Utah Athletics' Spending Problem: State Auditor Flags Private Equity Deal | Scotty G. & The Coach

追加: 2026-05-30

[00:00:00]Uh, there is a story in the Salt Lake Tribune, uh, from Jason Batica, saying that the state auditor, so this person's responsibility is to look at funds that are allocated throughout the state, whether it's universities, government, whatever it is, says this, they have concerns about the University of Utah's planned private equity partnership with O'ahu Capital.

[00:00:19]And this was, uh, they sent those concerns in a letter to the U- University of Utah's Board of Trustees on May 19th. Tina Cannon is the Utah auditor. She outlined what she she sees as, quote, "significant risks with the school's pending deal with O'ahu Capital." Now, background on this, many of you might recall uh, late last year Utah announced a first-of-its-kind private equity partnership with O'ahu Capital. It was supposed to net them somewhere in the hundreds of millions of dollars, as many as potentially as much as $500 million for their athletic department.

[00:00:54]That obviously had a lot of people saying, "Wow, that's a lot of money."

[00:00:56]Obviously, cuz in this day and age, you talk about college athletics, the amount of money that is needs to be generated is in the hundreds of millions of dollars.

[00:01:05]The problem is this deal has still not been finalized. The initial, uh, uh, statement from Utah said they were planning on finalizing it first quarter 2026.

[00:01:16]Now, we are almost at the end of the second quarter of 2026.

[00:01:19]>> mind-boggling how fast it goes.

[00:01:21]>> It does. But, in this story, U- University of Utah issued a statement to the Salt Lake Tribune saying that they plan to have it done by the end of the fiscal year, which is I think July 31st is when the fiscal year ends. So, they're thinking they're going to have this done in the next 2 months. That brings us to this, though. In Tina Cannon's, uh, uh, letter, she wrote this, quote, "To avoid reporting losses," unquote, "the athletic department used millions from its financial reserves to cover what otherwise would have been a loss."

[00:01:52]They The The report here says they reported a surplus of $4.69 million dollars its most recent athletics financial report, but the way that they made it look like they had the surplus, Tim, is they used 19.4 million dollars from their reserves to make that look that way.

[00:02:11]>> Oof.

[00:02:13]That's That's um so it's kind of what I not to those numbers, but that's what I do with my checking account.

[00:02:18]>> [laughter] >> You know.

[00:02:19]>> Robin Peter to pay Paul, yeah.

[00:02:21]>> Yeah, but I don't know that that should be how you're doing it with all those, you know, with all the taxpayer money and everything else that's going on.

[00:02:29]>> Now, the So, the the additional issue here says the athletic department reported a 60 Excuse me, they reported 61.5 million dollars in reserves in 2024. So, just 2 years ago, Tim.

[00:02:42]That's quite a bit of money. 60 million dollars nothing to sniff at.

[00:02:45]And just over 42 million dollars as of last year in 2025.

[00:02:51]The problem is this year that number's estimated to drop to a paltry 5.8 million dollars. So, you are going to burn through all the >> wrong You're You're saying it's going the wrong wrong way.

[00:03:03]>> You've burned through 55 million dollars of your reserve funds.

[00:03:06]>> In 2 years.

[00:03:07]>> years.

[00:03:08]>> That doesn't seem sustainable, at least, you know, the math that I was taught.

[00:03:13]>> No.

[00:03:13]>> [laughter] >> Now, >> I know they learn math different now, but when I did math >> By the way, [laughter] Lloyd, you know this as well as I do. If you try to do math with your kids recently, it's weird.

[00:03:23]>> You just say, "Hey, just do it. Hey, just let me show you."

[00:03:26]>> I'm [laughter] just saying. I got I'm getting >> drawing pictures and >> I'm getting re-taught how to do math, but that's beside the point here. Now, as often as the case, Tim, a lot of people will tell uh people and it comes when it comes to financial type stuff, a lot of the times people will will say, "It's not that we have a revenue problem.

[00:03:46]It's that you have a spending problem.

[00:03:49]You want to spend and you want to keep up with the Joneses. You want to have the best and the brightest and the newest and the flashiest. You want to have all of that.

[00:03:58]The issue here is is that in Cannon's letter to the University of Utah's Board of Trustees, it says that there is no plan here to rein in spending at the University of Utah, therefore causing her to have concerns about the overall financial outlook and future health of Utah athletics.

[00:04:18]That is the problem. It's a spending problem. It's not a revenue problem.

[00:04:21]It's the fact that they're spending faster than they can replenish that fund. Well, who isn't?

[00:04:27]Well, that's a great question because I know there's a >> You know this is the day and age, I'm telling you everybody's strung out there. And I know BYU obviously doesn't get into that. Like they they actually run their deal way different and it's got a >> That's a mandate from the university.

[00:04:43]>> Right.

[00:04:43]>> Cuz the university tell I'll just You know this as well as I do. You were told this straight up.

[00:04:48]In the BYU athletic department, main campus will never never send money over to the BYU athletics. BYU athletics has to eat what it kills. They have to generate all their funds and they are told, it's mandated, you operate in the black.

[00:05:01]>> Well, I'll give you a perfect example.

[00:05:02]The annex, you know, that way that deal got done.

[00:05:06]The the money had to be in the bank >> Correct.

[00:05:09]>> before the building could be planned and then >> before ground was even like broken, right?

[00:05:15]>> Right. Your money had to be in the bank >> to pay for the entire thing. It's not just like It's not like, "Hey, give 50% we'll go for it." No, it's >> had to have a budget. It had to be mapped out and you had to have the money in the bank to pay for that project. So, what obviously Utah's done here is they've gone and had the years they've had and then they've had money in the bank, had reserves from great years, and they're peeling through that money very fast. And it doesn't surprise me because everything I hear, doesn't matter if I talk to a football coach, a baseball coach, a basketball coach, an AD.

[00:05:49]Every every single one of them, we got to find more money.

[00:05:51]>> Yeah.

[00:05:51]>> What everybody's saying because you know, some of a lot of the spending you do you say keep up with the Joneses, but that's the game you're in.

[00:06:00]>> Correct.

[00:06:01]>> And especially with the the super leagues and everything looming everybody's trying to position to get their spot there.

[00:06:08]>> Mhm.

[00:06:09]>> And so of course you're you're going to put your best foot forward and in many cases that's to spend beyond what you got and figure it out later.

[00:06:17]>> So and this is where the interesting part about this comes out is it says the University of Utah still has to make payments up to roughly $119 million in bond payments with interest. Those are currently slated to go through 2041 on past projects. That doesn't include anything new that you may do and that also includes the recent expansion of the Ken Garff Red Zone at Rice-Eccles Stadium at South end of the, by the way, an incredible addition to that stadium.

[00:06:42]But yeah, you still have $119 million on the books and that's just in past projects, Tim.

[00:06:47]That's not adding anything. I know that Kyle Whittingham when he was here, he wanted to have a new football indoor practice facility built and there were talks about it happening and it hasn't come to fruition. And I do wonder if that's linked with this issue.

[00:07:00]>> I wonder do can they you like repo an end zone?

[00:07:04]Somehow some way like somebody pulls in and just starts taking apart that luxurious end zone.

[00:07:09]>> the south end. It's ours. I don't >> the payment or we're taking seats.

[00:07:15]>> So this is going to be very interesting to see how the University of Utah operates here. And uh the state auditor also in this letter expressed concerns about quote a loss of institutional control given Utah's ownership model with the Crimson brand that would be uh created in partnership with Otro Capital.

[00:07:34]So this is getting some scrutiny up on Capital here, Tim. And that was one of the things I have been monitoring this situation because once again, this is a first of its kind private equity deal that uh the University of Utah entered in. There are a lot of people across the college sports universe that were super intrigued to see where this was going to go cuz they wanted to see, "Okay, if this can work, yeah, we're all going to get in cuz it could if it could get you up to $500 million, yeah, everybody's going to be like, "Yeah, I'll I'll take that money."

[00:08:05]But, the way it appears right now based on what this state auditor is saying is that they're concerned about the overall health and just the future for Utah athletics in terms of being viable. And that that is where things can come crashing down.

[00:08:19]>> Every dirty deal was sold to somebody.

[00:08:21]>> Mhm.

[00:08:22]>> And you just sit back and wonder if that's going to be one of those. Um there's a lot still to go.

[00:08:28]>> Mhm.

[00:08:28]>> But, it's interesting the Big 12 actually went the route of venture capital as well.

[00:08:32]>> They did.

[00:08:33]>> And and put that in play for schools if they need it. You know, if they're in financial distress.

[00:08:39]So, uh just add that to the litany of things we've talked about that are haywire.

[00:08:46]>> Yeah.

[00:08:46]>> And mean I guess major mainly different than what we're used to. And so, it's just getting all that stuff reigned in.

[00:08:53]>> So, this and you mentioned the fact that the Big 12, they have entered a partnership with RedBird Capital as well as Weatherford Capital, which are uh private capital groups in their own right. And they're offering up to $30 million to every Big 12 member school uh if they want it. Now, it does have a rate of return. It's a it's a loan of 10% or or somewhere thereabouts. And the way it's paid back is if you take the $30 million, RedBird and Weatherford get to take their cut of your uh TV revenue money before you ever see it. That's the way that it's paid back to them.

[00:09:27]The vast majority of the Big 12, I know BYU >> your tax return early.

[00:09:31]>> Yeah. In essence.

[00:09:32]>> But, somebody's taking their cut of it before you even see that check if that makes sense. Like they're they're taking their >> FICA.

[00:09:39]>> Yeah, sure.

[00:09:40]>> More FICA.

[00:09:41]>> And so BYU, Texas Tech, the vast majority of the Big 12 schools came out and said, "We're not interested in this." The last I heard, and if anybody by the way out there listening knows if Utah has commented on this, let me know cuz I have not been able to find it.

[00:09:58]Utah, I don't think has ever said yes or no if they're going to take up the Big 12 on this opportunity.

[00:10:03]>> I can't imagine they would uh with all this other stuff. Uh but this this is I guess the bottom line with this story.

[00:10:11]There is a profound risk, this is a quote, that the financial gains and investor returns may be prioritized over long-term and long-held institutional values. So, it comes down to that one word. It's who's controlling what?

[00:10:25]>> Mhm.

[00:10:26]>> And you know, that's that's a big thing to wrestle for because, you know, there this is much bigger than this segment.

[00:10:33]This is much bigger than Mark Harlan's reign. Um you know, I've I'm a couple years removed. I've seen different regimes come through BYU. And that's the way it works. You know, it moves on and it's not about you, so you can't you can't compromise the long-term. And you And that's always got to be at the front of your mind. So, it'll be interesting to see how this shakes out.

[00:10:52]>> Yeah, uh kind of groundbreaking stuff and I got to give uh props to Jason Bateman. He he got a hold of this letter.

[00:10:58]>> story.

[00:10:59]>> And it's it is something to monitor.

[00:11:01]There's no doubt about this because that O'ahu Capital deal, I remember it made waves in the college sports universe when it was a when they first said, "Hey, we're entering this agreement."

[00:11:09]Now, they say that they still are planning on finalizing that deal. Is that the Is that the break that Utah needs? But also, is what you mentioned, that quote from the auditor. Is it prioritizing short-term financial gain over long-term health and viability?

[00:11:26]That that's the balance that they're going to have to answer for.

[00:11:29]>> And and the institution's got to have a say. I mean, that's that's the name they're all out there representing.

[00:11:35]>> No doubt.