Kiss College Sports Goodbye As Wall Street Sinks Teeth Into D1 School

Wall Street is finally sinking its teeth into college sports.

On Tuesday, the University of Utah approved a partnership with private equity firm Otro Capital and the creation of a for-profit company. The new company will be called Utah Brands & Entertainment and will manage a slate of athletic operations, including media, licensing, and finance. (Subscribe to MR. RIGHT, a free weekly newsletter about modern masculinity)

We all know what happens when private equity groups get involved, whether it’s in youth hockey or housing: they figure out ways to dramatically squeeze as much profit as possible, whether it’s cutting out maintenance costs or burdening people with junk fees and other junk products.

SALT LAKE CITY, UT – SEPTEMBER 7: Dominic Richardson #21 of the Baylor Bears is tackled by Karene Reid #21 and Van Fillinger #7 of the Utah Utes during the first half of their game at Rice Eccles Stadium on September 7, 2024, in Salt Lake City, Utah. (Photo by Chris Gardner/Getty Images)

In fiscal year 2024, Utah’s athletics department faced a financial shortfall, reporting a loss of $17 million, ESPN reported. The department’s expenditures amounted to $126.8 million, while revenues were only $109.8 million, resulting in a 15.8% deficit.

Despite the overall loss, the Utah football program was notably profitable, generating a net gain of $26.8 million. Men’s basketball also contributed positively with a profit of $2.6 million.

However, these successes were overshadowed by the financial losses incurred by the remaining 17 athletic programs, which collectively totaled $21.2 million, according to ESPN.

So what’s going to happen when private equity starts running a cost analysis on less profitable sports programs or things like student bands and cheerleaders? Well, they might want to cut out the dead weight, and the University of Utah’s tuba section might look a bit thinner. Maybe the swim team will have to go, or maybe cross country.

And I’m sure they will find ways to jack up prices or force parents to pay up to watch their student athletes compete in a sport not as popular as football or basketball.

This is not a good trend, to say the least.