For more than 30 years, college athletics has participated in a remarkable game of musical chairs. Almost everyone involved has a seat at the table and a share of the ever-increasing billions of dollars generated by college sports. But somewhere along the way, when the music stopped, there was no chair available for the universities.
Coaches, athletic directors, conference commissioners and their senior administrators have found their seats increasingly and unbelievably lucrative. After years of litigation, athletes finally and properly received their chair, with the right to share directly in the enormous revenues they help generate.
But what about the universities?
Universities supply the names, reputations, traditions, facilities and financial guarantees that make this multibillion-dollar entertainment business possible. They ultimately bear the financial responsibility when their athletic programs cannot support themselves. Yet they receive little, if any, meaningful financial return to support their principal mission: educating students.
It is difficult to imagine a more extraordinary failure of institutional governance.
College football and basketball have become enormously successful entertainment businesses. According to financial information reported to the U.S. Department of Education, colleges and universities reported approximately $28.3 billion in athletic revenues for the 2024–25 academic year, including institutional support and student fees. There is little reason to believe these revenues will not continue to grow.
Meanwhile, athletic departments continue to operate at substantial deficits, and university development officers scour the planet searching for additional contributions. No matter how much money is raised, it never seems to be enough. Every new source of revenue becomes the starting point for the next round of spending increases.
Consider a 2026 Government Accountability Office report finding that 94 percent of Division I athletic programs spent more money than they generated during the 2023–24 academic year. Remarkably, this included 49 of the 69 universities competing in the major athletic conferences. The GAO also reported that Division I athletic programs generated $13.1 billion in revenues while incurring $20.8 billion in expenses.
How can businesses generating billions of dollars annually be so consistently unable to support themselves?
The answer is not particularly complicated. University presidents and trustees have allowed athletic departments to operate under a financial philosophy fundamentally different from that governing virtually every other university activity.
When an academic department seeks additional money, it is generally expected to demonstrate how that spending will advance the university's educational mission. New money should provide additional scholarships, faculty positions, research opportunities or expanded educational programs.
In athletics, additional revenues too often produce additional expenses, with little expectation that the university's academic mission will receive a financial return.
Consider the expense side of college athletics. Numerous football coaches earn $10 million or more annually. When they fail, their contracts can provide extraordinary termination payments. Texas A and M agreed to approximately $77 million in termination compensation for Jimbo Fisher. LSU's termination of Brian Kelly involved a disputed buyout obligation of approximately $53 million.
Think about that. Universities that acknowledge that college is extraordinarily expensive are committing tens of millions of dollars to pay coaches not to coach.
Conference commissioners and senior NCAA executives receive compensation packages running into millions of dollars. Athletic directors frequently earn seven figures. Universities now field football teams whose athletes collectively may receive tens of millions of dollars annually in compensation, in addition to their scholarships and other benefits.
And somehow, amid this extraordinary spending, athletic departments complain that they cannot afford non-revenue sports, including sports that provide opportunities for Olympic athletes.
This is not simply an economic problem. It is a budgeting and governance problem.
There is another disturbing element to this financial structure. Universities solicit tax-deductible charitable contributions to support their athletic programs.
When these contributions support a financial structure that includes enormous coaching salaries, extravagant facilities and termination payments, federal and state taxpayers effectively subsidize a portion of that spending through the charitable deduction.
Is that really what Congress intended when it provided tax benefits for contributions to educational institutions? This, too, deserves congressional attention.
But the fundamental problem is larger than excessive compensation or the charitable deduction.
The universities themselves have failed to demand a return on the most valuable asset they contribute to college athletics: their institutional identities.
Without Michigan, Ohio State, Alabama, LSU, Notre Dame and the hundreds of other universities whose names and traditions attract millions of fans, the commercial value of college sports would be dramatically reduced.
No one would pay comparable sums to watch or broadcast the same athletes playing for anonymous franchises lacking a century of university identity and tradition.
The universities are not incidental participants in this enterprise. They are the reason much of its commercial value exists.
Athletic directors will argue that winning teams generate publicity, alumni engagement and increased applications. Undoubtedly, they do. But these indirect benefits do not justify operating a multibillion-dollar enterprise without requiring a measurable financial contribution to the university's educational mission.
It is time to change the rules.
At least 10 percent of gross revenues generated by college athletics should be dedicated exclusively to academic scholarships for students who are not receiving athletic scholarships.
The calculation should include commercial revenues from television contracts, ticket sales, sponsorships, licensing and other athletic activities, along with qualifying athletic contributions. Revenues should be counted only once, whether received by universities directly, distributed to them by athletic conferences, or retained by the conferences themselves. Transfers from university general funds and student fees should be excluded.
Consider the tens of thousands of $15,000 scholarships that could be funded annually by dedicating 10 percent of athletics-generated revenues to education.
Imagine the educational opportunities that could be created by redirecting even a modest portion of the enormous sums circulating through college sports. Lives would be changed.
Athletic directors will undoubtedly argue that their programs cannot afford to surrender 10 percent of their revenues. But that is precisely the problem. Every additional dollar seems already committed to higher compensation, more elaborate facilities or additional operating expenses. Universities have allowed spending to determine how much money is available for education. It should be the other way around. The obligation to support education should come first, with athletic expenditures determined by what remains.
The scholarship funds should be required to provide additional educational opportunities, not merely replace existing university scholarship expenditures.
Such a requirement would finally put a portion of the extraordinary financial success of college sports directly to work supporting the principal educational mission of the universities.
Of course, a requirement without enforcement would accomplish little. Congress should consider imposing meaningful financial penalties, including an excise tax or comparable sanction, on institutions that fail to meet the scholarship requirement. The rules would need to apply appropriately to both public and private universities.
University presidents and trustees have forgotten something fundamental. Universities enjoy tax-favored status and other public benefits to advance education and other recognized public purposes, not simply to make coaches, administrators and athletes wealthy.
College athletics should not be exempt from that responsibility simply because the entertainment business has become enormously successful.
The universities do not need to abandon major college athletics. They need to begin governing it.
A mandatory 10 percent allocation of athletics-generated revenues to academic scholarships would be an important first step. Those scholarships should supplement, not replace, existing university scholarship commitments. For decades, everybody involved in college sports has managed to find a chair.
Perhaps it is time for the universities to demand a chair of their own.
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