Why Colorado athletics rejected Big 12's $30 million credit

On Thursday, Colorado joined seven other Big 12 schools in declining the $30 million line of credit being offered to each school in the conference as part of a private capital deal.

If schools accept the deal, the $30 million would come with an interest rate of nearly 10%, a major undertaking for some universities. The deal stems from the conference's partnership with RedBird Capital and Weatherford Capital.

At the moment, no Big 12 school has accepted the offer, and it does not seem like any will in the near future, per USA TODAY Sports.

"CU Boulder is not opting in to the capital credit line included in the agreement, and we look forward to learning more about the opportunities contained in this new partnership that can benefit CU Boulder Athletics and our student-athletes," Colorado said in a statement.

Despite not opting for the deal, Colorado said in its statement that it believes in the private capital partnership and thinks it could benefit the school in the future.

"The University of Colorado Boulder supports the Big 12's agreement with RedBird Capital and Weatherford Capital, and we are confident that this agreement positions the conference and its member institutions for success in the current dynamic environment of college athletics."

Why Colorado is opting out

According to USA TODAY's Brent Schrotenboer, the Colorado athletic department is "reliant on institutional support and student fees to help pay the bills," which may make CU not the best target for this type of deal. Also, considering that Colorado athletics projects a $27 million deficit this fiscal year, the $30 million credit would seem very valuable.

However, due to the interest rate being 10%, Colorado and likely most other Big 12 schools see an avenue where "they can get a better deal elsewhere... or university leaders are in alignment to fund athletics as needed." Accepting high interest attached to the credit is the most significant dealbreaker.

Bottom Line

Privity equity is moving into college sports, whether you like it or not, but schools are hesitant to jump into deals right away. If Colorado can find a better deal privately without the Big 12's help, that could be a route they take. The deal with RedBird Capital and Weatherfors Capital is just one of the first of its kind, and many universities, including Colorado, are waiting to see how it plays out before jumping in.

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This article originally appeared on Buffaloes Wire: Colorado rejects Big 12's $30 million private capital offer