The LSU athletics department has an operating budget problem. It has been operating around break-even for years. Since 2022, it’s lost about $2.72 million. In FY2025, it brought in $223.5 million in revenues, and after a transfer to the university, it ended the year with about $28,000.
But this year, like most major college football programs, it suddenly has a major new recurring expense thanks to a federal antitrust settlement— a $21 million-a-year athlete payroll.
LSU didn’t time this well. They also bought out Brian Kelly with roughly $54 million remaining on his contract, and hired Lane Kiffin at $91 million over seven years, among other medium-term expenses.
They need a lot more capital for operations now. Traditionally, such problems have been solved with donations and debt. For the first time in its history, LSU is now considering private equity.
In early August, LSU invited some of its largest donors to the Governor’s Mansion in Baton Rouge to pitch a for-profit investment in a new company. Reportedly, an outside investor has agreed to commit $100 million for 9% ownership and 7% of the profits.
This implies a nominal post-money valuation of something like $1.1 billion.
The investor appears to be Greg Williams, Chairman and CEO of Acrisure. He was one of the speakers that week. He has not been identified as having a prior connection to LSU, per public reporting. Interestingly, eight months earlier, he and his wife committed $401 million to Michigan State. Of that, $290 million was a gift to athletics and $100 million was an investment in a business tied to Michigan State’s athletic program.
The operating agreement hasn’t been released, which is not a minor detail. An LLC can divide ownership, voting, and profits in almost any way imaginable. Reportedly, the investor could sell after six years with board approval, subject to LSU’s right of first refusal, and another 11 percent of equity could be sold. More importantly, it’s not clear how the money will be used. Given what we know about LSU’s finances, it seems reasonable to assume that a significant part will go to near-term expenses.
To be fair, LSU says this isn’t ‘Private Equity.’ According to reports, Landry told the room he had been approached by more than fifty private equity firms and turned them all down. Charles Harvey, a donor who attended, summarized it afterward on a Baton Rouge podcast: “It’s not private equity. LSU will maintain control.”
Indeed, this would not be a transaction backed by a private equity firm. But it would be private capital buying a private equity stake in a company backed by LSU athletics revenue. So it depends on your definition of private equity.
The LSU plan is part of a larger shift in college athletics to use capital markets for funding. As discussed, Michigan State also raised private capital from the Williams family. In addition to their $290 million donation to athletics, Greg and Dawn Williams invested $100 million in an entity to be formed by Spartan Ventures, which is backed by revenue generated by MSU athletics.
Utah took an even more direct private equity route. It brought in outside capital and operating expertise to build a business around its athletics department. The new company will run commercial operations including ticketing, sponsorships, licensing, digital media, branding, and events. It hired a CEO and other executives from professional sports to run it.
Kentucky took perhaps the most creative approach. It did not sell equity. It formed a nonprofit and borrowed from itself. In April 2025, the university moved its athletics department into a nonprofit holding company called Champions Blue, which sounds to me more like a reasonably priced bourbon. Then, in June, the University of Kentucky Board of Trustees authorized the university to lend up to $110 million to UK Athletics and Champions Blue for capital projects and up to $31 million for operational support over two years. Notably, it also raised student fees.
The Big 12 appears to be leaning towards private debt. Its teams may be less valuable from a private equity perspective, which makes capital more expensive. It brought in Redbird Capital Partners and Weatherford Capital, which have offered a $12.5 million investment to the conference and credit lines of up to $30 million for each team at an interest rate around 10 percent. Most schools initially declined the offer.
The Big Ten also attempted a private equity approach. But Michigan and USC put the kibosh, for now, on a proposed $2.4 billion equity investment in the Big Ten. Each school would have committed media rights to the conference through 2046 in exchange for at least roughly $100 million. UC Investments, which manages the University of California system’s pension and endowment, would have received 10 percent of the newly formed company.
The common thread is that college athletics is beginning to use capital markets as a new source of leverage. This means a team’s valuation helps determine its cost of capital and the terms it gets. This is new. College football’s largest financial asset historically has been television, and conferences negotiate those contracts and distribute much of the proceeds according to conference rules. Historically, this has been fairly democratic.
The SEC, for instance, splits television money in roughly equal shares. Equal conference distributions allow Alabama and Mississippi State to remain economic partners despite attracting audiences of radically different sizes. It is one of the SEC’s great equalizers. It’s been that way for decades.
However, an equity investor will value the teams radically differently. In one compilation of audiences across the full 2024 regular season, LSU ranked eighth nationally with an average weekly audience of 3.58 million. Mississippi State ranked 43rd at 799,000. Equal shares, unequal assets.
There was already a gap between top-tier programs and everyone else. Private equity and debt markets could widen it. The largest brands get the best terms. They have the biggest audiences, the most inventory, and the least risk.
But they also have to fight to stay at the top with the same salary cap their competitors have.
In January 2026, during the first transfer window after schools began paying players directly, LSU offered quarterback Brendan Sorsby a one-year, $3.5 million NIL guarantee through Playfly, with at least $1 million more indicated in direct revenue sharing. Sorsby declined and chose Texas Tech, which reportedly offered $5 million.
LSU then signed quarterback Sam Leavitt for roughly $5 million, per ESPN. Later that month, LSU landed offensive tackle Jordan Seaton for more than $4 million, per CBS Sports. It is believed to be the largest package ever paid to a college lineman.
Four and a half million dollars was not enough to rent a college quarterback for one season.
The total market for US college-athlete compensation is roughly $4.5 billion for 2026–27, per reports. Football accounts for something on the order of $2.5 billion to $3 billion.
European football has already run this experiment. When La Liga took nearly €2 billion from CVC, it required clubs to put at least 70 percent of the proceeds into infrastructure and commercial growth. It capped spending on players and debt at 15 percent.
Barcelona refused, then sold 25 percent of its own television rights to Sixth Street for 25 years. The restrictions acknowledged the central problem: long-term capital belongs in assets that produce long-term returns.
Without such restrictions, the outcome is less transformative. Outside money does not create more elite quarterbacks or coaches. It creates more bidders for the same supply. Much of the new capital will go to players, coaches, and agents. Rivals will raise money in response, and the standings may look much the same. Everyone will have spent more to stand still, except now some schools will have investors and a board.
So will LSU gain an advantage with private equity?
Not exactly. College football has never imposed a common all-in team-budget or player-compensation cap. And LSU is not breaking any rules by monetizing a brand it spent decades building. Other teams can raise private equity. The bids won’t be the same.
But one legitimate risk is entrenchment. LSU, Michigan State, and other teams considering equity arrangements might be buying a structural advantage that makes the existing hierarchy harder to escape. The graphic above highlights that there has been a decent amount of class mobility in college football despite huge discrepancies in funding.
College football has historically allowed programs like Tennessee, Nebraska, and Miami to fall while LSU, Clemson, and Oregon rose. A financial hierarchy with more entrenchment and disparity could reduce that kind of class mobility. And if the same handful of programs become increasingly difficult to dislodge, the ultimate loser may not be Vanderbilt or Mississippi State. It may be the product itself. A sport with fewer plausible risers is more predictable and boring.
Daniel Sexton is a Partner at Vanguard Industrial Partners, where he focuses on industrial development and investment, and founder of Arkvera, a deal advisory firm that works with owners, operators, and investors on M&A, capital strategy, and complex transactions.