In a day and age where unification is exceedingly rare, the Michigan Board of Regents is in lockstep on one issue: no private equity infiltrating the Big Ten.
The board held a previously scheduled meeting on Thursday, Oct. 16 at its Flint campus and amongst a host of issues, discussed the recent idea to bring private equity funding to Big Ten athletic departments. The Big Ten is advancing in talks surrounding a 20-year partnership with UC Investments, the University of California pension system’s investment fund.
Jordan Acker, among the most outspoken members on the board, lambasted the idea that one of the most well-known and endowed conference’s across the country needs an influx of capital at the expense of losing its autonomy.
“The Big Ten does not need to be sold to save college sports,” he said. “It needs to lead. … We can’t cry poverty while spending tens of millions on buyouts. We can’t have college sports, the collegiate experience, dictated by private equity.”
On Thursday, the Big Ten released a statement seemingly in response to the backlash from Michigan and USC.
“Over a year ago, we instructed the conference to undertake a comprehensive process, alongside our members, to innovate for the future and extend the conference’s legacy of academic and athletic excellence,” the Big Ten Conference Council of Presidents and Chancellors Executive Committee said in a statement. “The Big Ten remains committed to modernizing the operations of our conference, strengthening conference stability, preserving Olympic and women’s sports, and enhancing the student-athlete experience. The conference has provided an option from a non-profit partner – not private equity – that meets those objectives. Ultimately, it is the decision of the Big Ten member institutions’ presidents and chancellors to decide if it’s the right opportunity and those conversations are ongoing.”
As currently constituted, the plan would be for the league receive a cash infusion of $2.4 billion. Every school would reportedly receive at least $100 million, while some of the bigger brands − which includes U-M − would be closer to $200 million.
Proponents of the deal tout the fact that included in the deal would be the Big Ten extending its grant-of-rights agreement by a decade, through 2046. What this would do is assure a spot in the league to all 18 teams and prevent further branching out. Some feel, after the addition of the West Coast teams in USC, UCLA, Oregon and Washington, it’s imminent that the Big Ten will become a super conference and this would ensure that doesn’t happen.
The league would need unanimous approval in order to pass the deal, which U-M stated Thursday it will not participate in. Others joined in, questioning the necessity of the deal, such as regent Mark Bernstein.
“A very big payday loan. That’s pretty much exactly what this is,” he said. “Who would have thought the Big Ten conference would need a bailout like this? And make no mistake, that’s exactly what this is.”
Acker continued that he did not support a decision that he feels would require the Big Ten to “sell our legacy” to receive an influx of funds. Bernstein called it “reckless” and “short-sighted.”
Michigan is not the only university who does not support the idea. USC has also reportedly pushed back on the deal, seemingly in part because it would not be included among the top tier institutions that would receive the upper-end of the influx.
It’s not that U-M doesn’t recognize there are some financial troubles brewing across the league. The recently resolved House vs. NCAA settlement paved the way for athletic departments to pay athletes directly. While it’s a win for the student-athletes, it’s also another $20.5 million that athletic departments feel they need to come up with.
The potential deal being discussed would create an entity known as “Big Ten Enterprises” which would manage everything from sponsorships to media rights.
UC Enterprises would not only receive a cut of the league’s annual distribution, but a 10% stake in Big Ten Enterprises.
“The conference needs to slow down and consider better ways to address the very real problems facing some Big Ten universities and their athletic departments,” Bernstein said. “But it is the job of a board — especially this board — to protect the future from the present.
“That is why the U-M board opposes this private equity deal and urges other Big Ten universities to do the same.”
Tony Garcia is the Wolverines beat writer for the Detroit Free Press. Email him at apgarcia@freepress.com and follow him on X at @RealTonyGarcia.
