SALT LAKE CITY — Browse the list of what the University of Utah is seeking bids for these days, and you’ll find it wants to buy parts for power systems and that it’s seeking someone to redevelop the old Fort Douglas military installation.
What you won’t find is requests to bid on its sports teams. Yet, on Tuesday, the campus announced it was essentially selling a stake in Ute athletics to Otro Capital — a New York City-based private equity firm.
It’s a deal worth $400 million or $500 million, according to various news outlets. Normally, when the U of U wants goods or services for anything costing as little as $10,000, it seeks bids posted to a public website.
“All this seems to be backdoor discussions without the public,” said Katherine Biele, president of the League of Women Voters of Utah.
Biele said the league was not taking a position on whether private equity should be part of college sports. Its concern is transparency — how taxpayer money is used and how the deal could impact academics.
“Any kind of information helps,” Biele said. “When you keep everything private and behind closed doors, the public has no idea. And of course that’s where people get worried and confused.”
A U of U spokesperson on Friday said a public bid was not necessary because the new company will be owned by the University of Utah Foundation, an independent nonprofit. The foundation was acting on a directive issued by the university’s board of trustees earlier this year.
“The foundation reviewed many entities,” the foundation’s CEO, David Anderson, said in a statement, “including a large number of private capital firms that have experience in sports-related investments.”
Jerry McGinn, an expert on government and the director of the Center for the Industrial Base in Washington, DC, said it’s normal for government agencies to seek bids privately rather than publicly.
“And the word in that community was likely pretty well known that Utah was looking to do something,” McGinn said.
Ben Rosa, an assistant professor of business economics at the University of Michigan, said the U of U may have sought private bids because it had good information about what its athletics are worth.
“But if they don't,” Rosa said, “then, by not running an auction, by not requesting proposals publicly, they may have been giving up some value.”
University of Utah Foundation President David Anderson issued the following statement:
As you know, the university has been wrestling with the issues confronting our athletics programs for some time. Several months ago, university leaders, including the Board of Trustees, designated the university’s foundation to explore alternatives, potential impacts and whether a partner made sense, and if so, which one.
In consultation with trustees and university leaders, the foundation reviewed many entities, including a large number of private capital firms that have experience in sports-related investments. The foundation will oversee the partnership between Utah Brands & Entertainment and any final partner, including Otro.