Can billions in private capital keep the Big Ten locked in and Ohio State, Michigan happy?
Irwin Kishner, co-chair of Herrick's Sports Law Group and co-chair of Herrick's Corporate Department, was quoted in The Athletic in an article discussing how Big Ten leaders are weighing the pros and cons of partnering with private capital.
The article notes that the decision whether to strike a deal with private capital is imminent and would be tied to sponsorship and branding rights that could bring in billions of dollars along with the creation of a new entity for those rights. The deal would also essentially tie the conferences together through their media rights for the next 20 years.
According to the article, distributions from infusions of private capital would be tiered, with the opportunity to steer revenue to the schools that drive the most value. However, the article notes a difference in investing in the Big Ten -- which "comprises 18 universities, and 16 are public institutions. As de facto state agencies, the 16 public institutions cannot sell a piece of themselves to a private enterprise."
“When you deal with publicly chartered universities, you do need to deal with the local state law that chartered the school,” said Irwin. “You can’t be perceived as selling an asset of the state. So, these things are things that you need to take into consideration when you’re investing into public universities.”
The article highlights that the workaround is to go through the Big Ten, which is considered a nonprofit organization. "Petitti and other Big Ten officials believe their conference and its assets are undervalued," a stance with which Irwin agreed. "The danger is, if the Big Ten uses a subsidiary and cannot meet its financial obligations, an outside entity will control those assets. But there’s little fear the Big Ten won’t continue to grow financially and make this arrangement lucrative for everyone involved — provided Ohio State and Michigan remain part of it."
Read the full article in The Athletic here. Access may require a subscription.