University of Utah athletics private equity deal catches the attention of Congress

WASHINGTON — Federal lawmakers are exploring ways to block colleges from entering into private equity deals, possibly putting plans at risk for the University of Utah after it announced last week a first-of-it-kind proposal to infuse hundreds of millions of dollars into its athletic programs.

Legislation to block schools from entering into such deals tied to athletic programs has been in the works for months, with Rep. Michael Baumgartner, R-Wash., filing the Protect College Sports from Private Equity and Foreign Influence Act, or PROTECT Act, in early October. But the news from the University of Utah last week appeared to reignite the conversation.

"Congress will be taking a hard look at the tax exempt status of universities that enter into private equity deals," Baumgartner said in a post on X directly responding to the announcement. "If you want to act like a non-public entity, you better be ready to be treated like one."

The PROTECT Act would amend the Title IV Program Participation Agreement that would prohibit agreements with private equity groups that own or share in athletics revenue, exercise control over athletics decisions, or hold any financial interest in the athletics facilities or property. This would apply to athletic conferences and affiliated groups, including media, name image and likeness approval decisions and marketing teams.

The bill would carve out some exceptions such as gifts and endowments from donors, fee-for-service contracts that do not leverage sports programs, and traditional bank loans and bonds for operations.

The proposal was referred to the House Education and Workforce Committee shortly after it was introduced, and the panel is "actively examining" the issue of private equity in college sports, according to a spokesperson. It's not yet clear when the bill could be advanced.

Utah Rep. Burgess Owens, who sits on the House Education and Workforce Committee, pointed to current NIL and revenue-sharing rules as putting "serious strain" on college athletics by "placing new and unsustainable burdens on programs that were never designed to operate this way."

"Athletic programs are striving to meet the moment and looking for solutions to avert financial disaster, which will damage the sports and the student-athletes they support," Owens told the Deseret News in a statement.

Owens noted there are other ways to address those concerns, including through the Student Compensation and Opportunity through Rights and Endorsements, or SCORE Act.

That bill would guarantee students' rights to sign name, image and likeness contracts, otherwise known as NIL agreements, without restrictions from their schools or athletic organizations. The bill would enact the law on a national level, effectively replacing individual state NIL laws so all conferences fall under the same standards.

The University of Utah unveiled its plans last week to create a for-profit company with a private equity firm that has expertise in sports, entertainment and media through its 2-year-old University of Utah Growth Capital Partners Foundation. It would be the first university partnership with a private equity firm in college sports.

Administrators defended the decision, arguing the university needs to be innovative in order to avoid raising student fees, cutting research funds or eliminating some or all athletic programs. U. President Taylor Randal said the university is committed to maintaining Olympic or nonrevenue sports.

"This will give our institution, particularly our athletic institution, the upside it needs to thrive in the new revenue-sharing and NIL era," Randall told reporters after the board meeting. "It also allows the other missions of our university to thrive."

The Deseret News contacted the University of Utah Athletics for comment on congressional action.

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