A new era of University of Utah athletics was announced Tuesday.
Understandably, there’s a lot of confusion about it.
As you’ve probably heard by now, the Utes are entering into an agreement with Otro Capital to create a spinoff, for-profit company that runs the business of Utah sports. But what does that mean exactly? Who is this Otro Capital? And how might this deal turn out well or turn out poorly down the road?
What just happened?
On Tuesday, the University of Utah announced its intention to form a for-profit company called Utah Brands & Entertainment that does much of what its athletic department currently does, especially with regards to the making of money. That means Utah Brands & Entertainment will control ticketing, sponsorships, events, and so forth.
That’s not particularly novel in the landscape of college athletics; Kentucky, Clemson, West Virginia, Michigan State, and Texas Tech have done the same. But what is new is that the Utes are inviting a private equity fund, Otro Capital, to join the business as a partner. Utah is the first major collegiate sports program to do that.
In the deal, Otro Capital will provide both immediate and ongoing financial support to the currently cash-strapped Utes sports program to the tune of hundreds of millions of dollars. Specific figures weren’t announced by the school, but Yahoo! Sports reported the deal is “expected to generate as much or more than $500 million in capital.”
Otro will have a large share, but not a majority share, in Utah Brands & Entertainment in return.
What is Otro Capital?
They’re a private equity fund specializing in sports entities founded in 2023. Currently, their portfolio of investments boasts just three names:
• Alpine Racing, the Formula 1 team that finished at the bottom of the Constructors’ Championship this year.
(Geert Vanden Wijngaert | AP) Alpine driver Pierre Gasly of France steers his car during the first practice session ahead of the Formula One Grand Prix at the Spa-Francorchamps racetrack in Spa, Belgium, on July 28, 2023.
• FlexWork Sports, a company that helps college and professional athletes around the country run youth sports camps.
• Two Circles, a data-driven sports marketing firm that has worked with the NFL, the Olympics, the English Premier League, Wimbledon, and others.
Despite the short list and short existence, Otro has more experience than it might seem in this game. Their co-founders Alec Scheiner, Brent Stehlik, Niraj Shah, and Isaac Halyard all were former executives at RedBird Capital Partners, founded in 2014. That company is one of the largest names in sports private equity, with stakes in AC Milan, Toulouse, Fenway Sports, and even ownership of the XFL’s rights.
Of those four founders, Scheiner has the most notable career so far. He was president of the Cleveland Browns from 2012-16 before he left and joined RedBird.
Otro had $839,430,865 in assets under management in their latest SEC filing.
Do these companies or these investors have ties to Utah?
The University of Utah didn’t highlight any ties in its proceedings on Tuesday. Yahoo! reported that Otro pitched this collegiate plan to other schools in the country, including at least one in the Big Ten Conference, before Utah showed interest.
However, there are some second-level ties. For example, the Huntsman Family’s investment arm purchased a stake in Alpine Racing at the same time Otro did. Former Utah Jazz president Dave Checketts was CEO of Legends Hospitality, a concession company where Scheiner was on the board of directors. It’s unclear if these ties or others led to the deal.
How does Otro prefer to operate its investments?
It’s a small portfolio and a unique project, so it’s a bit too soon to say. But those who follow the sports capital world closely say that Otro, like RedBird before it, likes to have more control over its investments than other sports private equity firms. From Buyouts:
“The strategy does not appear to be geared to acquiring team stakes in North American leagues sanctioning this activity. For private equity firms approved by MLB, MLS, NBA, and the NHL for investing of this type, the approach is typically passive non-control ownership. Instead, Otro’s strategy seems closer to that of RedBird, which favors control transactions.”
How will the split between the University of Utah and Otro Capital work?
The plans revealed Tuesday envision a seven-person board: Utah Athletic Director Mark Harlan and three other University of Utah Foundation members controlling four spots, two spots going to Otro Capital personnel, and one spot going to an outside Utah Brands & Entertainment investor. That board would select a president and staff to run the company.
(Chris Samuels | The Salt Lake Tribune) University of Utah President Taylor Randall speaks during a ceremony announcing the creation of the J.W. Marriott Jr. Institute for hospitality at the University of Utah, Friday, April 18, 2025.
A larger board is possible if those running Utah Brands & Entertainment want to bring in personnel with other areas of expertise. But even in this case, those with the Utah Foundation would earn “super” votes, giving them majority rule and the ability to decide the company’s direction.
Utah Brands & Entertainment would control the department’s stadium and events, media production and broadcasting, tickets and hospitality, partnerships and licensing, and brand and content. Each year, leadership would report back to Utah’s board of trustees.
Meanwhile, the University would still make competitive decisions like hiring or firing coaches, and the amounts players are paid via NIL and the school. Both would remain employees of the school. The university would also maintain control of the teams’ scheduling.
There’s much we don’t know, however. We don’t know the exact ownership percentage Otro and others will enjoy in Utah Brands & Entertainment, and we don’t know how payments back and forth would work. We also don’t know how much of the company’s doings will be public record, as Utah athletic department’s are now.
Why is Utah doing this deal?
In short, they need the money. In August, university athletic director Mark Harlan noted that they anticipated the athletic department would run at a deficit for the next few years; in 2024, they recorded a $17 million deficit. (Some of that was due to the school’s departure from the Pac-12, however.)
This is because athletic departments have suddenly needed large gobs of money in order to stay competitive on the playing field, as bidding wars for players in the NIL era have broken out. Some schools, like BYU and Texas Tech, have found the pockets of their donors to be sufficient to meet these needs. Utah, however, decided it needed to do something different.
(Rick Egan | The Salt Lake Tribune) Utah takes the field at Rice-Eccles Stadium.
Utah’s choices, then, were to either:
• Spend less on the athletic department overall — which would generally mean paying its players less, which would generally mean less talented players coming to the university.
• Cut other university programs to make up the shortfall.
• Run up large deficits to be paid for via loans, university subsidies, or school fees.
• Do a deal like this.
They chose the latter.
Speaking of boosters, how will they be involved?
In one of two ways:
First, if they’d like, they can continue to support the university with donations directly, just as they have done, with tax benefits. However, in this circumstance, they may not have access to some of the perks they previously had, which will now be controlled by Utah Brands & Entertainment.
Or, if they’re a qualified investor, they can invest directly into Utah Brands & Entertainment. In this setup, they’d certainly get some perks, and they’d also expect to see a portion of financial returns or shortfalls associated with their investment, depending on the success or failure of the venture overall.
Utah said a number of “university supporters, including philanthropic foundations” had already pledged to invest in Utah Brands & Entertainment. It’s not clear how much of the capital investment comes from these groups and how much comes from Otro Capital. It’s also not clear who can become an investor in the company at this time.
This is not similar to the Green Bay Packers’ setup where fans own the team, though. This is a small percentage of the overall ownership structure.
How might this end well?
University of Utah leadership discussed Tuesday an exit plan for Otro Capital in approximately the five-to-seven-year window from when the deal goes into effect in early 2026.
Under the terms of the approved resolution, Otro can exit by either selling its stake in Utah Brands & Entertainment to the university or to a partner that the university helps select. It does not have the ability to sell its stake to a partner the university doesn’t like.
It’s very possible that the new for-profit Utah Brands & Entertainment, partnered with Otro, is able to make the athletic department more money than it would have on its own. Otro does have significant connections and expertise in the field, and resume lines that currently don’t exist in Utah’s athletics program. Succeeding financially would raise the value of the entity overall, giving Otro a profitable exit to either the university or another approved big investor.
Even if revenues stay flat, Otro and the university might also be able to capitalize on the venture through the seemingly boundless increases in sports valuations over the years as billionaires compete for their chair across a limited number of high-profile ownership spots.
To use a local example: David Blitzer’s group purchased Real Salt Lake in 2022 for $400 million, then sold it for $600 million in 2025. We don’t yet know if college athletics companies along the lines of Utah’s will do the same, but it’s certainly possible. This outcome is better for Otro than the university, but Utah would still be able to receive more capital or borrow more money against the higher valuations moving forward.
How might this end poorly?
A few ways.
The first and most obvious would occur if Utah Brands & Entertainment begins to chase the almighty dollar beyond what Utes fans consider acceptable. That could be through higher ticket, concession and merchandise prices or changes to the fan experience. While the university retains majority board leadership, intra-board squabbles about whether money-making or the university’s values are more important wouldn’t exactly be pretty. Of course, they’d be bad news for the fans, too.
The second is if, in fact, revenues don’t increase under this new financial model, and Otro Capital and other boosters decide not to provide Utah with another influx of new capital in the years to come. Utah Brands & Entertainment’s for-profit venture would have to find places to cut — and that could come via personnel, stadium changes, or simply the amount of money it’s delivering to the athletic program for payments to athletes.
The third is if the college football ecosystem in some way moves beyond this model. Things have been trending in this capital direction for years, but we’ve also seen things change incredibly quickly in the space. Michigan’s board chairman, for example, called a similar capital exchange “a payday loan” — what if Michigan, say, is a deciding vote on allowing Utah to enter the Big Ten or another future conference, and decides Utah’s financial model doesn’t fit? They might be stuck in the dust.
In these cases, the future of Utah athletics would likely be diminished as a result of the control they gave up in the Otro scheme.
