Jun 10, 2025 - Business
Private equity eyes college sports as players secure payday
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Illustration: Brendan Lynch/Axios
Private equity keeps inching closer to college sports, and now has a bit more certainty around its modeling.
Driving the news: A federal judge on Friday approved a settlement that sets the stage for schools to pay their student-athletes.
- Each school will be allowed to share up to $20.5 million in revenue, mostly with football players. That cap is expected to rise annually.
- The settlement also provides $2.8 billion in restitution to former student-athletes, and allows schools to create mechanisms to limit the influence of outside boosters and "collectives" — although questions remain about the effectiveness and enforcement of such oversight.
- For more context, check out our Axios BFD conversation last fall with NCAA president Charlie Baker.
The big picture: The settlement gives both schools and investors much more economic clarity, which could lead to dealmaking.
- Particularly in better understanding the haves and have-nots, as only a relatively small handful of colleges are likely to spend up to the $20.5 million limit.
- Expect a lot of private investment to help finance new facilities and develop luxe fan experiences. Similar to an expanded investment partnership announced yesterday — albeit negotiated prior to the settlement approval — between sports and entertainment agency Elevate, Velocity Capital Management, and the Texas Permanent School Fund.
Yes, but: Media rights is among the biggest revenue drivers for college sports, and most of that is negotiated at the conference level.
The bottom line: The NCAA settlement isn't a gamechanger for private equity, but it does move the yardsticks.
