University of California Wants to Bet $2.4 Billion on Big 10
(Bloomberg) — The investment arm of the University of California is looking to buy a $2.4 billion stake in a new Big Ten business venture; It’s a move that would make the public university system a partial owner of one of the most important conferences in college sports.
The proposed partnership would give UC Investments a 10% stake in Big Ten Enterprises, an entity that will manage the conference’s media rights and sponsorship deals, UC said Friday. The remaining 90 percent will be split among the league’s 18 member schools and the conference, including the University of California at Los Angeles.
“The Big Ten stands apart,” Jagdeep Singh Bachher, chief investment officer of the University of California, Berkeley, said in a statement. “UC Investments will be proud to support the Big Ten’s enduring legacy and continued commitment to the success of student-athletes and scholars.”
The deal sparked opposition from the University of Michigan and the University of Southern California, two members of the Big Ten, according to a report this week in Front Office Sports. UC Investments, which manages more than $200 billion in assets, said its offer required holding the shares for at least 15 years and that the investment would not change the Big Ten’s management structure.
UC Investments is meeting with Big Ten leadership and member universities to explore a long-term partnership designed to strengthen the stability, independence and shared values of the conference.
“We are ‘century-old investors’ as encoded in our ten investment pillars,” UC Investments said in its statement. “We see Big Ten Enterprises as a 100-year investment.”
Colleges with major athletic programs are under pressure to find new ways to raise revenue after a landmark federal agreement on student-athletes’ name, image and likeness (NIL) rights opened the door to them being paid by schools.
Starting July 1, schools will be able to pay student athletes by sharing their income. They would be able to cut checks worth $20.5 million each year for each Division I school that accepts the deal. This amount equals approximately 22% of the average athletics department’s revenue and is planned to increase each academic year.
UC Investments manages an investment portfolio that includes retirement, endowment and cash assets and currently invests in sports teams and makes long-term direct investments in both public and private companies.
(Updates regarding investment horizon in sixth paragraph)
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