The state auditor has concerns about the University of Utah’s planned private-equity partnership, saying that the money it brings in won’t offset expenses for long unless other changes are made.
In a letter sent to the U.’s board of trustees on May 19, Utah Auditor Tina Cannon outlined what she sees as “significant risks” with the school’s pending deal with Otro Capital.
The private-equity plan — which was announced in December and has yet to be finalized — is expected to infuse hundreds of millions into the U.’s athletic department.
But the auditor’s letter said unless the deal is accompanied “by substantial growth in operating income or meaningful cost-containment measures,” the millions provided to the U. will be “inevitably depleted,” leaving Utah’s long-term financial issues “unresolved.”
“There is currently no observable plan to decrease spending,” reads the letter obtained by The Salt Lake Tribune. “In fact, expenditures are increasing and public commitments of additional expenditures ... all but ensure record expenditure levels by the athletic department in the current and in future years.”
In a statement provided to The Tribune, the U. said it “appreciates the Utah State Auditor’s review and recommendations around prudent and transparent administration of public assets.”
The Utes’ dwindling reserves
The U.’s athletics department has operated in a deficit in recent years.
But “to avoid reporting losses” in 2025, Cannon wrote, the athletic department used millions from its financial reserves to “cover what otherwise would have been a loss.” Utah reported a surplus of $4.69 million in its most recent athletics financial report, but only after using $19.4 million from reserves.
The athletics department reported $61.5 million in reserves in 2024 and just over $42 million in 2025. That number is estimated to drop to $5.8 million this year, according to Cannon’s letter.
(Bethany Baker | The Salt Lake Tribune) University of Utah Athletic Director Mark Harlan would serve as the chairman of a board that oversees the newly formed Crimson Brand Partners.
“Those reserves, at their current trajectory, will likely be exhausted within the next two fiscal years,” the letter reads.
The U. still has to make payments up to roughly $119 million in bond payments with interest through 2041 on past projects, including the recent expansion of the Ken Garff Red Zone at Rice-Eccles Stadium.
Utah has also shown interest in a potential renovation of the aging Jon M. Huntsman Center.
Alongside the debt payments and proposed renovations, Utah will hope to stay competitive with revenue sharing, which allows programs to share up to $20.5 million with their athletes each year.
With that, Cannon concluded that “while an influx of capital may provide immediate liquidity, its utility is limited in the absence of a sustainable operational model.”
Other concerns with the plan
After six months of negotiations, the U. says it is closing in on a finalized deal with Otro.
“This is an unprecedented and innovative deal,” the U. said when asked why an agreement hadn’t been reached yet. “The university is optimistic that it will be finalized by the end of the current fiscal year.”
Utah’s arrangement with Otro Capital would be the first of its kind in college athletics. Among other things, it would move revenue assets — such as ticketing, media rights, corporate sponsorships and more — from the university to the newly created LLC called Crimson Brand Partners.
A university spokesperson confirmed that Crimson Brand Partners “has been coordinating with the U. on the transition of functions” while negotiations continue.
Crimson Brand would have a majority ownership of the company, with Otro taking a minority ownership position.
In the letter sent to the U., though, the state auditor expressed concerns about a “loss of institutional control” given Utah’s ownership model with Crimson Brand through Utah Growth Capital Partners Foundation.
“The Foundation was intentionally structured and created in a manner so that it is not legally controlled by the university,” Cannon said.
Cannon’s letter then raised concerns about the potential for federal legislation banning private equity in college athletics, as well as the impact the deal might have on the university’s nonprofit mission.
“There is a profound risk that financial gains and investor returns may be prioritized over long-term and long-held institutional values,” the letter said.
Cannon also said that transparency could be an issue under the proposed arrangement.
“It is quite possible that many of the future decisions regarding the entity, its arrangements with the Foundation and Otro may all occur behind closed doors and absent any public discussion or disclosure,” the letter stated. “ … Ultimately, if the details of this arrangement are shielded from clear and open public scrutiny, the resulting skepticism has the potential to erode long-established public trust in the university.”