For the past year, Drew Weatherford has been working behind the scenes throughout college athletics.
He has held secret meetings with representatives of more than 50 Football Bowl subdivision programs, dozens of athletic directors, several university presidents, and even some school board members and chief financial officers.
There have been calls from his office, Zoom chats in hotel lobbies and in-person gatherings at coffee shops, most of which unfold in a similar way: Weatherford, gregarious and charming with a wide white smile, presents a slide deck detailing the project he launched last year with Jerry Cardinale, the former FSU quarterback turned private investor and co-partner at RedBird Capital Partners.
Their goal is very simple. It’s an immediate infusion of cash into major university athletic departments.
“No school said, ‘No, we won’t consider that,'” Weatherford said.
In one of the most consequential weeks in college athletics history, leaders are on the brink of approving a landmark antitrust settlement and adopting a new revenue-sharing model with athletes. Weatherford speaks publicly about his accomplishments for the first time. In two separate meetings with Yahoo Sports, he revealed and explained presentations he has shown to administrators and university officials over the past 10 to 12 months.
Weatherford Capital and RedBird Capital Partners are joining forces (and billions of dollars in cash) on a dedicated campaign and business-building platform to invest capital in the industry’s most transformative college athletic departments. Founded Collegiate Athletics Solutions.
“My gut feeling was that this revenue sharing was real. It would be another big blow to the athletic department,” Weatherford said.
University administrators are preparing for a new reality: sharing revenue directly with athletes as part of the terms of the House settlement agreement.
The NCAA and schools agreed to pay $2.8 billion in unpaid damages, while also agreeing to a future player revenue-sharing model with a sub-salary cap of up to $22 million per year per school. Most of the power conference leaders will eliminate the NCAA’s distribution reduction for back injuries and, to some extent, financial aid limits, in addition to revenue sharing caps.
That’s $300 million in new payments over the 10-year life of the settlement, which is why Weatherford’s phone has been ringing off the hook more frequently than usual, especially over the past two weeks.
In a timely move, Redbird Capital last week added $4.7 billion to its investment fund for new initiatives, bringing the company’s capital to $10 billion, according to the Wall Street Journal.
As part of the Collegiate Athletics Solutions platform, Weatherford and Cardinale are looking for five to 10 programs to invest a minimum of $50 million and up to $200 million in. They are having “deep conversations” with a “handful” of programs, though Weatherford declined to identify or discuss specific schools.
At least three athletic directors from power conference schools confirmed to Yahoo Sports that they have had in-depth discussions with Weatherford and Cardinale about a partnership. They declined to be identified because the deal has not yet been completed.
“Private equity and capital are very important if you want to compete at this level,” one sporting director said. “I’ve been talking to these people for 10-12 months. I haven’t pulled the trigger. But is this what you need to do to succeed and survive? Yes, it is.”
Private equity and private capital are not new to sports.
In fact, Redbird acquired Italian soccer giant AC Milan for $1.3 billion in 2022, as well as Formula One’s Alpine, the Boston Red Sox, English soccer team, and Liverpool owner Fenway Sports. It also holds shares in the group. EverWonder, Redbird’s independent content studio, is operating a new eight-team, in-season men’s college basketball tournament based in Las Vegas over Thanksgiving weekend. The tournament is expected to pay participating teams up to $2 million in NIL contracts.
Ventures like this are not entirely new in the world of higher education. But in the world of college athletics, this is completely unusual. words private and capital Surprise someone together. Many people wince at the idea that an athletic department, originally intended to be a university’s nonprofit marketing and entertainment entity, would relinquish some control for a quick cash grab.
Weatherford describes Collegiate Athletics Solutions (CAS) as “private capital” rather than equity. There is no ownership here, he says. The school has the flexibility to accept a lump sum of $50 million to $200 million. This money will be spent alongside other existing capital (think traditional debt, booster contributions, bonds, etc.) to offset expenses such as athlete revenue sharing, coaching salaries, and facility improvements. The purpose is that. But freedom is theirs.
He said the CAS project would not require a management role within the sports sector, as private equity often does, but would aim to serve as an advisor to the chairman and sports director in managing revenue growth. .
After all, they have an incentive to see their division’s revenue increase, and they get a percentage of the new annual growth. Over a period of 10 to 20 years, the percentage will probably be 22% in the first years, but will decrease to 2% at the end as the company achieves its original investment amount. Weatherford describes this as taking “income royalties.”
Without growth, a company will not be profitable.
“They are not obligated to pay back the money we gave them,” Weatherford said.
These capital firms are built around making smart investments in revenue-generating businesses, so why take a risk on the volatile landscape of college sports when profits are not guaranteed?
“I personally believe deeply in college athletics,” Weatherford said. “As a former athlete, I owe it a lot, and so does my family. We believe in college sports. I love the fact that every year 10 to 15 teams have a chance to win a national title. I don’t like it. I want it to be around 40-50. It’s not a level playing field. Not everyone has the resources to compete.”
New sources of revenue are more important than ever for college athletic departments, which have had little or no reserves for years.
Most athletic departments use profits from the only sport that generates real revenue (football) to subsidize the rest of the department, whether that means funding loss-making Olympic sports or covering football costs.
Over the years, athletic departments at the highest levels have become cash-rich, backed by multimillion-dollar television contracts. Unable to pay athletes directly and in a competitive environment, departments are using their surplus funds to invest in flashy facility projects and multi-million dollar coaching and administrative departments to compete with rivals in recruiting. I spent it on my salary.
What is the result? Many schools are saddled with large amounts of debt, and the debt continues to grow as competition for facility upgrades and coaches’ salaries slowly moves forward. And probably still is. Schools will be allowed, but not required, to pay players directly. Competition for facilities is rapidly evolving to focus solely on player compensation.
“Every school I’ve talked to says that if they don’t make the most of their revenue sharing, they won’t be competitive and risk being demoted from their conference,” Weatherford said. “They need to generate more revenue. And the truth is that a lot of their access to capital has been squeezed. They’ve raised a lot of debt for the facility. We’re in debt, we’re raising huge amounts of money from donors to build facilities, and we’re on the brink of exhaustion, although I’m not saying there’s no room left.”
But many remain skeptical of the need for private equity and capital in college sports, and while university board members and presidents are open to the idea, they are understandably hesitant, including some of the most influential leaders in sports.
“What can private equity do that schools can’t do with their donors?” asks outgoing American Athletic Commissioner Mike Aresco. “Another question is…is private equity aligned with your goals? I’m wondering about its role in college athletics.”
In an interview last month, SEC Commissioner Greg Sankey dismissed any insinuations that private equity is some kind of savior for the industry. “If you use the cliché, ‘If you’re going to buy a stock, you’re going to buy a college sports stock,’ and it seems like a lot of people believe that even outside of college sports,” he said. ”
But the impending revenue-sharing model has managers looking for cash. The new model is scheduled to go into effect next year, i.e. in the fall of 2025. Raising more than $30 million in 14 months is not easy.
For Big Ten and SEC companies, the job isn’t that difficult. Over the next few years, each of these members will be paid more than $25 million in new television and College Football Playoff funds.
In the ACC and Big 12, things are more complicated.
In fact, some ACC schools may be more advanced than others in attracting private funding. Florida State University and athletic director Michael Alford are believed to be seriously pursuing such a path, with public records obtained by Sportico and the Tampa Bay Times showing a multi-million dollar figure. It has become clear.
Although Weatherford is a member of the FSU Board of Directors, he is not involved in the Seminole family’s private equity business, he said. But perhaps in the not too distant future, Collegiate Athletics Solutions or some other organization will write a big check to your local athletic department.
“It’s basically like taking out a loan and paying it back over 15 to 20 years,” said another athletic director from a power conference. “The question is how desperate you are, because those bills have to be paid.”