The College Sports Business Has Graduated. The University Model Hasn’t. CAMERON MCGINN DEC 15, 2025
On a fall Saturday in Austin, it’s impossible to pretend college football is still a student activity.
You’re in a 100,000-seat stadium, watching a program that brings in hundreds of millions of dollars a year. Texas has steadily turned its athletic department into a financial juggernaut, more aptly described as a live entertainment and media business that happens to be attached to a university (it literally sells logo space on the field itself to help fund payments to athletes).
Zoom out and it’s the same story across the top of Division I. Football and men’s basketball have quietly become multi-billion-dollar properties. They behave like professional products in everything but name.
On paper, though, they’re still treated like a campus department. That’s the core tension in college sports today: the business has evolved into something that looks and behaves like the pros, but the structure around it is stuck in a bygone era. Universities are trying to run modern sports and media assets through the same pipes they use for academic departments and student life.
It worked when the numbers were smaller and everyone could pretend this was mostly about “school spirit,” but it doesn’t work anymore.
From Campus Pastime to National Industry
The original vision of college sports was simple: competition between schools built community, school pride, and alumni connection. Football Saturdays and basketball rivalries were important, but they were fundamentally campus events.
Over the last 40–50 years, however, a few big shifts turned that pastime into a full-blown industry:
National media deals. As cable expanded and then fragmented, college football Saturdays and March Madness became highvolume, must-have live content. Conferences started bundling games into media rights packages that climbed with every renewal cycle.
Postseason upgrades. The BCS and later the College Football Playoff turned bowl season into a cash machine. A single CFP berth is worth tens of millions of dollars to a conference and its members.
Conference realignment as media strategy. The USC and UCLA move to the Big Ten might be the most honest moment in this whole evolution. USC didn’t decide it needed more mid-winter trips to Rutgers and Penn State. It decided it needed to plug into the Big Ten’s media machine (a league with enormous rights deals, coastto-coast inventory, and a clear path to future commercial plays). Geography and tradition lost out to the pursuit enterprise value. The modern arms race. Coaching salaries, staff, facilities, recruiting operations, creative and social teams have all scaled up to pro-like levels. The top programs now run year-round content, recruiting, and operations machines.
NIL and revenue sharing. Once athletes could be compensated for their name, image, and likeness (and then, increasingly, through more direct mechanisms) the last thin veneer of “this is just amateur extracurricular activity” finally peeled off.
When stacked together, the on-field product is effectively professional, but the off-field entity is still a non-profit university department.
That mismatch is starting to crack the system.
The Weirdest Business Structure in Sports
If you drew the current model on a whiteboard, it would look something like this:
The athletic department is a non-profit cost center inside the university.
The university (through its board and president) owns and controls everything.
Every sport, from football and men’s basketball to rowing and golf, sits more or less in that same legal and financial bucket.
Profits from the marquee sports (e.g., men’s basketball and football) are immediately used to subsidize everything else.
There is no separate P&L for the more revenue-generating “businesses” of football and men’s basketball. There’s just “the athletic department.”
That creates some strange realities:
You’re running what is essentially a mini pro franchise through university procurement and HR processes. You’re trying to make aggressive commercial decisions inside a highly risk-averse governance structure that moves at committee speed.
The programs that generate most of the revenue are financially glued to those that lose money, which makes strategic planning muddy and often highly political.
Unlike for-profit media and entertainment assets, you have no way to raise equity or bring in genuine long-term investors. The only “growth capital” available is donations, debt, or the next TV deal (if you’re in the right conference, that is).
College athletics is trying to do for-profit business with non-profit-era tools.
Donors as Shadow Owners
Now layer in donors and boosters.
In pro sports, the people who put serious money into the team are typically the owners. They take risk, but they also get upside (distributions, asset appreciation, real governance) and often control.
In college sports:
Donors write eight-figure checks for facilities, NIL, and staff.
They have no equity, no residual claim on cash flows, and limited formal governance rights.
Their influence is mostly informal via access, relationships, and the threat of pulling support.
At a place like Texas, you see this clearly. Donors and corporate partners funnel significant money into NIL entities and department projects. They are functionally acting like equity investors in a highgrowth sports business (providing capital to attract and retain talent) but with none of the mechanics or protections that would exist in a real ownership structure.
They’re playing the role of owners in a business that pretends ownership doesn’t exist.
That’s part of why the ecosystem feels unstable and emotional. The people putting capital at risk don’t have a clean, long-term economic relationship with the thing they’re funding and they’re getting worn out. The incentives skew toward short-term wins, splashy moves, and peer signaling, not disciplined investment.
The Cost of Staying in the Old Model
College sports has all the costs and expectations of a real business, but not the structure to run like one.
You see the cost of that in a few places:
Under-monetization vs. pro franchises. Pro teams squeeze revenue from sponsorships, hospitality, ticketing, data, direct-toconsumer media, and non-game-day events. Many college programs leave real money on the table because they’re not staffed, incentivized, or authorized to operate like pro front offices.
Fragile support for non-revenue sports. Because everything is bundled together, a bad media-rights cycle or a new revenuesharing obligation can quickly put Olympic sports on the chopping block. Ironically, the very sports universities claim they’re protecting are more exposed because the economic engine is trapped inside an inefficient structure. Great product, limited business vehicle. UConn is the perfect example. On the court, the men’s and women’s basketball programs are elite global brands. They’ve won national titles, developed stars, and built a reputation any NBA team would envy. Off the court, the athletic department still relies heavily on university subsidy to balance the books. Heaven knows it’s not for lack of quality product, but because they don’t sit atop a power-league media platform and don’t have a modern commercial vehicle dedicated to monetizing what they’ve built.
Messy NIL and player economics. Without a clear commercial vehicle around the team, schools end up with patchwork collectives and workarounds. Everyone knows players are driving the product and should participate in the upside, but there’s no straightforward mechanism inside the current structure to treat them as partners in a legitimate business.
Regulatory and tax risk. As the commercial side grows, the idea that this is all just “educational activity” gets harder to defend. Keeping everything inside one non-profit envelope might actually increase long-term risk for the broader university around taxexempt status and regulatory scrutiny.
We’ve gone from being inefficient to outright brittle.
The Rest of the University Has Already Solved This
What’s striking is that universities and other mission-driven organizations solve this exact category of problem all the time, just NOT in athletics.
Take the University of Miami.
Over the past decade, Miami has turned its health system, UHealth, into a full-scale medical enterprise. It’s still a “university-based health system,” but it operates as its own business with dedicated leadership, a clear financial structure, and billions in annual revenue. Miami didn’t try to run a modern health system out of the biology department. It stood up a dedicated separate entity, integrated with the medical school and the broader university, but allowed to hire, invest, and partner like a real business.
You see similar patterns everywhere:
Academic medical centers carve out health systems with their own governance and economics.
Non-profits set up for-profit subsidiaries to handle licensing, retail, or real estate. (even Girl Scouts has done it)
Universities use technology transfer entities to commercialize IP with equity, royalties, and revenue-sharing built in.
The playbook is consistent:
1. Recognize that a certain activity is a real business with its own risk, capital needs, and growth profile.
2. Put it into a purpose-built vehicle that can operate like a business.
3. Maintain mission control and majority ownership so the parent organization stays in charge and shares in the upside.
There is nothing about football and men’s basketball that makes this structurally impossible. The only real obstacles are habit, politics, and fear of being the first mover.
What a Modern “Athletics Enterprise” Could Look Like
So now that we’re here, what could a grown-up version of this actually look like?
At a high level, it’s not complicated: Take the commercial core of college athletics (football and men’s basketball, maybe a small handful of other high-revenue sports depending on the school).
Move them into a dedicated entity that’s majority-owned by the university. That entity should have its own P&L, balance sheet, board, and management incentives.
Allow strategic investors (donors, alumni, and potentially institutional capital) to buy in. Give them real economics and clear governance instead of shadow influence.
Hard-wire commitments back to the campus and athletic department: guaranteed funding for Olympic sports, investments in academic support for athletes, and guardrails on travel, scheduling, and institutional values.
Build transparent mechanisms for athlete participation in the upside, whether through revenue sharing, structured NIL programs tied to the entity, or other instruments that acknowledge their role in the business.
You’re not selling off the program, you’re putting it in the right container (finally).
The university still owns the brand, the marks, the stadium, the story. It still controls the majority of the new entity. But the part of the operation that behaves like a business is allowed to actually be a business, and everyone else’s relationship to it becomes clearer:
Donors aren’t pseudo-owners; they’re actual partners.
Athletes aren’t pretending this is amateur; they’re participating in a defined economic model.
The athletic department isn’t forced to be a pro team, a fundraising shop, and a campus office all at once; it can focus on sport performance, student experience, and the broader portfolio.
Why This Shift Is Coming Anyway
Even if every president and AD in the country wanted to preserve the old model, the forces pushing toward a new one are hard to ignore:
Media rights are maturing. The days of huge step-ups every cycle are numbered. Growth won’t be enough to cover structural inefficiencies forever.
Labor costs are going up. Whether through NIL, revenue sharing, or formal employment, players are going to capture a larger share of the revenue they generate.
Consolidation will continue. Super-leagues, breakaway tiers, and tighter top conferences will raise the bar on what “competitive” looks like operationally and financially.
Commercial expectations are rising. Fans and brands want more access, more content, and more sophistication. That requires real investment in media, data, tech, and experiences.
You can already see second-tier and emerging programs talking like pro operators with nine-figure budgets, revenue-sharing plans, dedicated NIL executives, and aggressive corporate sales targets. Behavior is shifting, but the org charts just haven’t caught up.
The schools that treat football and men’s basketball as true enterprises with real strategy, real capital, and real alignment will be positioned to:
Invest when opportunities arise.
Ride out the next shock to the system.
Protect broad-based athletics by using a healthy commercial engine to fund the mission.
The others will keep trying to do NFL-level things inside a campus committee structure.
The Real Question for College Leaders
The question facing college sports isn’t, “Should we turn this into a business?”
That already happened.
The real question is are they willing to admit what this has become and design a structure that matches reality?
That doesn’t mean abandoning the educational mission or turning universities into hedge funds. It means being honest about what football and men’s basketball are, and then building a model that lets them thrive while strengthening the rest of the athletic department and the institution.
The alternative is exactly what we’re living through now with ad hoc workarounds, permanent crisis management, and a constant feeling that the system is one court case or media deal away from breaking.
College sports, in every practical sense, has grown up. The business is already here. The only thing left undecided is whether universities will take ownership of that fact and shape it on their terms or wait until the next shock forces change on someone else’s.