Universities pull the plug on purchase

The University of Phoenix and the University of Idaho have broken off talks on a multimillion-dollar purchase plan.

The parties have “jointly agreed to end discussions,” Phoenix said Tuesday morning. The news was not unexpected. But it abruptly ends a controversial two-year courtship between Idaho’s land-grant institution and a for-profit online giant with a national enrollment of more than 80,000. The proposed $685 million purchase left education and business leaders stunned, and left lawmakers feeling blindsided. And on Tuesday, U of I President C. Scott Green conceded the high-stakes process posed a potential distraction for the state’s oldest four-year school.

The State Board of Education will meet Thursday afternoon to consider a “termination agreement” that would officially break off the talks. The meeting figures to be a formality. The State Board had set a June 10 deadline for Phoenix and the U of I to come to an agreement — and it has long been apparent that the deadline will come and go without a deal.

“While we have decided not to move forward, we remain appreciative of (U of I) President Scott Green, the leadership of the University of Idaho, and the many elected officials in Idaho who supported this process,” University of Phoenix President Chris Lynne said in a news release Tuesday morning.

“Although we continue to see great value in University of Phoenix, it has become cost prohibitive, and potentially distracting to our other work, to continue conversations,” Green said in a news release Tuesday.

The State Board first gave the Phoenix purchase the green light in May 2023 — after a series of closed-door discussions. Those closed meetings remain at the center of a lawsuit filed by Attorney General Raúl Labrador; a court hearing is scheduled for June 23.

But after the State Board gave the deal its initial blessing, Labrador and many legislators questioned the clandestine process, and the merits of the multimillion deal. After a series of tense committee hearings and floor debates, lawmakers blocked the purchase in the spring of 2024.

The State Board then regrouped. In late June 2024, the board gave the U of I and Phoenix nearly a 12-month extension, allowing the parties more time to try to rework a deal and win over skeptical lawmakers.

But in April, the 2025 legislative session adjourned, with no discussion of a U of I-Phoenix partnership. That lack of legislative activity — coupled by reports that Phoenix might instead go on sale through an initial public offering — suggested that the U of I’s purchase plan was already on shaky ground.

From the beginning, U of I officials said the Phoenix acquisition would revolutionize education for adult learners in rural Idaho, and provide revenue from a profitable online university.

Instead, the U of I now says it will be kept whole.

The U of I will collect an additional $12.2 million from Phoenix — in the second of a series of “breakup fees” worked into the State Board’s extension.

The U of I received $5 million last June, to cover some of the costs on researching a potential Phoenix purchase. The second payment will bring those fees to $17.2 million — exactly enough to cover the U of I’s Phoenix-related due diligence costs, U of I spokeswoman Jodi Walker said Tuesday.

In January, Green told legislators that the Phoenix breakup fees would more than cover the university’s due diligence costs — which exceed at least $14.2 million, based on previous EdNews reporting

The U of I “learned a lot” from its two-year courtship with Phoenix, especially about delivering education to adult students who aren’t part of the U of I’s typical demographic, Walker said. She said the U of I will now be able to “refocus” on its on-campus priorities, such as Moscow-based enrollment and building its research portfolio — and the U of I has no immediate plans to seek a partnership with another university.

“I’m not aware of any other conversations,” she said, “certainly not in the short term.”

Phoenix’s next moves are unclear.

The State Board’s June 2024 extension gave Phoenix the option of talking to other would-be buyers, or pursuing an IPO. Over the past 11 months, Phoenix says it “has actively explored other strategic options that align with its mission and strengths in serving working adult learners.” But on Tuesday, Phoenix said it “will continue to operate as an independent, private institution.”

This story originally posted on IdahoEdNews.org on June 3, 2025