College athletics is entering its “org chart innovation” era.
Kentucky, Michigan State, Virginia Tech, and others are experimenting with new structures that move commercial assets into separate LLCs or affiliated entities. The basic idea is pretty straightforward: let the traditional athletic department continue managing sports, coaches, athletes, compliance, academics, and campus politics, while a more commercially oriented entity focuses on revenue generation, partnerships, media, sponsorships, NIL, ticketing, premium experiences, and capital allocation.
In theory, this makes a lot of sense.
Athletic departments were not built for the world they now operate in. The modern college sports enterprise looks more and more like a hybrid of a pro sports franchise, media company, talent marketplace, real estate platform, and donor-backed nonprofit. But most athletic departments are still managed inside university systems that move slowly, operate politically, and were designed for a very different era.
So, yes, creating a new commercial vehicle can be useful. It can allow schools to hire different talent, move faster, create cleaner accountability, partner more flexibly, and think about revenue in a more sophisticated way.
But the LLC itself is not the point. The entity is effectively just plumbing. The real edge ought to come from what sits behind it: things like governance, talent, data, decision-making, and the willingness to make tricky capital allocation choices.
That last piece is the one I think matters most.
For decades, a lot of athletic departments have operated with a relatively blunt financial model. Football funds everything. Men’s basketball matters a lot. Donors fill gaps. Olympic sports are protected by mission, tradition, alumni pressure, and Title IX considerations. Facilities campaigns happen when there is enough donor energy. Budgets are often incremental. Success is often measured sport by sport, year by year.
But it’s clear that model is not going to be good enough anymore.
In a revenue-sharing world, every dollar has more strategic weight. Schools will need to decide how much capital goes toward athlete compensation, coaches, facilities, recruiting infrastructure, nutrition, analytics, sports science, fan experience, brand-building, commercial growth, and so on and so forth. They will need to understand which investments drive wins, which investments drive revenue, and which investments support the broader institutional mission.
Those are not easy tradeoffs.
If a school creates an LLC but still allocates capital based on politics, precedent, donor preference, or whoever yells loudest, then nothing fundamental has changed, it just has a more modern wrapper.
So the better question is not: “Should we create an LLC?” The better questions are:
Who owns the commercial P&L?
Who decides how incremental revenue gets reinvested? How do we evaluate ROI across sports?
How do we balance football competitiveness with broad-based athletic department success?
How do we align donor capital, institutional funds, sponsorship revenue, media revenue, and athlete compensation?
How do we make decisions with enough speed to compete, but enough discipline to avoid lighting money on fire?
This is where I think a lot of schools will struggle and the real separation will occur.
The easiest version of modernization is structural. You create the entity, hire a CEO, announce a new commercial strategy, go on a podcast and talk about how you’re innovating.
The harder version is going to be operational. Like build a capital allocation framework, defining success metrics, and integrating commercial strategy with roster strategy. How do you understand the true cost and upside of each sport, or professionalize your data infrastructure, or decide what the school will be great at, and what it will stop pretending to prioritize equally?
That is uncomfortable work that forces clarity, and from what I’ve seen clarity is no fun task in college athletics.
Every stakeholder has a claim. Coaches want resources. Athletes want compensation. Donors want influence. Fans want wins. University leaders want reputational upside without embarrassment. Olympic sports want protection. Commercial partners want inventory. Conferences want alignment. Compliance wants guardrails.
Those tensions are to some extent inevitable, but a good framework makes them more manageable (and defensible). That is why I suspect we will see a lot more schools experiment with LLCs and affiliated commercial entities over the next few years. Some will work, but I also expect that many will underdeliver. The differentiator will come down to whether the school uses the structure to actually change how decisions get made.
The schools that win this next era will not simply be the ones that “act more like businesses.” That phrase gets thrown around too loosely without much substance, and for good reason. Universities are not businesses, and athletic departments are not pro teams. They have different missions, constraints, and obligations.
But I do believe that the best ones will borrow the right disciplines from business, like clearer ownership, faster decision-making, sharper resource allocation, better data, stronger talent, and a more honest view of tradeoffs.
The schools that get this right will use new structures to support broadbased success, not just chase short-term football spend. They will understand that commercial growth and competitive success are now deeply linked and that not every dollar should be treated equally.
Some drive wins, others drive revenue. Some dollars protect the mission, while others are just legacy spend. The trick will be knowing the difference, and for many schools that will require developing new operational muscles.
So I am generally pro-LLC. I think these structures are a very rational response to a rapidly changing market. But I would be careful not to confuse the structure with the operational know-how.
Sure, the school can now move faster, but can it move smarter?
That will more likely come from better frameworks, better operators, and better decisions.