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Nada Usina is CEO & Co-Founder of NU Advisory Partners.

getty​In working with private equity (PE) leaders for the last few decades, I’ve noticed one surprising area where their interest and money has begun to pop up quite frequently: college sports. This growing interest in college athletics brings a welcome new source of capital to a sector under financial pressure, while also creating a leadership challenge that deserves more attention.​

University athletic departments are led by administrators who oversee budgets, fundraising, compliance, facilities and the student-athlete experience. Depending on the size of the school and its athletic teams, these can be massively demanding roles, often carried out within complex university systems.

For example, a university football team can have tens of millions of fans worldwide, making it an international organization. When you add in PE, there comes another set of responsibilities: generating returns, allocating capital against a defined strategy and reporting performance to investors.​

Budget Management Doesn’t Compare To P&L Ownership​Managing a budget and owning a true profit-and-loss statement require different skills. My work with PE firms, as well as collegiate athletics executive hiring, has given me a close view of both environments. As a former college athlete and coach, as well as executive recruiter in that space, I also understand the traditional strengths of athletic department leaders. That combination gives me a multifaceted perspective of this new trend, and I’ll say it plainly: Most collegiate sports leaders are not prepared for the demands of managing and reporting to a PE firm.​

A budget administrator is often measured by whether resources are distributed responsibly and spending remains within approved limits. An executive with P&L ownership, on the other hand, must also determine where to invest, which revenue streams to expand, what to stop funding and how each decision affects growth and profitability.​

This distinction comes up frequently in executive search. When we recruit for public companies and PE-backed businesses, candidates are assessed through a different lens. A leader who succeeds inside a large, established organization may have deep functional expertise but limited experience building new revenue streams or transforming operations at the pace investors expect.​

Having interviewed thousands of highly accomplished executives, it’s clear that not all can make the leap even from corporate to private equity-backed environments, let alone from college administrator to PE-backed operator. The alignment of objectives and a value-creation focus, as well as the pace previously mentioned, are all criteria that are important to assess against. Investors need to assess risk, and incoming CEOs need to show proof of their ability to meet the demands of investors.​

College athletics will need to apply the same rigor expected across modern businesses, pairing institutional knowledge with commercial experience in areas such as media rights, sponsorships, licensing, ticketing, data and new fan products. Leaders have to balance growth and financial performance with the priorities of multiple stakeholders, including presidents, trustees, faculty, alumni, donors, athletes, families and fans, while also prioritizing athlete welfare, academic standards and the institution’s reputation.​

In my experience in this space, I frequently see PE-backed CEOs answering to several investors and independent board members—all working toward a defined timeline for returns. While there are parallels in stakeholder management between PE-backed companies and college athletics, PE firms impose much shorter deadlines, have much greater financial pressure and offer far less tolerance for missing performance targets. Both roles involve owning a P&L, but they require very different skills and experience.​

The Growing Role Of Tech In Investment​Another thing college sports programs will need to consider as PE funding extends into their industry is how technology plays a role in this space. They’ll be expected to embrace data-driven sports technology, adopt the latest tools for tracking attendance, marketing and revenue and use AI to optimize ticket pricing and personalize the fan experience.​

This is another added layer of complexity for these leaders. They’ll need to properly vet which tech makes sense for their teams, while also holding responsibility for data governance, privacy and cybersecurity, especially when systems involve student-athlete information.​

College athletic leaders don’t need to be technologists, but they do need enough technical fluency to evaluate investments, hire the right experts and remain accountable for the results. Using AI to improve efficiency usually requires difficult staff-trimming decisions, but colleges are often slow to make structural changes. Replacing the athletic director alone may not be enough.​

Pause And Strategize Before Taking PE Dollars​Before accepting outside capital, university leaders and boards should define the purpose of the investment. Funding a facility is a completely separate objective from building a new commercial business. Each calls for different capabilities and may require a different leadership structure.​

Next, assess your existing team against your defined purpose. Who has owned a P&L? Who has led a transformation? Who has managed investor expectations or built revenue outside traditional channels? Which leaders can make commercial decisions, while also preserving trust across the university community? Are you willing to compensate them like PE-backed portfolio CEOs would be compensated? ​

Some institutions may find those capabilities in one executive. Others may need to pair an athletic leader with executives from finance, media, technology or professional sports.​

Select Your Leaders Based On Your New Needs​PE may help modernize college athletic programs and help them pursue opportunities they couldn’t fund on their own, but long-term outcomes will depend on more than the investment terms. Your favorite team’s level of success will hinge on whether institutions select leaders whose experience matches the work the capital is intended to support.​

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