The Big 12 has struck its long-discussed private capital deal — the first such publicized conference-wide agreement in major college sports.

The league’s presidents and chancellors ratified the five-year agreement with capital partner RedBird last week, as well as Weatherford Capital, finalizing a three-prong package: to deliver an infusion of capital — at least $12.5 million — to the league office to drive commercial development and business growth; offer schools an opt-in capital credit line of $30 million each; and create a strategic business partnership that could pay off when the conference next goes to market for its media rights contract.

The Big 12 is describing the deal as the “RedBird Business Development Partnership.” As part of their Collegiate Athletic Solutions partnership, the firms are co-investing the infusion into the conference with an expected return. However, the capital partners will hold no ownership in the league and the deal will not change the operation or governance of the conference, commissioner Brett Yormark told Yahoo Sports.

The $12.5 million in capital to the league — a number that could grow — will be invested in “revenue-generating opportunities,” Girod said.

Perhaps one of the most noteworthy benefits of the deal is the exclusive college partnership with RedBird, a New York-based investment management firm with $15 billion in assets and an array of companies within its portfolio, including Paramount Global.

Paramount holds ownership of CBS and soon is expected to acquire TNT — two of the leading broadcast partners within the college sports ecosystem. The Big 12’s current media deal — primarily owned by ESPN and Fox — ends in 2031. A league’s media rights deal usually accounts for a majority of a conference’s revenue distributed to its member schools.

It’s unclear how many of the Big 12’s 16 universities plan to accept the option of up to $30 million in credit. Schools have one year to make a decision on the one-time capital infusion. Those within the conference believe that as few as two and as many as a half-dozen programs plan to take the money, which comes at a rate just south of 10%.

In one of the more publicized proposals, the Big Ten negotiated for months an equity and capital partnership with UC Investments only to see the deal paused as two members, USC and Michigan, opposed the plan. Months ago, the SEC began working with investment banker Goldman Sachs in an effort to explore potential partnerships, even though the league’s presidents have publicly and privately expressed their resistance to such deals.

However, the amount of cash involved cannot be ignored.

Capital infusions pose a threat for those not taking the money. Those without capital dollars risk being placed at a financial disadvantage, potentially in the recruitment of both athletes and coaches.

Big 12 and ACC schools are already at a disadvantage financially from the SEC and Big Ten, whose television contracts distribute more cash to their schools. The capital infusion may help the Big 12 close a gap that continues to widen between the league and what many have deemed the “Power 2” of the SEC and Big Ten.

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