When Charlie Baker left the Massachusetts Governor’s Mansion in 2023 for the last time as its resident, he presumably had a whole host of professional options to move onto as America’s most popular governor. However, few foresaw Baker choosing his path to running the NCAA, and fewer understand now why this would be anyone’s choice of “next challenge.”

While Baker certainly brought years of executive experience with him to the role, he was effectively signing up to steer the Titanic after the iceberg had been hit. The NCAA’s authority had been waning after a decade of blistering lawsuits and the moribund leadership of its previous commissioner, Mark Emmert. Member schools who had benefited handsomely from the exploitative labor structure of Victorian-era amateurism were forced to contend with the new reality that they couldn’t pay their coaches and bureaucrats millions on the backs of unpaid labor, nor could they refuse said unpaid labor’s movement to greener pastures. All of this was coming to a head with a massive antitrust lawsuit that promised to shake the NCAA member institutions to their core: House v. NCAA.

While my sport law colleagues can handle the weeds a bit better, I’ll summarize American antitrust law as simply as it was written: no one can behave in anticompetitive ways in any market, and no one can collude to restrict interstate trade. So, let’s say a collegiate sport governing association colluded to wipe out all competing sport governing associations for decades until they were the last option for member institutions and athletes. Then, they threatened financial penalties against any member institution who disobeyed their rulings and offered no real avenues for appeal. Lastly, once they had firm control over all stakeholders in the ecosystem, they enacted restrictive rules on the compensation of athletic laborers, all while selling the media product these laborers generate to the highest bidder. Should those actions be considered violations of antitrust law? Judge Claudia Wilken sure seemed to think so, and the early lawsuits played out accordingly under her watch.

After reviewing the legal tea leaves, it appears the NCAA and its member institutions realized how dead-to-rights they were with their flimsy argument of “but amateurism!” This led to a blockbuster settlement agreement: $2.78 billion to settle three major antitrust cases, primarily directed as retroactive damage payments for former college athletes who were denied opportunities to monetize their name, image, and likeness. The settlement also opened the door for schools to opt into revenue sharing directly with current and future athletes, which will likely be a focal point for athletic labor and its organizers moving forward.

Dust is still settling on the agreement and some details still are up in the air, but one thing is for certain: schools are going to have to pay back their ill-gotten gains, and most of them don’t have the liquidity to cover these bills. After all, someone needs to pay that Jimbo Fisher buyout. So as the powerhouses of the SEC and Big Ten began to look into new funding streams for this pending bill, they were greeted by one potential new partner with deep pockets: private equity investors.

In a nutshell, private equity investments aren’t too difficult to understand. Private equity investors take on a significant amount of leverage, or debt, to fund the acquisition of minority or majority stakes in cash flowing assets. Once their stake is acquired, they look to improve margins and sell their stakes, settling the residual debt and leaving a nice little profit for the original investors. On paper, there isn’t anything inherently wrong with this model. Private equity investors came to prominence in the 1980s as corporate raiders engaged in leveraged buyouts of firms they argued were bloated, inefficient, and prioritizing the c-suite and board members over the investors. The case is straightforward: your organization is being run poorly and is in need of a capital infusion, so take our money and our advice. After certain “efficiencies” are achieved, the private equity buyer will often look to unload their stake at a premium.

If you winced at “efficiencies,” congratulations for being well-versed in Orwellian corporate doublespeak. Time after time, a private equity investment leads to a gutting of product or service quality, as investors look to major cost cutting to improve short-term margins, with the understanding that they won’t be stewards of this organization for decades to come.

Mercifully, the power brokers at the Big Ten and SEC declined the initial offer from private equity, likely with the foresight that it would lead to the “efficiencies” of eliminating nonrevenue sports that over 80% of NCAA athletes participate in. There was also likely some understandable self-interest at play, as new investors may ask uncomfortable questions. Why does a public university athletic director need to make a million-dollar annual salary for what amounts to little more than an email job with a luxury suite attached? Do we really need 17 associate and assistant and deputy ADs? Next question please. The influx of private equity money would also widen the ever-widening chasm between the haves and have nots, as only the most successful athletic programs would attract private equity investors.

But regardless of their momentary courage, don’t think this is the end of the discussion. In any given year, only around 20 of the 134 athletic departments at the FBS-level are profitable. Even within the new Power Two of the Big Ten and SEC, most programs are barely breaking even due to their cost structures. And much like the private equity investors who aren’t in this for the long haul, most of the administrators in charge won’t be with their institutions when the consequences of their choices arrive — and they may be less likely to continue their long-term thinking if they struggle to pay their legal penalties. Kudos for making the right call today, but let’s check back in when salary cuts for coaches and bureaucrats start finding their way into proposals.

Brett Albert is a Senior Lecturer in the McCormack Department of Sport Management, where he focuses on sport finance and asset valuation within the sport industry. He also runs Rumspringa Books in downtown Springfield.