The $500M private equity play to boost Texas college football programs

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The Texas Permanent School Fund (PSF) has teamed up with a private equity firm to help Power-4 schools in Texas be competitive in a rapidly evolving college sports landscape.

The PSF is a special governmental corporation that operates a perpetual fund to supplement state taxes for funding public K-12 schools, distributing over $2.2 billion each year to cover a portion of educational costs while also providing guarantees for district bonds at lower interest rates. According to Sportico, the PSF has one of the nation's largest endowments, with over $57 billion in assets.

On Monday, the Sports Business Journal announced that Elevate, a sports consulting firm, will operate a joint initiative funded by the PSF and Velocity Capital Management called the Collegiate Investment Initiative, which will provide $500 million in funding for collegiate athletics programs pursuing "capital-intensive projects," such as facility upgrades and renovations.

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On Friday, Judge Claudia Wilken approved the House v. NCAA settlement, which allows schools to spend $20.5 million on their athletes for their name, image and likeness. This landmark decision dismantles amateurism in collegiate athletics, but there are concerns that the rich will only grow richer while schools with less lucrative media deals struggle not only to compete but also to finance sports that do not generate as much revenue.

While Texas and Texas A&M are two of the most esteemed programs in the country, the University of Houston will opt into the spending cap despite having the lowest athletic budget at $80 million in the Big 12. The American Athletic Conference also established a minimum standard for its member schools, including Rice, UTSA and North Texas, requiring them to share at least $10 million with their athletes over a three-year period starting with the 2025-26 academic year. That $10 million encompasses $2.5 million in scholarships, $2.5 million in Alston awards and direct revenue.

Elevate, a sports consulting firm that spearheaded the Collegiate Investment Initiative, will then allocate the funds to support projects that help Power-4 athletic departments in the state that may be financially constrained in the new era of college sports.

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Elevate has previously collaborated with Rice Athletics, as well as the Atlantic Coast Conference, Southeastern Conference, League One Volleyball and the San Antonio Spurs, according to its website. It serves nearly 70 clients across the collegiate landscape.

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