Sources: Big 12 lands private capital deal

The Big 12 has struck its long-discussed private capital deal — the first such publicized conference-wide agreement in major college sports.

The league’s presidents and chancellors ratified the five-year agreement with capital partners RedBird last week, as well as Weatherford Capital, finalizing a three-prong package: to deliver an infusion of capital — at least $12.5 million — to the league office to drive commercial development and business growth; offer schools an opt-in capital credit line of $30 million each; and create a strategic business partnership that could pay off when the conference next goes to market for its media rights contract.

The Big 12 is describing the deal as the “RedBird Business Development Partnership.” As part of their Collegiate Athletic Solutions partnership, the firms are co-investing the infusion into the conference with an expected return. However, the capital partners will hold no ownership in the league and the deal will not change the operation or governance of the conference, commissioner Brett Yormark told Yahoo Sports.

The vote from presidents and chancellors last Thursday finalized an agreement that’s been under discussion now for more than two years — a deal spearheaded by Yormark and his board chair, Doug Girod, the Kansas president.

“At the highest level what I hope to get out of this is a really strong partnership that positions our conference well into the future including for our next media deal by creating increased value,” Girod told Yahoo Sports in an interview this week.

The $12.5 million in capital to the league — a number that could grow — will be invested in “revenue-generating opportunities,” Girod said.

Perhaps one of the most noteworthy benefits of the deal is the exclusive college partnership with RedBird, a New York-based investment management firm with $12 billion in assets and an array of companies within its portfolio, including Paramount Global.

Paramount holds ownership of CBS and soon is expected to acquire TNT — two of the leading broadcast partners within the college sports ecosystem. The Big 12’s current media deal — primarily owned by ESPN and Fox — ends in 2031. A league’s media rights deal usually accounts for a majority of a conference’s revenue distributed to its member schools.

“We did the necessary due diligence in order to land in a great place,” Yormark told Yahoo Sports. “I appreciate the board and athletic directors for all of their feedback and guidance and support. In times of uncertainty, RedBird provides us with incredible bench strength.”

It’s unclear how many of the Big 12’s 16 universities plan to accept the option of up to $30 million in credit. Schools have one year to make a decision on the one-time capital infusion. Those within the conference believe that as few as two and as many as a half-dozen programs plan to take the money, which comes at a rate just south of 10%.

Prior to the agreement, RedBird, led by founder and chief investment officer Gerry Cardinale, has already facilitated more than $130 million worth of revenue for the Big 12 over the next five years through business arrangements with entities such as PayPal and the Player’s Era.