In a groundbreaking move for college athletics, the Big 12 conference is reportedly exploring the possibility of selling its naming rights to a corporate sponsor. This would mark the first time such a deal has been made in collegiate sports, following the recent House v. NCAA settlement.

According to sources confirmed by CBS Sports, the Big 12 is looking to secure a corporate sponsor that could bring in hundreds of millions of dollars to the conference. The need for new revenue streams has become increasingly important as the industry prepares to share profits with players, as outlined in the multi-billion dollar House v. NCAA settlement.

During a meeting in late May, Big 12 commissioner Brett Yormark presented the naming rights proposal to conference administrators in Dallas. The idea is to drop the "Big" from the conference name and replace it with the name of the corporate sponsor, while retaining the "12" to represent the number of teams in the conference.

The move comes as the Big 12 aims to close the financial gap with powerhouses like the SEC and Big Ten, who are set to dominate revenue through their lucrative television deals and College Football Playoff payouts. In the new 12-team CFP, the Big 12 is projected to earn $12 million per team annually, ranking fourth among the power conferences. In contrast, Big Ten and SEC teams are paid roughly $21 million each.

To further bolster their financial standing, the Big 12 is also exploring a potential private equity investment. Discussions with Luxembourg-based CVC Capital Partners are reportedly "pretty serious," with the investment potentially reaching $1 billion in exchange for up to a 20% stake in the conference.

Currently, Big 12 teams earn $31.7 million each from their media rights deal with Fox and ESPN, which runs through 2031. By combining this income with the potential cash infusion from private equity, the Big 12 could significantly narrow the revenue gap and compete more closely with the Big Ten.

A spokesperson from the Big 12 stated that these commercial opportunities, including private equity and naming rights, are being explored to ensure the conference remains highly competitive and can keep up with its rivals. The Big Ten, in particular, recently secured a lucrative media rights agreement with Fox, CBS, and NBC, set to earn its schools approximately $75 million per year.

To delve into the details of a possible private equity investment, a small working group of three Big 12 presidents has been formed. The conference's current rights deal is valued at $2.3 billion.

The settlement reached in the House v. NCAA lawsuit will soon require FBS programs to pay players for the first time in history. Schools are projected to distribute around $22 million annually to athletes, with an estimated $300 million being paid over the next decade for back payments and future revenue shares.

The growing interest from private equity firms in college sports has been seen as a validation of the industry's potential. Some schools, like Florida State, have already explored private equity opportunities, aiming to maximize revenue amidst ongoing revenue disputes.

While the Big 12 considers these financial options, not all conference commissioners are enthusiastic about private equity entering the collegiate sports realm. SEC commissioner Greg Sankey, for instance, has approached the matter with caution, acknowledging the potential risks associated with private equity partnerships.

As the Big 12 forges ahead with potential naming rights deals and private equity investments, the conference aims to secure its financial stability and competitiveness in the ever-evolving landscape of college athletics.

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