Davis Polk partner and IP & Commercial Transactions practice head Frank Azzopardi was quoted in 9Fin discussing the increase in private credit investment in college sports due to a recently approved settlement that allows direct payments from colleges to student athletes.

The article noted that some schools will have to contend with extra costs or risk being outcompeted, which has opened the doors to direct lenders to invest in college sports. “Everything has changed considerably with the House settlement and the fact that these athletic programs are essentially now having taken a hit to their bottom line. They’re trying to come up with creative ways to be able to meet these payments to these athletes,” Frank said.

The clarifications around NIL sponsorships and revenue sharing have brought more certainty to college sports investments and builds on the momentum that professional sports have gained as an asset class in recent years.

“Look at all the professional sports in the US, their media rights have all been growing. And if you look at it internationally the same is true as well,” he noted. “With the college landscape, given that they’ve all been essentially run like non-profit enterprises without much involvement with outside credit and outside investment, I think some see an opportunity to potentially disrupt that and get involved.”

However, Frank mentioned that public universities need to be sensitive to any state laws that may restrict the purposes for which they can raise debt.

“There are issues to consider, public universities need to be sensitive to any state laws that may restrict the purposes for which they can raise debt,” he said. “As a non-profit, [those institutions] can’t enter into transactions with a for-profit entity that would impair [their] non-for-profit status. So the transaction has to be structured in a way that threads that needle.”

“Colleges are paying athletes — private credit wants to play ball,” 9Fin (July 16, 2025) (subscription required)

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