Florida State University and private equity giant Sixth Street mutually agreed to end talks about a possible investment into the athletic department about a year ago, according to multiple people familiar with the negotiations.
The talks, which began in 2022, were among the earliest known conversations about how institutional capital might break into modern college athletics, and they advanced quite far, with one source saying the two sides had the structure of a deal in place before things drifted apart. Two main points of uncertainty—FSU’s legal battle to leave the ACC, and ongoing settlement talks in House v. NCAA—proved too hard to overcome, said the people, who were granted anonymity because the details are private.
The school currently isn’t in serious talks with other firms, though that could change in the future, the people said. Representatives for FSU’s athletic department, Sixth Street and JPMorgan Chase, which was working with FSU, declined to comment. A Sportico open records request for recent athletics communications utilizing key search terms related to Sixth Street, JPMorgan and the PE project was recently returned with no relevant unredacted documents.
Florida State began looking earnestly at outside investment in 2022, Sportico previously reported, citing documents obtained from the school. The project, which the school nicknamed “Project Osceola,” included conversations with both Sixth Street and sports-centric PE firm Arctos Partners. The talks eventually focused solely on Sixth Street, with a structure that included the creation of a NewCo that would house Seminoles commercial rights.
Last December, Florida State announced that it had sued the ACC, claiming the $500-plus million fee to exit the league was unenforceable. Almost immediately, the ACC responded that the school was in violation of its obligation to the conference. That began a protracted legal battle that has since widened to include other schools and multiple state attorneys general. The parties remain in litigation. At the time, many speculated that the private equity talks could accelerate FSU’s departure by helping fund an exit fee. In reality, the sources said, the uncertainty of the litigation made an already complex deal structure even less certain.
As FSU and the ACC began their public disagreement, lawyers for the NCAA and various plaintiffs were in talks on a multibillion-dollar settlement that would end the legal threat from multiple antitrust lawsuits against the college sports establishment. That $2.8 billion agreement, which has taken multiple forms and is now under preliminarily approval, still faces legal hurdles and does not prevent future antitrust lawsuits from being filed.
The settlement would pave the way for schools to more directly share revenue with athletes. Many in college sports have viewed that settlement, should it happen, as a potential catalyst for PE deals.
FSU spent $172 million on athletics in fiscal 2023, the 17th-highest total among all public schools, according to Sportico’s college finance database. In the ACC, only Clemson ($174 million) spent more. But Florida State, its fans and its boosters are looking toward the Big Ten and SEC for comparisons, and they have been outspoken about their fears of falling behind financially. The top spending school in the Big Ten was Ohio State at $275 million; in the SEC it was Texas at $232 million.
The school’s athletic department is also structured in a relatively unique way. The FSU Athletic Association oversees, manages and operates the department, but reports far less in revenue than similar organizations at schools like Florida or UCF. There’s also FSU itself and school fundraising arm Seminoles Boosters Inc. Sportico outlined the structure, and the financial implications, in a story earlier this year.
Though the Sixth Street talks didn’t end in a deal, FSU has sought other capital. The Seminoles’ athletic department is looking to raise $326.6 million from a series of bonds issued this year and backed by athletic department revenue.
Sixth Street has more than $80 billion in assets under management. Its sports portfolio includes a controlling stake in the NWSL’s Bay FC; investments in the San Antonio Spurs, Real Madrid and Barcelona; and ownership of premium hospitality and experiences company Legends.