What Big 12 schools rejecting private equity could mean for funding

TL;DR

Twelve Big 12 schools have rejected private equity funding, including Colorado, Arizona, Iowa State, and Kansas State. The funding, offered at a 10% interest rate, has faced widespread skepticism among conference members.

Key points

Twelve Big 12 schools have rejected private equity funding.
The funding comes from RedBird Capital and Weatherford Capital.
The offered credit line has a 10% interest rate.
Concerns about costs and implications are driving the rejections.
Utah, Kansas, and Arizona State have not yet decided.

Mentioned in this story

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The Big 12's decision to turn to investment from private equity firms has been controversial, and even most of its member schools don't seem to be on board.

According to USA TODAY Sports' Brent Schrotenboer, four more Big 12 programs — Colorado, Arizona, Iowa State, Kansas State and Oklahoma State — have turned down the potential credit line offered by the league, which comes at a 10% interest rate.

That brings the total to 12 conference members who have rejected credit from private equity, as those four schools joined TCU, Baylor, Texas Tech, Houston, Cincinnati, Brigham Young, UCF and West Virginia. No Big 12 programs have announced plans to opt in to the credit opportunity, though Utah, Kansas and Arizona State are yet to make a decision.

According to Schrotenboer, there are several reasons these schools may be declining the influx of cash, which comes from a partnership with RedBird Capital and Weatherford Capital.

For one, they may think they can get a better interest rate elsewhere or are able to self-fund through donations and other fundraising tools. Additionally, Schrotenboer interviewed former Stanford economics professor Roger Noll, who explained that uncertainty over potential long-term deficits could explain these schools' reluctance to take on additional debt.

Exploring private equity has become a growing trend as operational costs rise in college sports, but it seems that, at least for now, Big 12 schools are hesitant to participate.

Q&A

Why are Big 12 schools rejecting private equity funding?

Big 12 schools are declining private equity funding due to concerns about the associated costs and potential implications for their programs.

Which Big 12 schools have turned down private equity offers?

The schools that have rejected private equity offers include Colorado, Arizona, Iowa State, Kansas State, TCU, Baylor, Texas Tech, Houston, Cincinnati, Brigham Young, UCF, and West Virginia.

What are the terms of the private equity funding offered to Big 12 schools?

The private equity funding offered to Big 12 schools comes with a 10% interest rate, which has raised concerns among the member institutions.