Big 12 discussing PE investment, sale of naming rights to Allstate

The Big 12 and member schools have had initial discussions on a potential private equity investment into the conference, league sources familiar with those talks confirmed to The Athletic. The talks were first reported by CBS Sports. The conference is also exploring selling its naming rights to a title sponsor, the sources confirmed, which could be a first-of-its-kind venture and one of the largest commercial deals in college sports.

Allstate is considered the frontrunner for the sponsorship, with the potential conference name becoming the Allstate 12 Conference, according to a person with knowledge of the discussions.

Conference leaders heard a presentation at the recent spring meetings in Dallas from CVC Capital Partners, a Luxembourg-based investment firm. Discussions included a potential investment in the range of $800 million to $1 billion from CVC in exchange for a 15-20 percent stake in the Big 12. An investment of that size would help to shrink the revenue gap between Big 12 schools and the other three power conferences — the ACC, Big Ten and SEC — as the Big 12 becomes a 16-member league this summer and continues under its media rights contract that was extended in the fall of 2022.

Selling the Big 12’s naming rights to a title sponsor could potentially be worth as much as nine figures on its own, according to multiple league sources.

Big 12 commissioner Brett Yormark emphasized the importance of maximizing revenue at the spring meetings. “Value creation is the (league’s) number one initiative and priority,” he said. He was also asked about the growing interest of private equity in college athletics. “In some respects, (interest from) private equity is a validation of where this industry is going and the growth trajectory,” said Yormark. “So I don’t look at it as a bad thing.”

The Big 12’s extended television contract with Fox and ESPN, which runs through 2031, is worth roughly $2.3 billion and expects to distribute an average annual payout of nearly $32 million per school beginning in 2025-26. That’s on par with the ACC’s television deal but well behind the SEC and Big Ten. The Big 12 distributed a record $470 million to its 14 members in 2024, which includes additional revenue from the College Football Playoff, NCAA Tournament, bowl games, league championship events and sponsorships. But the per-school payouts also represented a reduction for the conference’s 10 original members compared to 2023, with this year’s distributions diluted due to the partial-share additions of BYU, Cincinnati, UCF and Houston.

The Big 12’s total payouts lagged behind each of the existing power conferences in 2024. The Big Ten distributed roughly $60 million per school, the SEC distributed $51 million per school and the ACC distributed $44.8 million per school to their respective 14 football-playing members.

Sources described the league’s private equity discussions as “preliminary” and something that would have to be approved by the conference’s board of directors. CVC’s investment stake would be intended to better financially position the conference and its members ahead of its next media rights contract in 2031, with the belief that an anticipated increase in television revenue from that next deal would provide a long-term return on investment for the firm. The initial sense is that CVC would collect its stake as an annual distribution in the future under a new media deal, similar to member schools, but those are all details that would be worked out if a partnership is pursued. CVC has invested in more than 130 companies and organizations worldwide, including Bruin Capital and the Women’s Tennis Association within the sports business industry.

The league’s private equity discussions are similar to the informational talks that many schools are having with firms on an individual basis, including those inside the Big 12. Pac-12 commissioner Larry Scott once explored the idea of taking a private equity investment in 2019 for at least $500 million, but there wasn’t enough support from the schools, and the league moved on from the idea.

The Big 12’s exploration of new additional revenue streams comes as athletic departments prepare for the added financial burden of the House v. NCAA settlement that, if approved, would result in annual withholdings from the NCAA for back payments as well as direct revenue-sharing with athletes moving forward, the latter of which is expected to cost schools as much as $20-25 million each year. Those pressures are compounded by the widening revenue gap between the Big Ten and SEC, which are both entering new television deals and will soon earn a higher, unequal rate of revenue distribution from the new College Football Playoff contract.

The potential private equity and title sponsor opportunities are in line with Yormark’s reputation as an aggressive and creative deal-maker since taking over as Big 12 commissioner in 2022.

“He’s a kick-every-tire type of leader,” said one league source, “which I think we all appreciate.”

— The Athletic’s Chris Vannini contributed reporting.

(Photo: Jerome Miron / USA Today)