University of Arizona Makes Ashford Contract Public

The University of Arizona has published the asset purchase and sale agreement it struck with Ashford University to create a new online nonprofit institution called the University of Arizona Global Campus.

The contract, shared with Inside Higher Ed yesterday, comprises 340 pages and provides new insight into the controversial deal, which has been praised by investors in Ashford’s parent company, Zovio, but heavily criticized by faculty members at the University of Arizona who fear the deal will weaken their institution’s reputation.

The contract sheds new light on what the relationship between the two universities will look like. For example, the University of Arizona is not permitted to take any actions that would encourage more than 5 percent of Global Campus students to transfer to Arizona per year. Additionally, the contract bars the two institutions from poaching employees from one another.

The 15-year contract will automatically renew for up to two additional five-year terms unless one of the parties elects not to renew the agreement. The contract may be terminated without any fee after seven years if the net tuition and fee revenue generated in the applicable fiscal year is less than $400 million.

The deal will guarantee Global Campus $225 million in revenue over 15 years, with 19.5 percent of tuition revenue flowing to Zovio, which will provide services such as marketing, instructional design and technology. Some details of the deal appear to have been redacted from the contract. 

Dozens of pages of the contract were blacked out, including details that might indicate the financial health of Ashford University, such as current contracts, net assets, intellectual property, the status of several legal proceedings against the institution and details of multiple redundant functions that Zovio intends to "eliminate" from Ashford before the deal is planned to close later this year.