The pandoras box of college sports and private equity

Published: Tuesday, December 23, 2025 at 11:00 am

College Sports Face New Financial Realities with Private Equity

The landscape of college sports is undergoing a dramatic transformation, fueled by recent legal decisions and the influx of private equity. Landmark rulings, including the 2021 Supreme Court case *NCAA v. Alston* and subsequent developments regarding Name, Image, and Likeness (NIL) compensation, have opened the financial floodgates, allowing athletes to be paid. This shift has created a new reality where universities must compete financially to attract top talent and maintain winning programs.

The financial stakes are high. Major universities like the University of Texas and Ohio State University boast athletic programs valued at over $1 billion. However, even with substantial revenues, many athletic departments struggle to generate significant profits. For example, the University of Texas generates around $331 million in revenue but only a $6 million profit. Ohio State faces even greater challenges, operating at a loss despite revenues exceeding $250 million.

In response to these financial pressures, some universities are turning to private equity. The University of Utah has become the first major institution to partner with a private equity firm, creating a separate for-profit entity that receives revenues from the university's athletic programs. This move is seen as a way to secure the financial resources needed to compete at the highest levels.

The new financial landscape also presents challenges. Universities can now pay athletes up to $20.5 million annually across all sports, with star football players commanding the highest salaries. This influx of money raises concerns about the potential for universities to lose control of their athletic departments and the risk of incurring unsustainable debt. Furthermore, the increased financial incentives in college sports coincide with the growing prevalence of sports gambling, raising the specter of corruption and game manipulation.

BNN's Perspective:

The integration of private equity into college sports presents a complex dilemma. While it offers a potential solution to the financial pressures facing athletic departments, it also raises concerns about the core mission of universities and the potential for ethical compromises. Striking a balance between financial viability and the educational values of these institutions will be crucial in navigating this evolving landscape.

Keywords: college sports, private equity, NIL, NCAA, athletes, compensation, financial, revenue, profit, University of Texas, Ohio State, gambling, corruption, antitrust, Supreme Court, education, debt

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