In a historic move, the House v. NCAA settlement has laid the groundwork for private equity to enter the world of college football. The landmark agreement reached between the NCAA and the Power Five conferences comes with a staggering $2.8 billion settlement, signaling a significant shift in the college sports landscape.

Gerry Cardinale, the founder and CEO of RedBird Capital, had already hinted at the potential for private equity to infiltrate college sports during his speech at the Sports Business Journal Collegiate Athletic Forum. Cardinale emphasized that college football was undervalued compared to professional football, with a fraction of the revenue and media rights earnings.

Bringing in private equity investment promises to further widen the gap between the haves and have-nots in college football. Cardinale, known for his successful acquisition of AC Milan and ownership stakes in the Pittsburgh Penguins and Boston Red Sox, expressed interest in investing in college football. He even estimated the worth of a brand like Michigan football to be at least a billion dollars.

The House settlement has now officially cleared the way for private financing to enter college sports. The financial powerhouses, including RedBird Capital, are now ready to invest significant amounts of money into top athletic departments. Cardinale's new venture, College Athletic Solutions, plans to invest $50 million to $200 million in 5-10 leading athletic programs. RedBird Capital, partnered with Weatherford Capital, is expected to extend its investments to other power schools as well.

This influx of private equity funding will address the rising costs of competing in college football. With the increasing professionalization of the sport, schools find themselves needing additional resources to stay at the top level of competition. The settlement requires Power Five schools to contribute an average of $22 million annually for the next ten years. This financial burden, along with the need for expanded rosters and scholarships, could push the yearly commitment to as much as $30 million per school.

While private equity firms seek a return on their investment, they do not intend to interfere with the day-to-day operations of athletic departments. Instead, they view this as an opportunity to invest in undervalued properties. By acquiring interests in iconic programs like Texas, Michigan, and Ohio State, the firms aim to capitalize on the prestige and brand value associated with those institutions.

This trend towards private equity investment marks a significant shift in the dynamics of college football. It solidifies the ongoing divide between the power schools and those on a lower tier. The SEC and Big Ten conferences, for example, already capture a substantial portion of the College Football Playoff media revenue, further polarizing the landscape.

As schools seek to secure their position in the hierarchy of college sports, private equity becomes an attractive funding option. The settlement not only allows for players to be compensated for their services but also highlights the need for substantial investments to support the evolving nature of college athletics.

While the future implications of this settlement and private equity involvement remain uncertain, one thing is clear: the college sports industry is being reshaped. It may only be a matter of time before a central player representative emerges, but for now, attention is focused on the potential impact private equity will have on college football.