The Big 12 collegiate sports conference in the US has reportedly finalized its capital injection agreement with the private equity firms RedBird and Weatherford Capital, which will bring at least $12.5 million to the conference.
News of the league’s negotiations with Collegiate Athletics Solutions (CAS), a joint venture between RedBird and Weatherford Capital, first surfaced in December, with reports stating the deal would initially focus on expanding the league’s commercial operations and offering the 16 Big 12 members a credit boost.
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Last week, the Big 12 board, consisting of all 16 university presidents and chancellors, voted to approve the five-year agreement with CAS, with the news first reported by Yahoo Sports.
The deal consists of three elements: providing a capital injection of at least $12.5 million to the league's front office to drive commercial development and business growth; offering schools an opt-in capital credit line of $30 million each; and creatinng a partnership that will see RedBird help secure additional revenue streams such as sponsorships and future media rights.
Additionally, the deal includes a non-compete clause, with RedBird agreeing not to partner with any other collegiate conferences in a commercial development way.
The tie-up has been positioned as an opt-in capital solution rather than a private equity agreement, meaning neither RedBird nor Weatherford Capital will be taking any stake or equity holding in the property.
Big 12 commissioner Brett Yormack told Yahoo Sports the deal, which has been under discussion for more than two years, will not change the operation or governance of the conference. The schools now have one year to decide whether to accept the one-time capital injection.
The deal deepens RedBird Capital’s relationship with Big 12, having previously facilitated more than $130 million worth of revenue over the next five years through partnerships with PayPal and Players Era, an in-season college basketball tournament in Las Vegas partially owned by RedBird.
RedBird has a significant sports investment stable already in place – it fully owns Italian soccer heavyweights AC Milan, whilst also holding stakes in English club Liverpool and in Formula 1 motor racing outfit Alpine.
Weatherford, meanwhile, counts the IMG Academy sports training facility, established by the IMG sports agency giant, as one of its assets. It is also part of the Tampa Bay Rays’ new ownership group.
The two firms launched a private equity company – Collegiate Athletic Solutions – to invest in college sports in May last year.
Amongst other collegiate conferences, the Big Ten has recently seen its efforts to attract significant external funding from UC Investments hit a stumbling block.
UC Investments, the investment arm of the University of California, has effectively placed a $2.4 billion Big Ten investment deal on hold until such time as the conference can reach unanimity on a decision.
The investment company had tabled that funding offer in exchange for a 10% minority stake in the Big Ten’s commercial business (particularly media rights) over a minimum of 15 years.
However, while most of the 18-team conference is in favor of the bidding, two schools, the University of Michigan and the University of Southern California (USC), have remained opposed to the external investment plans.
