Key Takeaways
- • The Kansas Board of Regents unanimously approved, at a special Friday meeting, a policy amendment requiring officials at the six state universities to notify board leadership of "material discussions" about partnerships between athletic departments and private equity or venture capital firms.
- • All contracts and agreements between a university athletic department or athletic-affiliated corporation and private equity or venture capital entities must receive Board of Regents approval before implementation.
- • The policy was prompted in part by the Big 12's April ratification of a five-year financial arrangement with College Athletic Solutions, a partnership between RedBird Capital Partners and Weatherford Capital.
- • The policy excludes coaches' contracts, conference agreements, revenue sharing, and name, image and likeness deals from board oversight, per a revised draft.
- • Board chair Alysia Johnston and general counsel John Yeary indicated the disclosure trigger would not apply to initial exploratory meetings, and regent Peter Johnston argued that ambiguity in the language provides useful flexibility.
Summary
The Kansas Board of Regents amended its policy to require officials at the six state universities to notify the board's leadership of discussions about partnerships between intercollegiate athletic departments and private equity or venture capital firms, according to Kansas Reflector. The board unanimously approved the change at a special meeting on Friday rather than waiting for its regular Wednesday meeting in Wichita; Kansas Reflector reported it was unclear why the board opted for the special session. Under the policy, university officials must notify the Board of Regents' CEO and board chair before engaging in "material discussions" likely to lead to a proposed transaction, agreement or arrangement. The phrase is intentionally undefined. In addition, all contracts and agreements between a university athletic department or athletic-affiliated corporation and private equity or venture capital entities must be approved by the board before implementation.
The policy follows the Big 12 Conference's April ratification of a five-year financial arrangement with College Athletic Solutions, a partnership between RedBird Capital Partners and Weatherford Capital. The Big 12 office received $12.5 million to promote commercial development, and each of the 16 conference universities was offered a $30 million line of credit at an interest rate near 10%, repaid through conference revenue sharing. Kansas State and most other Big 12 schools said they would not accept the credit line, while the University of Kansas had not decided. According to Kansas Reflector, the arrangement did not transfer university or conference governance authority, ownership interests or revenue rights to College Athletic Solutions.
An earlier draft was revised to state that the board would not assume oversight of coaches' contracts, conference agreements or name, image and likeness deals. Board chair Alysia Johnston of Edna said the board wanted to support universities facing short-term athletics financial pressures without jeopardizing long-term interests, and warned against actions that could remove control or harm the finances and sustainability of athletics programs and universities. She said the board could enter executive session to protect proprietary information or trade secrets, while final votes remain subject to the Kansas Open Meetings Act.
Regent Blake Benson of Pittsburg questioned whether the phrase "material discussions" would be universally understood. Board general counsel John Yeary said the disclosure requirement would not be triggered by an initial meeting with a private equity company, but could apply if interest develops into a more serious discussion. Regent Peter Johnston, a Salina attorney, said the ambiguity was beneficial and that institutions need considerable flexibility in this area.
The policy follows the Big 12 Conference's April ratification of a five-year financial arrangement with College Athletic Solutions, a partnership between RedBird Capital Partners and Weatherford Capital. The Big 12 office received $12.5 million to promote commercial development, and each of the 16 conference universities was offered a $30 million line of credit at an interest rate near 10%, repaid through conference revenue sharing. Kansas State and most other Big 12 schools said they would not accept the credit line, while the University of Kansas had not decided. According to Kansas Reflector, the arrangement did not transfer university or conference governance authority, ownership interests or revenue rights to College Athletic Solutions.
An earlier draft was revised to state that the board would not assume oversight of coaches' contracts, conference agreements or name, image and likeness deals. Board chair Alysia Johnston of Edna said the board wanted to support universities facing short-term athletics financial pressures without jeopardizing long-term interests, and warned against actions that could remove control or harm the finances and sustainability of athletics programs and universities. She said the board could enter executive session to protect proprietary information or trade secrets, while final votes remain subject to the Kansas Open Meetings Act.
Regent Blake Benson of Pittsburg questioned whether the phrase "material discussions" would be universally understood. Board general counsel John Yeary said the disclosure requirement would not be triggered by an initial meeting with a private equity company, but could apply if interest develops into a more serious discussion. Regent Peter Johnston, a Salina attorney, said the ambiguity was beneficial and that institutions need considerable flexibility in this area.
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