexWork Sports and sports data analytics platform Two Circles.

The university did not detail what the partnership with Otro will look like, but it stated, “the university will have a partner in Otro Capital, which has deep expertise in building brands, running entertainment venues and creating world-class fan experiences,” adding that the new model will enhance the operations of key commercial activities and generate a significant influx of funding for Utah Athletics.

The board of trustees of the university, which approved the plan Tuesday, expects to finalize the deal early in 2026.

The increase in demand for sports and sports-adjacent investments has led to major alternative investors like Apollo Global Management, TPG and others launching sports-focused platforms and strategies. Professional sports leagues like the National Football League are beginning to accept investment in their teams from private equity firms.

The proposed deal between Utah and Otro could be the first foray of private equity into college sports. The University of California pension and endowment system, UC Investments, was in talks to acquire an equity stake in the Big Ten Conference, but that transaction was put on hold in November after decisionmakers at the University of Michigan and the University of Southern California expressed reservations about the deal.

The Big 12 Conference—which Utah joined in July—has been outspoken about considering private equity investments. Big 12 Commissioner Brett Yormark said at a Sports Business Journal forum on Tuesday that direct PE investment at the conference level “is not in the cards,” but emphasized that the conference will continue to explore “strategic partnership[s].”