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University board members from schools across the country are mounting an opposition campaign to regain control over who at their schools has the authority to sign onto the Big Ten’s $2.4 billion investment proposal.
Several school board members across multiple Big Ten schools have not been given access to key details about the conference’s investment proposal, they told Front Office Sports. Even though university boards are typically required to vote on financial decisions, several members said that in this case they were told their input would not be required.
Now, ahead of a potential vote, board members are mounting a campaign to force the conference and their presidents to give them more information—and prevent the Big Ten from signing onto the deal without board approval. Various board members have involved the American Council of Trustees and Alumni (ACTA), a national advocacy group for university board members; and there is talk of litigation, board members told FOS. One board member suggested state or federal lawmakers could get involved, as well.
Sources said the issue embodies a much broader existential question of who has jurisdiction to make major financial decisions at universities—especially public schools that receive taxpayer funds.
“We’re not weighing in on the advantages or disadvantages of the proposal,” Michael Poliakoff, the president and CEO of ACTA, told FOS. “We’re weighing in on this horribly flawed process from the start.”
In response, a Big Ten spokesperson said: “At the direction of Big Ten conference leadership, we have run a thorough process to evaluate all aspects of Big Ten Enterprises. That process is ongoing.”
Reports surfaced last month that the Big Ten was pushing a $2.4 billion investment proposal with UC Investments—the pension fund for the University of California system. The deal would require spinning off conference assets into a private fund called Big Ten Enterprises and sell a 10% stake of those assets to UC Investments. The deal would also require the schools to sign a grant of rights—a contract binding the conference together—until 2046.
University board members at more than one Big Ten school told FOS they were not given details of the proposal. One of the board members called the process “ass-backwards,” saying: “I think this a terrible mistake by Tony [Petitti]. If it was so good, why is he being so secretive?”
In one case, a trustee didn’t even know the name of the pension fund until days after it appeared in media reports, the trustee previously told FOS. Poliakoff told FOS that board members he spoke with had been kept in the dark on who might be on the Big Ten Enterprises board, as well as how funds would be distributed. “To put it in a word, they need the full text of this,” he said.
Despite opposition from USC and Michigan and the continued lack of clarity among board members, the Big Ten is still considering scheduling a vote, one source told FOS Sunday, confirming a Yahoo Sports report. The vote could take place as early as Nov. 21, according to the Yahoo report—though the Big Ten issued a statement Sunday denying that any vote has been scheduled.
Instead of waiting for a vote, Big Ten school board members are being proactive.
A group met Sunday with the leadership of the ACTA to consider next steps. “If you don’t draw the line here .… when does the board get to weigh in?” the first board member said. “Is it just presidents who come and go?”
Another told FOS that some are discussing the possibility of litigation to force university presidents to share details of the investment proposal with board members.
The first board member suggested to FOS that Congress or governors’ offices could assert themselves into this process as well. Governors often wield power over public university systems—and sometimes appoint board members—-so they could intervene to force university presidents to share information with their boards. On Capitol Hill, Rep. Michael Baumgartner (R., Wash.) has already introduced a bill that would ban these types of proposals, and other lawmakers have sent inquiries.
Finally, board members could also threaten the jobs of their university presidents. Michigan and USC’s presidents are especially vulnerable, as they are serving on an interim basis. In fact, Michigan’s interim president Domenico Grasso is expected to vote against the deal because of the feelings of his board, a source previously told FOS.
“A president or a chancellor who does not obey the will of the board should be subject to the strongest kind of action,” Poliakoff says. “I have seen presidents fired for example, making real estate deals without board authorization. This is a deal of far greater importance.”
