Michigan, USC Reportedly Question Big Ten's Private Capital Deal, Cite 'Soaring Costs'

The Big Ten's proposed $2 billion private equity agreement is reportedly facing skepticism from two key members of the conference.

According to ESPN's Dan Wetzel, Michigan and USC questioned the private capital deal during a joint meeting on Tuesday.

"The two schools discussed their shared skepticism during the call," Wetzel reported Tuesday. "One sticking point: The deal doesn't address the root issue -- soaring costs -- that have made the need for cash so imperative for athletic departments. Just providing short-term money, sources said, does not solve that issue."

Michigan and USC both believed that there are funding options for the Big Ten that can provide superior terms and would like to explore them, per Wetzel.

Yahoo Sports' Ross Dellenger reported Friday that part of the proposed private investment deal financed by UC Investments, an investment fund tied to the University of California pension system, would result in an average of $140 million going to each Big Ten school as an up-front payment.

Under the framework of the private equity agreement, a new subsidiary called Big Ten Enterprises would be formed and contain all conference media rights and sponsorship contracts through 2046.

Shares in Big Ten Enterprises would then fall to the conference's 18 schools.

ESPN's Pete Thamel and Wetzel previously reported that Michigan and Ohio State were "expressing skepticism initially" regarding the deal, but they were met with "significant lobbying" from other members of the conference.

Now, USC appears to have started raising questions as well.