PROTECT Act
The PROTECT Act (Protect College Sports from Private Equity and Foreign Influence Act) would amend the Higher Education Act of 1965 to prohibit certain agreements between colleges and private capital firms, including sovereign wealth funds. Specifically, it bans ownership interests, revenue-sharing, or control rights in intercollegiate athletics being conveyed to private equity/hedge funds or foreign-state-controlled funds, as well as joint ventures involving athletics revenues, rights, or facilities. The bill allows narrow exceptions (e.g., discrete services, charitable gifts, certain government-bond financings, and sponsorships without revenue-sharing or control). Institutions would face annual certification and public disclosure requirements, and agreements would need to be brought into compliance within 24 months of enactment. The Secretary of Education would regulate these provisions, in coordination with the Treasury and SEC, aiming to align with securities laws.
Key Points
- 1Prohibition scope: Institutions may not enter into or maintain agreements with private capital firms or sovereign wealth funds that convey ownership, revenue interests, or control rights over intercollegiate athletics, including media rights, licensing, sponsorships, ticketing, data, and related facilities or real property.
- 2Exceptions: The ban does not apply to (a) fee-for-service arrangements for discrete services, (b) charitable contributions or gifts, (c) tax-exempt bond financings or lease-purchase deals with government units or certain conduit issuers that do not convey revenue interests or control rights, and (d) sponsorships or advertising deals that provide brand exposure without revenue-sharing or control.
- 3Coverage and affiliations: The rule extends to athletics conferences, media-rights consortia, and any collectives, foundations, or affiliates controlled by the institution or its athletics department.
- 4Compliance and transparency: Institutions must annually certify they have not entered prohibited agreements and publicly disclose any agreements that rely on the permitted exceptions.
- 5Definitions: The bill defines key terms (private capital firm, control rights, intercollegiate athletics program, sovereign wealth fund) to clarify what counts as a covered arrangement.
- 6Transition and rulemaking: Agreements in effect at enactment must be brought into compliance or terminated within 24 months; the Education Secretary must issue implementing regulations after consulting with the Treasury and SEC and align them with federal securities laws.