Big Ten Pushes For $2.4 Billion Private Investment, Even if Michigan & USC Aren’t On Board

Big Ten executives are pressing hard with member schools to move forward with a $2.4 billion private capital investment, with or without Michigan and USC.

Last month, we reported that the conference was in talks with an investment fund of the University of California pension system about infusing $2.4 billion in immediate cash into the 18 member schools and helping create a conference subsidiary, Big Ten Enterprises.

However, officials from Michigan and USC reportedly had “close to unanimous feelings of opposition” on the move, and now, the conference appears to be ready to move forward regardless of their stance.

Yahoo Sports’ Ross Dellenger reported Sunday that Big Ten executives have told schools that it may move forward with a vote in two weeks to potentially adopt a 20-year, $2.4 billion deal with UC Investments and extend the conference grant of rights an additional 10 years.

UC Investments manages the endowment and retirement savings of the UC system and is independent from the universities within the system, such as Cal Berkeley. It currently manages a $190 billion portfolio.

The push for a vote has support from several university administrators at 16 schools, Dellenger notes, with Michigan and USC representing the only two who are opposed.

The Big Ten has sent messages to Michigan and USC indicating it is moving forward with the deal, even giving each school a proposed deadline for their decision, according to Dellenger.

“If they don’t agree to the deal, the schools may lose the additional capital as part of the landmark proposal and risk their future within the conference beyond 2036, the current end of the existing grant-of-rights agreement,” he wrote. “League officials are socializing a specific date — Nov. 21 — for a vote on the capital investment proposal.”

If a deal is reached, Michigan and USC will be granted a grace period, anywhere from three to six months, to decide if they want to opt in and reap the full financial benefits.

A Big Ten spokesperson told Yahoo Sports that “no such vote is scheduled” and that the league “continues to work closely with all member universities to explore a partnership to strengthen and modernize our conference. The Big Ten will provide its members adequate time to consider this opportunity with a not-for-profit financial partner.”

If the deal comes to fruition, UC Investments would infuse $2.4 billion into the conference, at least $100 million per school (and an average of $135 million per school), in exchange for a 10% equity stake in Big Ten Enterprises, along with an extension of the grant of rights (a deal where schools give the conference permission to sell its media rights) from 2036 to 2046.

Michigan trustees have publicly called the deal a “payday loan” and a “bail out” for schools that have mismanaged their finances.

The development of the deal has raised eyebrows from the American Council of Trustees and Alumni (ACTA), which told Yahoo Sports the Big Ten’s process for approving the deal has been “preposterous” and ignores the role of board members.

“We have emphasized for 30 years the fiduciary role of trustees,” ACTA President and CEO Michael Poliakoff told Yahoo Sports. “These boards have responsibility for everything that happens on campuses.”

The ACTA, a non-profit organization representing university board members across the country, was scheduled to hold a call with five Big Ten schools, Michigan, USC, Penn State, Ohio State and Maryland, on Monday, though it was postponed.