There’s been plenty of bad news for the University of Colorado Athletic Department during their recently concluded football season. A 3-9 record, no bowl game, key recruits de-committing…and of course the news that despite the ongoing presence of Hall of Famer Deion Sanders as their head football coach, revenues haven’t met expectations. The department reportedly expects to operate at a loss of $27 million for the next fiscal year.
In the age of bloated media rights deals for major college football conferences, that’s significantly bad news. No one thinks college sports are losing money. Yet costs are just going to continue to rise with things like revenue sharing for players coming into play. The cost of doing business within the “Power Four” just keeps going up.
Big 12 Media Rights Revenue Isn’t Enough Anymore
Currently, Colorado receives $32 million per year for their share of revenue from the Big 12 conference. That money goes quickly when you consider things like the $10 mil the school is paying Sanders and the $20.5 mil they will be sharing with athletes in the very near future.
The solution isn’t just about selling more tickets, securing more corporate sponsorships and putting the squeeze on boosters. Recently, a new idea – finding outside investors – has taken hold. This week, the University of Utah entered into a partnership with a private equity firm to “infuse cash” into the schools’ sports programs. The partnership with a New York-based Otro Capital will include the creation of a for-profit company that will aim to generate millions for the school’s athletic programs.
There’s no doubt that other schools will follow suit. Already the Big Ten conference has explored a similar option, but has not garnered the support of all 18 members. The conference is in the middle of a seven-year, $7 billion media rights deal but still has member schools needing more revenue. The idea of schools creating this sort of partnership with private financial firms as Utah is doing is new.
Would the Administration at Colorado Consider Doing What Utah is Doing?
When Athletic Director Rick George hired Deion Sanders back in December of 2022 and signed him to a five-year contract worth close to $30 million, he was asked how the school was going to be able to afford to pay the contract. He famously replied, “We don’t have the money yet, but I know we’ll have it so I’m not worried about that piece.”
Now with Sanders’ new contract extension costing the school almost twice that, the need is there.
A subsidy from the University is on the table to address the projected shortfall. But entering into a partnership with a private equity firm could be a more palatable solution. This might be an idea that George passes on to the incoming Athletic Director when his retirement becomes official at the end of the current school year.
Then again, the political climate in Boulder, Colorado and Salt Lake City, Utah could not be more different. They may be separated by just 350 air miles, but they’re worlds apart when it comes to views on things like the distribution of wealth. It’s not a slam dunk that the CU administration would want to be tied in with a private capital investment firm.
There is no doubt that the idea will be raised, if it hasn’t been already.
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