UC Investments offered $2.4 billion for a 10% stake in a new entity that would manage the Big Ten’s league-wide media rights and sponsorship deals.
The UC said it would use a pension fund to invest in Big Ten Enterprises, which would then direct funds to individual Big Ten schools’ athletic departments, according to ESPN. The UC’s investment arm manages investment funds for the University and provides fiduciary oversight, managing about $190 billion in its portfolio, according to the office’s website.
UCLA – alongside the University of Southern California, its crosstown rival – joined the Big Ten in August 2024 and is the only UC school in the conference. The UC Board of Regents approved the move in an 11-5 vote in December 2022, following criticism from Gov. Gavin Newsom, who alleged that UCLA made the decision to leave the Pac-12 Conference without consulting the board, which he sits ex-officio on, according to the Los Angeles Times.
UCLA’s move to the Big Ten also provoked the Regents to authorize the annual transfer of $10 million from UCLA to UC Berkeley in May 2024. Nathan Brostrom, the executive vice president of the UC, said there was a $50 million difference in projected revenue between UCLA and UC Berkeley after leaving the Pac-12 – which crumbled after UCLA, USC, Oregon and Washington announced they would leave to join the Big Ten.
[Related: UC Board of Regents authorizes $10 million yearly payment from UCLA to UC Berkeley]
USC and the University of Michigan – another Big Ten school – oppose the creation of Big Ten Enterprises, according to Front Office Sports, a multi-platform media news outlet reporting on sports business.
USC Athletics did not respond in time to a request for comment on the UC Investments proposal, and Michigan Athletics declined to comment.
UC Investments considers Big Ten Enterprises “a 100-year investment,” a UC Investments spokesperson said in an emailed statement. They added in the statement that UC Investments has offered other Big Ten universities the chance to buy its stake if they are seeking a larger amount of ownership for themselves.
“Our prospective partnership reflects our shared belief in stability, excellence, and purpose,” said Jagdeep Singh Bachher, the UC’s chief investment officer, in the statement. “UC Investments would be proud to support the Big Ten’s enduring legacy and its continued commitment to the success of student-athletes and scholars alike.”
The governance structure of the conference would not be altered by the potential buy-in, the spokesperson said.
Eric Johnson, an adjunct professor in the UCLA Anderson School of Management, said he believes the offer to be bold but intelligent, as college sports – especially college football – is a quickly expanding market.
“This is about an educated funding collection of managers who see a secure opportunity to provide a better return than the marketplace for the constituents who invest in the pension fund,” he said.
Johnson, who previously served as the executive vice president of global advertising revenue and sales operations for ESPN, said UCLA and USC’s decision to move from the Pac-12 to the Big Ten was wise, as they were able to reap greater financial benefits than the teams who made the switch later on.
After the success of the Big Ten move, Johnson said he has trust in decision-makers at UC Investments to know whether the investment in the Big Ten is a good opportunity.
David Kotoyan, the president of the Bruin Sports Business Association, said he was initially intrigued by the proposed deal and grew more excited about it as he learned more details. Kotoyan, a fourth-year business economics student, added that he is excited about people seeing college sports in a more professional light, adding that he believes student athletes deserve greater recognition.
Bachher said in the statement that the investment arm supports the Big Ten’s commitment to the success of students – especially student-athletes.
Kotoyan, however, also said he is somewhat skeptical about the length of the deal – as the UC would have to hold its stake in the conference for at least 15 years – given what he called an uncertain future landscape for college football.
Johnson also said that by entering into the deal, the UC would be giving up potential equity in the future if the market surrounding college sports were to change.
However, Johnson added that he believes the move could be a “shrewd investment,” as it has potential to offer higher yield potential. Sports teams and leagues regularly receive private equity investments, and the UC pension fund appears to be following this approach, Johnson said.
“The whole marketplace of investing in the sports industry this way is all relatively new,” he said. “It’s time to break new ground.”
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