On the latest Sporticast episode, hosts Scott Soshnick and Eben Novy-Williams discuss some of the biggest sports business stories of the week, including the launch of a college sports-specific investing fund. Collegiate Athletic Solutions (CAS), a collaboration between RedBird Capital and Weatherford Capital, is the latest institutional fund to turn its attention to college sports, seeking opportunity in the upheaval currently underway at top-tier NCAA programs.
The interest from institutional funds is, first and foremost, about making money. More specifically, investors are drawn by the same levers driving up pro sports valuations and PE interest in leagues like the NBA, MLB, NHL and MLS. Athletic departments have contractually-obligated revenue (like media and sponsorship deals), there’s scarcity value, and their businesses are largely uncorrelated to the rest of the market. All of that makes investing in (or lending to) a school alluring.
The hosts talk about the difference between private equity and private credit, and also the difference between the risk profiles of a college athletic department as opposed to college conferences. Both are in talks on potential partnerships with institutional firms.
Next they shift to PE in a different league. The NFL is the only major U.S. league that does not allow institutional funds to hold equity in teams, but that is likely to change in the coming months. NFL owners met in Nashville this week and discussed a possible framework, but did not vote on formal changes. Expect the league’s approach, when codified, to be more cautious than that of its peers.
Lastly they talk about WNBA rookie Angel Reese‘s latest investment. The Chicago Sky forward paid cash for about 5% of a USL Super League women’s soccer team in D.C.
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