Texas Tech billionaire booster and board of regents chairman Cody Campbell has come out vehemently against conferences taking on private equity investments.
A conference-wide private capital deal goes against “all the laws of finance,” he said.
“I don’t think it makes any sense,” he told Front Office Sports in an interview last week. “You have a whole spectrum of financial situations inside the conference, so you can’t get everyone’s in the same box.”
As a regents board chairman, the billionaire oil-and-gas tycoon could have influence on these types of decisions, both at Texas Tech and in the Big 12. His critique is also noteworthy given that he has advised the White House on college sports policy and has launched a major lobbying campaign of his own.
To be sure, Campbell himself is a source of private capital as a donor to Texas Tech, but those donations do not come with equity stakes or expectations of repayment.
Campbell cited booster support, loans and borrowed money, and credit ratings as factors that could influence whether a private equity deal would work.“We have a AA+ credit rating,” he said of Texas Tech. “We can issue tax free bonds, Our cost to borrow is something less than 3% So why would ever take capital that’s more expensive than that?”
Campbell referenced reports of a Big Ten private capital investment, saying he believed some schools in the Big Ten were in a similar position as that of Texas Tech. Big Ten’s deal being considered would take $2.4 billion in capital from a California pension fund to distribute to all Big Ten schools, and would give the fund an equity stake in a new entity called Big Ten Enterprises.
“Why would you try to force it down the throats of all your conference members when they don’t all need it?” Campbell said.
Campbell did note a private capital or equity deal might make more sense at a school-by-school level: “If an individual institution and their board wants to entertain deals—by all means, I think they need to do what they need to do.”
Some individual institutions have already done so. Sports consultancy firm Elevate has signed deals with two power-conference schools, reported to be UCLA and Penn State; both schools denied the reports, but FOS has confirmed with multiple sources that Penn State is one of them. And Boise State is actively considering a private capital investment.
