The NCAA Division I Cabinet approved ad space on collegiate teams’ uniforms this past January with an effective date of August 1, 2026¹. There are rules though. After all we need to remember it is college sports, so rules are important, right?

Universities and conferences can now sell ad space or commercial patches on student-athlete uniforms for non-NCAA games, meaning they cannot be worn during March Madness or NCAA national championship events but are allowed for the College Football Playoffs^1,2. It is reported that for some of the big-name national programs, these sponsorships will pay more than most professional sport patch deals².

Division I teams can now put no more than two commercial patches on uniforms and apparel during preseason and regular season games and one additional commercial patch on those items during conference championship games. The patches can be no more than 4 square inches in size². These patches are in addition to the commercial space on team apparel used by uniform sponsors (e.g., Nike and Under Armor) and a fourth commercial patch will be allowed on athletic equipment (e.g., bags)².

I found it interesting to see the range of deals firms are offering for these commercial patch sponsorships, as well as which universities have decided – for now – that their uniforms will NOT be used for ad space.

The monies from these commercial patch sponsorships go to the universities’ athletic departments but can include separate NIL opportunities, appearances or marketing campaigns for student-athletes³. Learfield, is taking the lead on this with universities and, as of mid-August, twenty-five college sports patch agreements were reported by Sports Business Journal (SBJ), with Learfield involved with thirteen of those⁵. SBJ also reported that UTEP, Liberty, Northern Illinois, and Florida International had signed deals brokered by Van Wagner³.

Reports are that the #1 commercial patch deal is Notre Dame signing with fintech firm SoFi. It is estimated to be worth $18-20 million annually⁴. Recall in our August 12 newsletter about “The Demise of the ‘Typical’ Athletic Director”, we reported that Notre Dame AD Pete Bevacqua was the former CEO of NBC Sports. Seems like he knows how to get top dollar for sponsorship deals.

It should be noted that Sportico reported they could not get the agreement involving Notre Dame and SoFi disclosed to them as Learfield was a party to the SoFi deal not Notre Dame directly². That could be interesting from a governance perspective so more on that for trustees to consider later in this newsletter.

Ohio State also announced a commercial patch deal with JPMorgan Chase that will pay OSU an estimated $15-17 million annually. Ohio State Athletics brought in a record-setting $336 million in revenue during 2025 FY, so this is just more to add to their already burgeoning bankroll⁴.

Michigan State’s uniforms will have the logo of the locally based Michigan State Credit Union (estimated at $4 million annually) and, similarly, Illinois signed a patch deal with local Busey Bank starting this season thought to be worth $6 million per year ⁴.

Some more deals include:

· Vanderbilt and SRM Concrete, the nation’s largest ready-mix concrete manufacturer, agreed to a patch deal for all of Vanderbilt’s 17 varsity teams starting this fall season. SRM CEO Jeff Hollingshead is a Vanderbilt alumnus³.

· Alabama A&M is the first HBCU to secure a patch deal for their uniforms. Omni2Max, a technical and business services firm in sectors such as cybersecurity, engineering and logistics, will sponsor their corporate logos on Bulldogs uniforms for the 2026 season³.

· Kansas State announced a football-only deal, brokered by Learfield, with Purple Wave Auction. The Manhattan Kansas firm is an online equipment auction house³.

· Florida State signed a single sport patch agreement for men’s basketball with ReliaQuest, a cybersecurity firm that is also a partner with the ACC. This deal was brokered by Legends Global Venture³.

Conferences are also jumping in to further monetize their membership’s athletic teams. The Big 12 signed an agreement with Monster Energy that is reported to be worth $20 million per year with the conference universities said to each be getting $1 million annually ⁴.

Oklahoma and Texas have said they are not interested in adding a patch ^5,6. And while Alabama has not announced a deal, they have joined Texas – I thought they weren’t interested? - in moving the SEC logo to the middle of their jersey leaving room for a possible corporate patch on the right shoulder ^7,8.

There are several interesting deals with businesses, some with already existing sponsorships, that could be inked over the next several weeks. Doesn’t take too much thought to imagine Coca-Cola and Georgia, Florida and Gatorade, Michigan and Ford, Penn State and Hershey?

We have over 365 college sports teams classified as Division I and only a handful have already announced corporate patch sponsorships. But with all but maybe 15-20 college athletic departments operating in the red, the push for the rest of these universities to generate more income from deals like corporate patch sponsorships will only get bigger and bigger.

Here are the three questions that trustees should be asking:

1. Are there any issues of exclusivity related to current sponsorships? For example, if you have a contract with Coca-Cola for university beverage service or Barnes and Noble for bookstore management, does that limit the universities’ ability to partner with one of their competitors in an athletics deal? Like Gatorade or Amazon?

2. Furthermore, trustees should get independent legal counsel if the opinion is offered that commercial patch sponsorships agreed to by affiliated LLCs or a third-party firm like Learfield are exempt from exclusivity or other contractual commitments in current sponsorship agreements. Many universities are setting up LLCs outside of the Athletic Department to manage revenue generation operations such as ticket sales and media deals and have used firms like Learfield to generate sponsorship revenue in the past. As fiduciaries of the university, not just Athletics, the trustees should conduct proper due diligence with millions of dollars at stake in these commercial patch sponsorships.

3. Finally, as we discussed regarding Notre Dame’s deal with SoFi, if any sponsorship is with Learfield or another third-party, the trustees should be fully informed about the terms of the agreement from a financial and a legal perspective. Such decisions should not be closely held by Athletics to the exclusion of the university’s fiduciaries – the Trustees.

End Notes

¹ “DI Cabinet Approves Commercial Patches for Uniforms, Equipment, and Apparel”, Governance Update, www.ncaa.org., January 23, 2026.

² “Banks Are Rushing to Grab College Sports’ Newest Ad Space”, Sportico, July 30, 2026.

³ “Jersey Patch NIL Deals are Here: What the Sponsor Logo Era Means for Fans and Athletes, www.rallyfuel.com, August 27, 2026.

⁴ “Why are College Football Programs Suddenly Putting Corporate Patches on their Uniforms?”, New York Times-The Athletic, July 28, 2026.

⁵ “Oklahoma AD Roger Denny Not in a Hurry to Add Advertising Patches to OU Uniforms”, www.SI.com, August 21, 2026.

⁶ “Del Conte: Texas Will Not Add Uniform Patches”, www.SportsBusinessJournal.com, August 5, 2026.

⁷ “Texas Longhorns to Alter Football Uniform for 2026 Season, www.yahoosports.com, June 16, 2026.

⁸ College Football Jersey Patch Sponsors, Guessing Power Conference Teams’ Partnerships, www.on3.com, July 7, 2026.

The Protect College Sports Act (PCSA), a bill we’ve been watching closely in this newsletter, was supposed to be the big win for the coalition of commissioners, presidents, athletic directors, and coaches who have spent seven years lobbying Washington for a federal fix to NIL, eligibility, and antitrust problems in college sports. But it’s not a done deal yet. Trustees should start the new academic year with three things in mind: the bill is still alive, it’s no longer on the timeline boards were told about this spring, and when the fight to pass it picks up again after Labor Day, the messaging around the bill will matter just as much as the bill itself.

Where the Bill Stands

S.4668, the Protect College Sports Act of 2026, made it through the Senate Commerce Committee with a bipartisan 19-9 vote on June 18¹. That was a strong result for a bill and got a lot of people hopeful that the full Senate would vote before the August break. That didn’t happen. The Senate went on recess without a floor vote, which one major media outlet called a serious setback, especially after conference commissioners spent so much effort pushing for this kind of federal action². According to the Knight Commission’s tracking, debate on the motion to proceed is now set to start no earlier than September 15 and no later than September 23³. So there’s a five-to-six-week window where both supporters and opponents of the bill will be working the floor.

The White House Weighs in on the Bill’s Stance on Transgender Athletes

In early August, the administration officially backed the bill, and the White House Counsel’s office issued a memo about one of the most politically charged parts of the debate: whether the PCSA would override state laws that limit transgender participation in women’s sports. The Counsel’s office said the bill does not override those state laws. This seems aimed at calming organized opposition based on that specific claim. For governance purposes, the bill itself hasn’t changed since it passed the Senate Commerce Committee in June. The PCSA still includes an antitrust exemption so schools and conferences can pool and sell media rights, sets a national standard for NIL deals, puts in a $600 reporting threshold for NIL compensation, caps agent fees at 5 percent, allows one penalty-free transfer per athlete with a five-year eligibility window, writes the House vs. NCAA settlement of $20.5 million in player compensation into federal law, gives another $20. million for schools to use as retention compensation for players, limits coaches from switching jobs mid-season, and blocks the creation of a super league by conference mergers or buying other university assets outside specific rules. (For all the details, check our CEOHigherEd Substack newsletter from 8/5/26.) What has changed, though, is that the debate over passing the bill is now more about cultural issues than governance ones. That shift should concern any president, athletic director, or board of trustees who was counting on the PCSA to stabilize revenue-sharing and player eligibility this fiscal year.

Why The Trustees Should Care About All This

Any school that built its FY27 budget around having a settled revenue-sharing and NIL framework now needs to quickly come up with a September backup plan. If the bill dies or stalls again, the governance gap it was meant to fix will keep going. We’ve had spending caps, transfer rules, and eligibility limits all being fought over state by state instead of being set nationally. If the PCSA doesn’t pass, this patchwork of state court decisions will continue into another football season. This is the governance arbitrage risk we’ve been tracking and reporting on for months. Without a federal fix through the PCSA, big decisions about athlete pay, transfers, and eligibility will keep ending up in state courtrooms, where the outcomes are hard to predict and could vary by state.

The Strangest Case Yet for the Lunacy of College Athletics Today

If you needed one example of how far college athletics has drifted, we saw it this week when an active NFL player went back to college football. The Cleveland Browns waived rookie tight end Dae’Quan Wright on August 23, and, if he clears waivers, Wright has a deal to play for LSU this fall⁴. He’s believed to be the first player ever to move from an active NFL roster back to a college team. Wright went undrafted from Ole Miss, signed with Philadelphia, was claimed by Cleveland, and became the first active NFL player to enter the NCAA transfer portal earlier that same week. The way this happened is through a temporary restraining order from a Louisiana judge giving a small group of players (including Wright) another year of NCAA eligibility. This is part of the wider wave of eligibility lawsuits we’ve covered since the Wagner injunction⁵. Wright is one of at least sixteen players who asked for relief under that order, and several were already in NFL training camps when the ruling came down. But more could follow as NFL rosters are cut to 53 players by August 30.

The Significant Governance Question That This Highlights

No conference commissioner, university president, conference board, or NCAA committee ever set up a system where a college program can recruit a player who’s under contract with an NFL team. This happened because player eligibility is now being decided in district state courts. This, which really feels like a free-for-all, is what’s driving the urgency behind the PCSA legislation. Trustees should expect their Coaches and ADs to get calls this week, if they have not already, from agents suggesting their own rostered players could make a similar claim. This isn’t just a hypothetical anymore. It’s unfortunately the “new normal” for college sports.

Endnotes

1. Updates for Summary for Protect College Sports Act of 2026, Knight Commission on Intercollegiate Athletics, August 2026.

2. “Protect College Sports Act fails to reach Senate floor for vote, as lawmakers recess until September,” CBS Sports, August 8, 2026.

3. Updates for Summary for Protect College Sports Act of 2026, Knight Commission on Intercollegiate Athletics, August 2026.

4. “Agents: Dae’Quan Wright to be waived by Browns, set to join LSU,” ESPN, August 23, 2026; “Dae’Quan Wright enters transfer portal,” CBS Sports, August 2026.

5. “Dae’Quan Wright enters transfer portal: Browns TE, ex-Ole Miss star eyeing college football return,” CBS Sports, August 2026.

This past week, the Association of Governing Boards of Universities and Colleges (AGB) issued an executive briefing that told trustees something that, at this point, should not at all be surprising. The briefing stated that collegiate athletics is now a rapidly changing commercial enterprise, and trustees need to understand and recognize where athletics oversight fits within their own committee structure¹.

AGB is the leading national organization, based in Washington, D.C., that focuses on strengthening and supporting higher education governance. It serves university presidents, board chairs, trustees, and board members. The organization represents more than 2,000 institutions and foundations and has over 40,000 individual members. Its mission is to prepare college and university governing boards to successfully fulfill their fiduciary duties and strategic responsibilities².

But, AGB did not issue a new policy. Instead, it pointed out a governance gap that has been increasing for almost two years. This gap is one I have been following and writing about in this Substack newsletter for several months. All this comes at a critical time for collegiate athletics as three unique agents — the courts, Congress, and the White House—are each focused on universities and their athletic departments.

They are all asking much the same basic question: who, within the institution, “owns” collegiate athletics? In prior newsletters, I have referred to this situation as “governance arbitrage”. It concerns the movement of important institutional decisions from the board’s formal oversight, into areas where trustees have decreased visibility and less control. Athletics has been at the forefront of this shift for some time. This pattern has been discussed in nearly every edition of this newsletter since April, whether the topic was the shift in the business model, the wave of LLC restructurings, or the accounting treatment of coaching buyouts³.

AGB’s briefing is the clearest indication, at least to my thinking, that the sector’s own governance association views it the same way. Today, trustees are being asked to oversee, often without a well-defined committee oversight structure and charter: 1) a federal judge’s recent preliminary injunction in Wisne v. NCAA, which has already disrupted roster and eligibility planning for the 2026-27 season⁴; 2) The Protect College Sports Act (PCSA), which, as of this week, remains stalled in the Senate and will not be taken up again until after the August recess, leaving the effects on rosters, revenue-sharing, and retention pools unresolved⁵; and 3) Executive Order 14400, effective August 1, which instructs federal agencies to review institutional compliance with athletics guidelines as set by the order⁶.

The PCSA Stall Is Its Own Governance Story

I wrote an in-depth piece on the PCSA’s stalled progress in June, when the SEC and Big Ten released a joint statement opposing the bill’s media-rights pooling and anti-consolidation provisions. The SEC and Big Ten now support the PCSA but the bill has not advanced and is on hold until after the August recess.⁷ What matters for trustees now is not just these legislative details, but that conference commissioners were negotiating a governance restructuring of collegiate sports at the federal level, and in most cases, their own member-institution boards were learning about their conference’s stance from the media rather than from conference leadership. That is another case of governance arbitrage, where a decision with direct institutional impact is made with limited or no university trustee involvement.

AGB also is also very pointed in its opinion that the old athletics business model is gone, even for institutions outside the power conferences. They caution that trustees at mid-major and non-power institutions, mistakenly, dismiss such issues as not really their concern. AGB then goes further to remind universities and their governing boards that issues such as revenue-sharing and Title IX risk are not limited by conference tier. The executive order instructing agency heads to assess the “present responsibility” of grant and contract recipients based on athletics governance compliance doesn’t either. Each board that has a DI or DII program will be impacted by all this, whether it has ever come up at a board meeting or not.

LLC Spinoffs Are the Structural Version of the Same Drift

The task AGB has given trustees is fairly simple: determine which committee currently has athletics oversight—finance, risk, a dedicated athletics committee, or, perhaps, no single committee. The next step for boards is to decide, given what the athletics portfolio now includes, if the current committee structure is still optimal.

Boards that wait for the next crisis to address this might find, as some already have, that the decision is being made for them by a court, a conference, an athletic director, the board of an LLC spinoff, or a federal agency. The LLC issue is not theoretical, and it is the part of the governance story I have focused on throughout this year. Georgia Tech’s Champions Blue, Clemson Ventures, Michigan State’s Spartan Ventures, and Texas Tech Athletic Partners are all structured, in different ways, to move commercial athletics activity into an entity outside the university’s own governance and audit reach⁸.

I have argued that this is the clearest example of governance arbitrage in a structural sense: the university keeps the brand, the fans, and often the reputational risk; while a separate legal entity, with its own board and often its own NDA-protected agreements, makes the commercial decisions. Michigan State’s experience with Spartan Media Ventures is the cautionary example every trustee reading the AGB briefing should be considering⁹.

What should trustees do this fall, given that the courts, Congress, the White House, and now AGB all converging around collegiate athletics and governance?

First, determine which committee is responsible for athletics oversight, and make sure its charter explicitly states that.

Second, ask whether your athletics enterprise includes any LLC, foundation, or venture structure operating outside the university’s own audit and governance perimeter, and if so, whether the full board—not just the athletics committee or the president’s office—receives regular, substantive briefings on what that entity is doing and who it answers to.

Finally, consider how compliance with Executive Order 14400 could potentially impact your university’s existing federal grants and contracts. Institutions that have never mapped athletics governance compliance onto their federal funding relationships may be more exposed than their Office of Research realizes.

Readers new to this newsletter can find more detailed discussions of the PCSA, the LLC spinoff pattern, and Executive Order 14400 in the archive. Together, they are the resources behind what AGB is now urging trustees to investigate for themselves.

Kim Schatzel, Ph.D., is the founder of CEOHigherEd and served as president of Towson University and the University of Louisville. She served on two NCAA Division I Athletic Conference boards, including the ACC. CEOHigherEd publishes practitioner-grounded analysis of higher education governance and leadership for university presidents, provosts, trustees, legislative leaders, and policymakers.

Endnotes
1 Association of Governing Boards, “Executive Briefing: Intercollegiate Athletics and Board Oversight,” August 13, 2026.
2 Association of Governing Boards, “About AGB,” agb.org, accessed August 2026.
3 CEOHigherEd, “The Business Model of Collegiate Athletics,” April 22, 2026.
4 Hoops HQ, “Recapping a Chaotic Week in the College Sports World,” August 5, 2026, describing the NCAA’s response to the preliminary injunction in Wisne v. NCAA.
5 Sportico, “Protect College Sports Act Punted as College Sports Chaos Ensues,” August 2026.
6 Executive Order 14400, “Urgent National Action to Save College Sports,” The White House, April 3, 2026 (effective date for Sections 3-6: August 1, 2026).
7 CEOHigherEd, “Congress Is Trying to Fix College Sports. The Power 2 Don’t Like It.,” June 17, 2026.
8 CEOHigherEd, “Collegiate Athletics: New Business Model, New Governance Models, & New Legal Entities - OH MY!,” April 29, 2026.
9 CEOHigherEd, prior coverage of the Michigan State Spartan Media Ventures NDA governance matter.

For many years, the path to becoming an athletic director (AD) at a university was through compliance, fundraising, and sports administration. Those who wanted to become an AD attended seminars on Title IX, became familiar with the NCAA manual, and demonstrated they could keep a department from receiving an infractions letter. Another path was to build strong relationships with donors who could help fund new facilities for coaches and their student-athletes. These aspiring ADs—often senior associate ADs—were usually assigned a sport to “oversee”. You knew you were on the right track, if your boss, the AD, gave you football or men’s basketball to manage.

That was the typical route for a long time. Athletics staff would build experience, develop expertise, and assemble a record of achievements in compliance, fundraising, and sports administration to prepare for a future AD role. However, that is no longer the case, and many university trustees and presidents are just now realizing how the AD role has significantly changed in just a few years.

To see this shift as it happens, consider who is being hired as ADs to lead collegiate athletics programs today. At the University of North Carolina-Chapel Hill, AD Bubba Cunningham was succeeded by Steve Newmark, the former president of RFK Racing, an auto racing executive with no NCAA compliance experience.¹ With a career built on the business side of stock car racing, Newmark lead his race team’s marketing strategies, sponsorships, team operations, and contract negotiations.²

John Donahoe joined Stanford University as their AD in September 2025.³ A graduate of Stanford’s Graduate Business School, he most recently served as the CEO of Nike, with previous CEO roles at eBay, PayPal, and Bain and Company.³John Levin, Stanford’s President, stated when the hire was announced that the university was looking for an experienced and innovative AD to guide Stanford Athletics’ future during a time of shifting media opportunities, revenue sharing, NIL deals, and conference realignment.³

Notre Dame also looked to the corporate world and not traditional ADs, when it hired Pete Bevacqua to succeed Jack Swarbrick in 2024. Bevacqua was previously chairperson of NBC Sports.⁴ A similar hire was made by Maryland in 2025 with James Smith. Smith came from the Atlanta Braves where he had served as senior VP of business strategy. Smith’s career has been entirely in professional sports, including tenure with the Atlanta Falcons/AMB Sports & Entertainment, where he oversaw revenue and marketing, including the $1.6 billion Mercedes-Benz Stadium project.⁵

In my mind, this is not just a few unusual AD hires. Instead, it represents a contemporary and very different athletics structure with a major focus on business and marketing strategy. This change happened to also coincide with the introduction of the General Manager (GM) position to collegiate athletics. Something that was unheard of just a few years ago.

In late 2024, Stanford hired Andrew Luck, a former Stanford quarterback, as the GM to run football operations.⁶ Luck reports to AD Donahoe and the Head Football Coach, Tavita Pritchard, a former QB coach of the Washington Commanders, reports directly to Luck.⁶

In 2022, Duke University, a perennial Men’s Basketball powerhouse. hired Rachel Baker, a former Nike and NBA executive, to be its first Men’s Basketball GM.⁷ Baker’s expertise is primarily focused on sports marketing and branding strategy. ⁷

In January 2025, New York Times reported that 8 of the 12 teams in the 2025 College Football Playoff series had GM positions whose responsibilities included roster management, coaching contracts, and revenue sharing deals. These functions, of course, greatly impact the financial and playing success of those programs.⁸ The article’s headline called the GM role – “the hottest job in college sports”.⁸

I believe the rapid adoption of the GM model by many universities is in response to the substantial changes to collegiate athletics stemming from the 2025 House v. NCAA settlement. Traditional athletics departments had little experience negotiating a quarterback’s revenue-share deal or working through NIL offers. Universities and their athletic departments looked to hire people, often from professional sports or agencies, who had experience in those areas.

However, these major changes to positions, people, and organizational structures provide there also exists a governance risk for boards to think about. A recent analysis cautioned that college athletics could lean towards a “two CEO” structure, with a commercially focused GM and a compliance-focused AD working in parallel with, perhaps, no single point of accountability. The analysis argued that the AD must remain accountable for the entire athletic enterprise and suggested that GMs should report to that position.⁹

What should trustees do? First, if your athletics department is creating a GM role, it should be subject to the same board-level review as the AD and head coach contracts. Second, boards need to determine who is responsible for Title IX and NCAA infractions risk when the GM, not the AD, is negotiating financial matters. If the answer to those questions is unclear, a governance gap exists that should be addressed. Finally, when the board thinks about the skills and experience of its current or next AD, I recommend they consider much more than a fundraising-compliance-and-facilities generalist.

ADs who will succeed during this major period of change in collegiate athletics will be the ones who can support and supervise a GM responsible for developing and executing business, personnel, and marketing strategies in a highly competitive collegiate sports environment. For trustees, you should be asking if your next AD will need different expertise and experience compared to five years ago. The AD job universities have known for decades is not coming back. The question for every board this year is do we have the right AD, team and organizational structure to successfully lead our athletics department, commercially and competitvely, in today’s environment.

Endnotes

1 CBS Sports, “UNC AD Bubba Cunningham to step down in 2026, move to advisory role; successor hired,” July 1, 2025.

2 Charlotte Observer, “Who is Steve Newmark? Meet UNC’s Athletic Director in Waiting,” July 1, 2025.

3 Stanford Cardinal, “John Donahoe named Jaquish & Kenninger Director of Athletics,” July 31, 2025.

4 ESPN, “Pete Bevacqua to succeed Jack Swarbrick as Notre Dame AD,” June 8, 2023.

5 ESPN, “Maryland hires Braves Executive Jim Smith as AD”, May 15, 2025.

6 ESPN, Stanford brings ex-star QB Andrew Luck ‘home’ as as new GM”, November 30, 2024.

7 Sports Illustrated, “Duke Hires Former Nike Executive Rachel Baker as General Manager”, June 7, 2022.

8 New York Times, “Why General Manager is the Hottest Job in College Sports”, January 9, 2025.

9 JMCO, “College Athletics Can’t Afford a ‘Two CEOs’ Model,” May 15, 2026.

Three developments over the past week have come together to dramatically change the governance landscape for college athletics. A presidential executive order (EO) took effect this month, a federal bill (PCSA) has cleared its biggest political hurdle, and, as I expected, the two most powerful collegiate athletic conferences in the sport have now given their support. This newsletter will briefly review the EO, the initial PCSA, and the changes to the bill that brought the SEC and Big Ten endorsements.

PRESIDENT TRUMPS EXECUTIVE ORDER

As discussed in my July 22, 2026, CEOHigherEd Substack newsletter, President Trump’s April 3 executive order (EO), “Urgent National Action to Save College Sports,” took effect August 1, 2026 ¹.

(Please note that much of the narrative that follows was taken directly from the July 22 Substack newsletter.)

The EO only applies to federally funded institutions with at least $20 million in annual athletics revenue, which means the Power Four programs and the highest tier of the Group of Six² . It directs the NCAA and similar governing bodies (like athletic conferences) to have in place:

· A five-year eligibility cap (excluding active-duty military leave, official religious missionary service, and maternity leave) and a ban on professional athletes returning as players to collegiate athletics.

· Restrictions on transfers to allow one transfer with immediate eligibility to play, and a second transfer only for athletes who have completed an undergraduate degree.

· Provisions for medical care for athletics-related injuries.

· Requires revenue-sharing to protect and expand women’s and Olympic sports.

· Bars federal funding from being used to fund NIL, revenue-sharing, or coaches’ compensations.

· Restrictions to eliminate “improper financial activity” or “fraudulent NIL” to address “pay-for-play” as NIL that include: 1) the paying firm must be a genuine third-party not affiliated with the university’s athletic department; 2) the student-athlete must be doing real work related to promoting or endorsing the firm’s product; 3) the compensation must be comparable to what a non-athlete might receive or pass a “fair market value” assessment.

· Creates a national student-athlete agent registry.

· Directs the Attorney General to challenge state NIL rules that conflict with governing-body rules.

· Finally, strongly encourages Congress to pass permanent legislation that addresses the EO directives and formalizes them as law³.

Regarding enforcement, the EO directs federal agencies to evaluate whether a university’s transfer, eligibility, or pay-for-play violations could make it ineligible for federal grants and contracts³. So we see that institutional funding, as with other EOs, is directly targeted.

It should be noted that the EO is not self-executing and litigation, as has taken place in response to other EOs, is expected if enforcement actions begin. It seems that the EO has had its intended consequence. It motivated Congress with a deadline to get something passed that would bring some order to the chaos that defines the current state of collegiate sports.

THE PROTECT COLLEGE SPORTS ACT

As discussed in my June 17, 2026, CEOHigherEd Substack Newsletter, The Protect College Sports Act of 2026 (PCSA), introduced May 27 by Sens. Ted Cruz (R-TX) and Maria Cantwell (D-WA) with bipartisan backing, is now positioned for a Senate floor vote⁴.

(Please note that much of the narrative that follows was taken directly from that June 17 Substack newsletter.)

The bill is the most serious federal attempt to impose structural order on college athletics since the Sports Broadcasting Act of 1961. It also closely mirrors much of President Trump’s EO. When it was first introduced, the 111-page PCSA did five things:

1. The bill takes the terms of the House vs. NCAA settlement, which a federal court approved in 2025 and currently governs how schools pay athletes, and writes them into federal law. This is very important because court settlements can expire and be revisited by other courts and judges, but a statute cannot. The $20.5 million annual revenue-sharing cap, which grows at about 4% annually, becomes a permanent federal ceiling rather than a temporary court order. The bill also creates the College Sports Commission (CSC) as the new rulemaking and enforcement body for NIL, replacing the NCAA, but also gives the NCAA and CSC narrow antitrust exemptions to enforce eligibility, transfer, NIL and revenue-sharing rules⁵.

2. Regarding transfers and eligibility, the PCSA specifically grants the NCAA antitrust protection to reimpose a one-time transfer rule and establish a five-year eligibility standard. It also creates an agent registry capping fees at 5% and bars coaches from departing mid-season or universities from hiring coaches before the season ends⁵.

3. The PCSA creates a single national NIL standard, replacing the mix of 30 different state laws governing how student-athletes can earn money from their name, image, and likeness. Universities will also be required to report NIL activity above $600 to the CSC, creating a paper trail that did not exist before⁵.

4. The PCSA amends the Sports Broadcasting Act of 1961 to permit FBS institutions to voluntarily form a structure to pool and collectively negotiate media rights, provided that 75% of FBS schools participate. This was a provision that the SEC and Big Ten opposed as it could impact their current favorable media deals. This provision caused the Power 2 conferences to withhold their support when the PCSA was first introduced back in May⁶.

5. The PCSA prohibits Super League consolidation and is the second provision the SEC and Big Ten opposed when the bill was first introduced. The bill bars any conference with more than $1 billion in FY2025 revenues from merging with, consolidating with, or acquiring another conference’s assets, media rights, or membership. Senator Cruz at the hearing stated that the intent was to prevent the SEC and Big Ten from breaking away and forming a closed super league. The SEC and Big Ten, based on this provision as well, withheld their support when the PCSA was first introduced in May⁶.

SEC AND BIG TEN ANNOUNCE THEY WILL NOW FORMALLY BACK THE BILL. WHY? WHAT CHANGED IN THE BILL?

With the Trump EO ready to go into effect on August 1, we saw that on Friday, July 31, the SEC and Big Ten issued a joint statement endorsing the PCSA “as currently drafted,” crediting “detailed and productive negotiations” with Sens. Cruz, Cantwell, and Schmitt⁷⁸.

As stated, back in June, the SEC and Big Ten had announced they were withholding support⁹, so Friday’s reversal is very significant. With the Big 12 and ACC having already backed the bill since June, all four Power Four conferences are now aligned behind the PCSA, substantially improving its odds of passage⁷.

The revisions to the bill that influenced the SEC and Big Ten to endorse the bill were indeed substantial:

1. The revised language keeps media rights pooling voluntary and it also prohibits lawsuits against conferences like the SEC and Big Ten for declining to join the pool⁹. Win for SEC and Big Ten.

2. The anti-merger language was revised so it applies to all four power conferences, not just the Big Ten and SEC¹⁰. Another Win for SEC and Big Ten.

3. The revision included the creation of a “retention pool” exception that allows universities to spend an additional $20 million above the cap for retaining players in a variety of sports. It also allows an additional $5 million to be used for women’s sports retention¹⁰. Another Win for the SEC and Big Ten. Those are the two conferences that can best afford those new spending caps estimated to now be ~$46 million.

4. The revision tamps down the threat of a private equity-backed ‘super conference’ with new entities prevented from acquiring schools’ assets or media rights¹¹. Win for Congress, who really didn’t want to see any PE involved and risk the triggering of tax implications for such new entities.

5. The revision allows for conference expansion up to 19 league members. The Big Ten has 18 members and the SEC has 16 members so this limitation is significant. The PCSA also requires that programs moving from one power league to another operate as an independent for five years¹². This essentially keeps the Power 4 conferences frozen. Win for Congress. My guess is that Miami, Clemson, Florida State, North Carolina and Georgia Tech in the ACC are not pleased.

6. Finally, although there is a now a $21.3 million cap on paying athletes through revenue-sharing (from House vs. NCAA settlement), Athletic Departments have been exceeding that cap, some by a wide margin. They do it by routing monies paid to athletes through “associated entities” such as Athletic Department multimedia rights partners, corporate sponsors, and apparel companies that have contracts with them. But because the monies technically come from a “third-party” instead of directly from the university they don’t get counted against the $21.3 million cap. Although the final language of the bill has not yet been made public, it looks like these associated entity deals can take place BUT they will be counted against the cap¹³. More to come on this but looks like another Win for Congress.

The SEC and the Big Ten got much of what they were looking for in the current PCSA revision but there are several groups that remain opposed to it including the National Black Caucus, National College Players Association, AFL-CIO Sports Council, and National Urban League¹⁴.

THREE QUESTIONS TRUSTEES SHOULD BE ASKING RIGHT NOW ABOUT THE PCSA

The executive order and the PCSA are moving on separate but converging tracks, one through federal enforcement and one through legislation, and both now have institutional heavyweights behind them. With the bill’s current draft locked in by SEC and Big Ten support, three questions stand out for trustees to raise with the university’s athletics, legal, and finance leadership now, before the Senate vote.

1. Are we accounting for the PCSA’s new spending ceilings? The revised bill’s “retention pool” exception permits schools to spend up to $46 million above the base ~$21 million revenue-sharing cap, $20 million in a general retention pool, and $5 million earmarked for women’s sports retention. Trustees should confirm whether their Athletics and Finance leadership have modeled this expanded ceiling into their budgets, and where the additional funding is coming from, before treating it as available headroom. Most boards have already reviewed and approved their University and Athletics’ budgets in June for fiscal 2027, so there will be much work for these groups to get done quickly to provide these answers to their trustees.

2. Does our current NIL structure rely on the “associated entity” loophole the PCSA appears set to close? Many athletic departments have exceeded the ~$21 million House settlement cap by routing payments through third-party “associated entities”, such as multimedia rights partners, corporate sponsors, and apparel companies, that do not currently count against the cap. Early indications are that the PCSA will count those payments against the cap, which could force a rapid restructuring of existing NIL and revenue-sharing commitments.

3. What does the PCSA’s conference-membership freeze mean for our institution’s realignment options? The bill caps conference expansion at 19 members and requires any school that changes power conferences to operate as an independent for five years, effectively locking the Power Four’s current membership in place. Trustees at schools weighing, or bracing against, realignment should understand how this constrains strategic options and affects the value of existing media-rights and conference agreements.

SOURCES

1. CBS Sports, “President Trump signs executive order aimed at college sports, targeting transfers and eligibility,” April 2026.

2. Associated Press, “College Sports: Trump threatens schools federal funding in new order aimed at stabilizing industry” via CNN Politics April 3, 2026.

3. NBC News, “Trump signs order intended to stabilize college sports, threatens to cut funding,” April 3, 2026.

4. Sportico, “Protect College Sports Act’s Political Future Impacts NCAA Litigation,” 2026.

5. CBS Sports, “Bipartisan Protect College Sports Act proposes salary cap for players, antitrust protection, NIL regulation,” May 28, 2026.

6. Atlanta Journal-Constitution, “SEC, Big Ten jointly announce opposition to Protect College Sports Act,” June 3, 2026.

7. CBS Sports, “Big Ten, SEC voice support for Protect College Sports Act, breathing new life into landmark legislation,” July 31, 2026.

8. ABC17 News, “SEC, Big Ten give endorsement of ‘Protect College Sports’ Act,” July 31, 2026.

9. ESPN, “SEC, Big Ten withhold support for landmark college sports bill,” 2026.

10. Fox News, “Tick Tock: SEC and Big Ten receive revised Protect College Sports Act as Senate vote timeline looms”, July 28, 2026.

11. Yahoo Sports, ‘Senate Punts on College Sports Bill without Big Ten, SEC approval”, July 30, 2026.

12. Sports Illustrated, “Revised Protect College Sports Act Puts Pressure on Big Ten and SEC”, July 2026.

13. Yahoo Sports, “SEC, Big Ten vote to support congressional college sports bill after mad scramble”, August 2026.

14. Yahoo Sports, “Explainer: Everything you need to know about the “Protect College Sports Act’, including whether bill has a chance to pass”, August 2026.

With the 2026 FBS season starting in about a month, I thought I would return to college coaches’ contracts for this issue. As I reported in my May 20 Substack newsletter, “The $1 Billion Problem No One Booked”, during 2025, fifteen FBS football coaches were fired and their contracts obligated their universities to a combined $228 million payout – the largest single year buyout total in the history of college athletics. The point of that newsletter was to remind trustees that the average tenure of a fired FBS coach is 3.7 years, while the average contract, signed and approved by ADs and boards, is now approaching seven to ten years. Given those numbers, I wonder why anyone is surprised when the termination clause is exercised and they learn how much the university owes for the coach’s buyout. Additionally, many coaching contracts don’t have a claw-back clause; that is, if the fired coach gets another coaching job, the university must still pay the buyout.

This year, three of college football’s most legendary programs will open the season with new head coaches. Each of these hires, in my mind, offers a great case study for trustees who oversee Athletics’ finances as part of their fiduciary obligations, but, too often, don’t review the coaching contracts themselves, or better yet, get an independent legal review of the contract. The three coaching contracts represent over $250 million in compensation and termination obligations, agreed to, over a few weeks, last December. The speed of the contract signings and the size of the contract obligations should provide a caution to boards to make sure they perform thorough due diligence on coaching contracts placed in front of them for consideration – that, in some cases, equal the cost of constructing an academic building or a sizable chunk of the university’s financial aid budget.

Penn State

Penn State fired James Franklin mid-season last fall after twelve seasons. That termination triggered a buyout of almost $49 million¹. The university then hired Iowa State’s Matt Campbell, signing him to an eight-year, $70.5 million contract that starts at an annual base salary of $8 million in 2026 and increases to $9.25 million for 2031-2033. The annual base salary is fully guaranteed. In addition, but not guaranteed, Campbell’s contract provides for a $1 million retention bonus paid annually². As Campbell was under contract with Iowa State, Penn State also paid Iowa State a negotiated $2 million buyout fee³. This is, of course, a smaller figure compared to Franklin’s termination obligation; however, it is a reminder that buyout exposure runs both ways. Universities absorb the risks of paying out a dismissed coach, as well as, paying another university to hire their successor.

LSU

LSU’s numbers were even larger. The university fired Brian Kelly without cause, while honoring the remainder of his contract at a reported $54 million⁴. They then hired Ole Miss Head Coach Lane Kiffin to a seven-year, $91 million contract averaging $13 million annually. This contract made him the second highest-paid coach in collegiate football⁵. Kiffin’s deal obligates LSU to pay 80 percent of any remaining compensation if he is fired without cause, with no offset for earnings from a subsequent job⁶. This is the same structure that produced Coach Kelly’s payout. In addition, LSU agreed to pay Kiffin the bonuses he would have earned had he stayed at Ole Miss through the season’s CFP run. This was a highly unusual provision that made one university responsible for another’s incentive payouts. Ole Miss reached the Fiesta Bowl semifinal but lost to Miami. LSU, based on that run, paid Coach Kiffin $850,000 ⁷.

Florida

The University of Florida Gators terminated Coach Billy Napier in October 2025 and triggered a buyout of more than $20 million⁸. They then signed Tulane’s Jon Sumrall, after Kiffin picked LSU instead, to a six-year, $44.7 million contract averaging approximately $7.45 million annually.⁸ They also agreed to a $16.3 million staff salary pool, reportedly more than double the monies allocated to assistants under Coach Napier⁹. It should be noted that Coach Napier was paid $7.4 million in the final season before he was fired.⁸ Finally, Coach Sumrall’s buyout, if he is fired without cause, is equal to 70% of his remaining contract. However, there is an offset if he takes another NFL or D1 job¹⁰.

What Boards Should Take Away from These Real-World Coaching Cases

First, let’s talk about the accounting. Coaches’ buyouts should be assessed to determine if they are contingent liabilities and, at the very least, trustees should be advised by their auditors if they deserve a footnote on the university’s financial statements. I would encourage trustees to review my May 20 Substack newsletter “The $1 Billion Problem No One Booked” for a further discussion on this topic. The Franklin and Kelly buyouts initially triggered $103 million in obligations that no board appropriated through a conventional budget cycle. Both of those universities report the monies used to fund the final buyout payments came from self-generated athletics revenue and private donor gifts. But the question remains if the potential liability deserved a footnote reporting and if the universities or their athletic departments had their finances seriously impacted going forward.

Second, let’s look at the incentive structure. If the contracts have no mitigation or claw-back language, generally standard at the top of the coaching market, it means a university keeps paying a fired coach in full even after he takes another job. The rationale from ADs is that this is the market for top coaches. Yet it deserves board-level acknowledgment, not administrative sign-off alone, especially as these potential commitments can often exceed the funding requirement of capital projects that require full governance review.

Third, the governance arbitrage patterns this newsletter has discussed all year have highlighted significant financial commitments (e.g., LLC athletic department spinoffs, revenue-sharing formulas) moving away from board oversight. We now see evidence of nine-figure coaching buyouts also migrating toward athletic director and presidential discretion and away from the committee structures, policies, and processes that boards have set up to review/approve comparable dollar amounts elsewhere in the institution.

Trustees should consider if a president or athletic director could commit a university to $50 million in coaching compensation faster and with less formal review, than it takes to approve a modest campus renovation. Trustees serious about fiduciary oversight should be asking, at their next board meeting, how they will oversee coaching contracts including buyout authority and mitigation terms.

Sources

1. NBC News, “Penn State will pay nearly $50 million to fire the coach who took it to the playoff last season,” Oct. 2025.

2. Sports Illustrated (SI.com), “Penn State Releases Salary, Contract Details for Matt Campbell,” Dec. 8, 2025.

3. 247Sports, “The money owed to Iowa State upon Matt Campbell’s departure for Penn State,” Dec. 6, 2025.

4. Forbes, “Lane Kiffin Leaving Ole Miss For LSU—Here’s What We Know About His $91 Million Contract,” Dec. 1, 2025.

5. CBS Sports, “Lane Kiffin contract details: LSU coach gets seven-year, $91 million deal with extra incentives,” Dec. 2025.

6. Fox Sports, “From Ole Miss Bonuses to Buyout Incentives: Detailing Lane Kiffin’s New LSU Deal,” Dec. 2, 2025.

7. Forbes, “Lane Kiffin Leaving Ole Miss For LSU—Here’s What We Know About His $91 Million Contract,” Dec. 1, 2025.

8. Bleacher Report, “Jon Sumrall Reportedly Will Be Florida HC, What Is His Annual Salary on Contract?,” Nov. 30, 2025.

9. The Associated Press, via NBC News, “Florida hires Tulane’s Jon Sumrall as football coach with six-year, $44.7 million contract,” Nov. 30, 2025.

10. WRUF, “Diving Into Jon Sumrall’s Contract At Florida,” Dec. 2, 2025.The

https://agb.org/blog-post/boards-of-trustees-are-being-left-out-of-the-biggest-decisions-in-college-athletics/

https://agb.org/events/the-governance-challenge-in-college-athletics-mission-finance-and-board-oversight/

With its August 1 deadline less than two weeks away and half the emails in my inbox asking me to review again what the EO actually says, it seems to be a good time to revisit President Trump’s Executive Order (EO) on College Sports and summarize it all in one place.

What the Executive Order Says

President Trump signed “Urgent National Action to Save College Sports” on April 3, 2026. It was his second executive order (EO) on the subject, following “Saving College Sports” on July 24, 2025. The April order, the most recent one, is the one that matters right now. This EO applies only to federally funded institutions generating at least $20 million in annual athletics revenue, which equates to the Power Four programs and the highest tier of the Group of Six. ¹ The EO directs the NCAA and similar governing bodies (e.g., athletic conferences) to have the following in place by August 1, 2026:

• Eligibility limits: a five-year eligibility cap (excluding active-duty military service, official religious missionary service, and maternity leave), and a ban on professional athletes returning to college competition.

• Transfer restrictions: one free transfer with immediate eligibility, and a second one only for athletes who have completed a four-year degree.

• Guaranteed medical care for athletics-related injuries during enrollment and for a reasonable period after.

• Revenue sharing structured to protect and expand women’s and Olympic sports, with federal funds barred from funding NIL, revenue-sharing, or coaching compensation.

• Restrictions to eliminate “improper financial activity” or “fraudulent NIL”. These restrictions are to address “pay-for-play” disguised as NIL. The restrictions include: 1) a paying firm must be a genuine third party that is not affiliated with the university’s athletic department; 2) the athlete needs to be doing real work related to promoting or endorsing the firm’s product; 3) the compensation must be comparable to what a non-athlete would similarly receive or pass “the fair market value test”.

• A national student-athlete agent registry.

The EO will be enforced through federal grant and contract eligibility, not new legislation. This is important as many trustees and administrators I have talked with have assumed an executive order works like a statute or law. To be clear, EOs do not. The EO directs the Department of Education, the FTC, and the Office of Management and Budget to treat violations of the EO by institutions as a basis to question their “present responsibility” as federal contractors and grantees. Present responsibility means a contractor is honest, ethical, and has a satisfactory performance record. This is the same suspension of eligibility the administration has used against universities over other policy disputes. It also directs the Attorney General to challenge state NIL laws that conflict with governing-body rules, and “strongly encourages” Congress to pass permanent legislation, which the order itself, as I have noted, cannot substitute for.²

How It Landed: Reaction in Real Time

The White House

The administration describes the order as a response to “endless lawsuits and destabilizing financial obligations” threatening women’s and Olympic sports, and casts congressional inaction as the reason executive action “can’t wait.”³ President Trump previewed the legal fight himself at the EO’s signing, saying essentially that he expected the order to be challenged in court — and welcomed it. ⁴

The NCAA

NCAA President Charlie Baker called the order “a significant step forward” but emphasized that what mattered most was congressional legislation. ⁵ When asked more about it at the Final Four, Baker said again that the order had gotten Washington’s attention and credited the EO with motivating congressional action. ⁶

Conferences

At first, the Power Four commissioners publicly welcomed the order. ACC Commissioner Jim Phillips — I served on that conference’s board during the Clemson and Florida State revenue-distribution dispute— said there was “significant momentum” building to protect athletic and academic opportunity for the next generation of athletes.⁷ The SEC and Big Ten, however, have since become more resistant to the Protect College Sports Act (PCSA) as drafted. I will further discuss the PCSA later in this newsletter.

Legal and athlete-side skepticism

Sports attorney Mit Winter told CNN the order would likely force schools to choose between following a federal court order or a presidential one. He also predicted litigation from athletes and third parties “either way.”⁸ Steve Berman, co-lead plaintiff’s counsel in the athlete compensation cases, was more blunt when he called the order an affront to the Sherman Act.⁹ University of Nebraska President Jeffrey Gold, when asked to predict how courts would rule, replied that it was critical to keep athletics aligned with the institution’s broader mission.¹⁰ In my mind, an acknowledgment that nobody knows how this all will be resolved.

Where the NCAA Stands Now

The NCAA did not wait for the August 1 deadline to address eligibility. On June 23, 2026, the NCAA Division I Cabinet unanimously adopted the age-based, five-year eligibility model the EO called for. The new model replaces the old four-seasons-in-five-years structure with a continuous five-year clock that starts at full-time enrollment or the academic year following an athlete’s 19th birthday, whichever comes first.¹¹ Current athletes were given a choice of which model to use. Also, anyone entering college from this point on is locked into the new clock and traditional redshirting is effectively gone.¹²

This new NCAA rule is now the subject of the first serious court test that I wrote about in my last Substack newsletter (e.g., July 15 - “When Courts Do Congress’s Job: The Wagner Ruling and the NCAA’s Eligibility Mess”). It is the case that I would watch very closely. The lawsuit, brought by fifteen to twenty-four Division I basketball players—the number of plaintiffs has changed as the case moved forward—was filed against the NCAA the day after the new eligibility rule was adopted, arguing the new model was applied arbitrarily to the high school class of 2022, which got shut out of a fifth year that other classes received.

On July 9, 2026, Hamilton County, Ohio Judge Christopher Wagner granted a preliminary injunction, finding by “clear and convincing evidence” that the plaintiffs would suffer irreparable harm without it, and writing that the NCAA “claims to value competition” but that its “arbitrary enforcement” didn’t serve it.¹³ Wagner set an August 4 conference to prepare for trial.¹⁴ The NCAA has called the decision “wrong” and says it will seek a stay and pursue “all avenues for reversal, including appeal.”¹⁵

The NCAA moved quickly to comply with the spirit of the EO on eligibility, but it is now defending that same rule in court against the athletes it was supposed to protect. This is the conundrum legal observers flagged back in April; that is, comply with the order and risk conflicting with existing case law, or don’t comply and risk the order’s threat to funding.¹⁶

In my view—and one shared by many researchers and journalists I have spoken with—the NCAA moved quickly to satisfy a political deadline but fell short in building a rule able to withstand the inevitable first challenge by a plaintiff.

Where Congress Stands Now

The House’s response to the EO, the SCORE Act, is effectively dead for now. Speaker Mike Johnson has pulled it from consideration multiple times, most recently in May 2026, after failing to find the needed votes even amongst Republicans.¹⁷

Action has now shifted to the Senate, where Senators Ted Cruz (R-Texas) and Maria Cantwell (D- Washington) introduced the bipartisan Protect College Sports Act of 2026 (PCSA). I have written extensively on this bill in my Substack newsletter (e.g., June 17 – Congress is Trying to Fix College Sports. The Power 2 Don’t Like It). It would give the NCAA and conferences limited liability protection, preempt the jumble of state laws on NIL, prohibit merging of conferences or redistribution of their current assets (read: universities switching conferences) and, under certain conditions, allow conferences to pool media rights — the last two provisions the SEC and Big Ten strongly oppose.¹⁸

The bill cleared the Senate Commerce Committee 19-9 in June.¹⁹ As of July 17, co-sponsor Eric Schmitt told the Associated Press he believes it “probably” has the 60 votes to pass the full Senate, and called the next two weeks “critical,” while SEC and Big Ten leadership continue negotiating changes with Cruz and Cantwell to try to bring the two biggest conferences on board.²⁰ SEC Commissioner Greg Sankey has separately raised concerns in writing that a provision allowing athletes to sue in certain circumstances could generate more litigation not less.²¹ Even sponsors concede that if the bill clears the Senate, its odds in the narrowly divided House — where both parties found fault with SCORE — are far from certain.²² I’ve watched enough bills die in committee to be unsure whether this one will pass both chambers or get close and then stall. In short, it is too close to call.

What Happens Next: Where This Is Headed

This is a very dynamic situation that can change by the hour. So, I ask that you treat my commentary below as informed, thoughtful speculation, but not as a forecast.

• August 1 arrives without full compliance. Most observers expect this and so do I. The order’s own severability clause anticipates parts of it being struck down, and the eligibility fight alone shows how fast a governing-body rule adopted directly in response to the order ends up enjoined by a state court. In my mind, we should expect agencies to issue guidance on schedule while enforcement against any specific school remains slow, litigated, and highly selective.

• The Wagner injunction becomes the test case for the whole framework. If it survives the NCAA’s stay request and heads to trial, it could provide the first formal answer to the question every Office of Legal Affairs is thinking about: can a governing body impose the order’s eligibility model at all without being second-guessed class-by-class in state court? A win for the athletes here likely advances similar suits nationally, while a stay or reversal hands the NCAA, as well as the administration, leverage going forward.

• The Senate bill is the more plausible near-term vehicle for durable change, if it can hold together. Watch whether Cruz and Cantwell secure SEC/Big Ten sign-off in the next two weeks, as Schmitt suggests is the real deadline. A bill that passes the Senate without conference realignment support likely stalls again in the House, repeating the SCORE Act’s lack of success.

• Executive and legislative tracks keep running side-by-side. Don’t expect the EO to simply fade away once a bill moves. The administration has shown it will use threats to suspend funding as leverage against universities regardless of where Congress stands and, in a similar vein, congressional sponsors are explicitly using the order’s pressure to force a floor vote.

• Boards should plan for continued back-and-forth on eligibility and transfer rules through at least the 2026-27 season, regardless of which track wins. Even a bill or a final court ruling this fall wouldn’t retroactively settle rosters already built under competing rules. The prudent move is documenting compliance with whichever standard is currently in force, not betting on which one survives.

Why This Belongs on Your Board Agenda

This is governance arbitrage running in a direction I don’t usually flag in this newsletter. Most of what I write about here is decision-making authority migrating away from the board — into foundations, LLCs, private equity deals, or conference back rooms. Here it is the federal executive branch trying to migrate NCAA rulemaking authority toward itself, leveraging federal contracts and grants rather than legislation. This has happened because Congress has not produced a bill returning order to college athletics. I’ve sat on two DI athletic conference boards and two university boards through governance disputes that felt smaller than this one. But the pattern is very familiar to me even if the players are new: whoever controls the money finds a way to control the rules, formal authority notwithstanding.

Boards and university general counsels should be tracking three things right now: 1) your institution’s athletics revenue against the $20 million threshold, 2) your NIL collective’s fair-market-value documentation, and 3) how your conference’s transfer and eligibility rules match up with those the EO has targeted for implementation on August 1. The NCAA hasn’t finalized how it will meet those EO requirements, especially after the Ohio injunction in favor of the basketball players. I will continue to flag the Wagner trial, the Senate floor vote, and any direct legal challenge to the executive order itself as they come about.

Sources

1. Associated Press, “College sports: Trump threatens schools’ federal funding in new order aimed at stabilizing industry,” via CNN Politics, Apr. 3, 2026.

2. NBC News, “Trump signs order intended to stabilize college sports, threatens to cut funding,” Apr. 3, 2026.

3. The White House, “Fact Sheet: President Donald J. Trump Takes Urgent National Action to Save College Sports,” Apr. 3, 2026.

4. CBS Sports, “President Trump signs executive order aimed at college sports, targeting transfers and eligibility,” Apr. 3, 2026.

5. The White House, statement of NCAA President Charlie Baker, “President Trump is Saving College Sports,” Apr. 2026.

6. Sports Illustrated, “NCAA President Charlie Baker Addresses Trump Executive Order, Tournament Expansion at Final Four,” Apr. 4, 2026.

7. CNN Politics, “College sports: Trump threatens schools’ federal funding in new order aimed at stabilizing industry,” Apr. 3, 2026.

8. CNN Politics, “College sports: Trump threatens schools’ federal funding in new order aimed at stabilizing industry,” Apr. 3, 2026 (attorney Mit Winter).

9. ESPN, “Executive order aims to limit NCAA athletes to 5 years, 1 transfer” (quoting attorney Steve Berman), Apr. 3, 2026.

10. PBS NewsHour, “Trump signs order aimed at stabilizing college sports with threats to federal funding,” Apr. 4, 2026.

11. Fox Sports, “NCAA’s New Eligibility Rules Affect Transfers, Rosters And Playing Time,” June 23, 2026.

12. ESPN, “NCAA Division I Cabinet OK’s 5-year, age-based eligibility,” June 23, 2026.

13. ESPN, “Ohio judge grants injunction for hoops players suing NCAA,” July 9–10, 2026.

14. ESPN, “Ohio judge grants injunction for hoops players suing NCAA,” July 9–10, 2026.

15. Fox19 (Cincinnati), “Hamilton County judge grants injunction over fifth-year eligibility for NCAA athletes,” July 10, 2026.

16. CNN Politics, “College sports: Trump threatens schools’ federal funding in new order aimed at stabilizing industry,” Apr. 3, 2026.

17. Sportico, “With SCORE Act Vote Canceled, Colleges Need to Look in the Mirror,” May 20, 2026.

18. Associated Press via ABC News, “Senator says key piece of college sports legislation ‘probably’ has 60 votes to clear upper chamber,” July 17, 2026.

19. CBS Sports, “Protect College Sports Act passes Senate committee amid Big Ten, SEC opposition,” June 18, 2026.

20. Associated Press via ABC News, “Senator says key piece of college sports legislation ‘probably’ has 60 votes to clear upper chamber,” July 17, 2026.

21. Associated Press, reporting on SEC Commissioner Greg Sankey’s letter to school presidents, June 2026, via AP News.

22. Associated Press via ABC News, “Senator says key piece of college sports legislation ‘probably’ has 60 votes to clear upper chamber,” July 17, 2026.

A Hamilton County, Ohio judge just did what Congress has spent two years not doing. He set a national eligibility rule for college basketball. He didn’t mean to. But that’s exactly what happens when a governance vacuum sits open for so long: somebody else fills it and this time it was a judge in Cincinnati.

The Lawsuit

On June 24, fifteen men’s and women’s basketball players filed suit against the NCAA in Hamilton County. That was one day after the NCAA’s DI Cabinet approved a new age-based eligibility model¹. The model gives student-athletes five years of eligibility that starts when they first enroll full-time or the academic year following their 19th birthday, whichever comes first. This would eliminate waivers and red-shirt years that extend eligibility except for circumstances involving pregnancy, religious missions, or active-duty military service.²

The issue for the students and their lawyers is that the this rule applies to the high school graduating class of 2023 and then goes forward; but it excludes most of the Class of 2022. This ‘22 class is a group of student-athletes who spent four years competing against classmates who got an extra year of eligibility due to COVID. By the time the NCAA finalized this new rule in June, these student-athletes had already used up their eligibility under the prior eligibility model. The lawsuit has grown to 24 plaintiffs and could continue to grow. Attorneys have more than 50 basketball players lined up for similar filings in other jurisdictions, and a case is now moving along in Tennessee on behalf of football players¹.

The plaintiffs, and this is important to understand, are basing their suit on contract law. They argue the NCAA Manual functions as a binding agreement - or contract - between the NCAA and its athletes. When the NCAA changed the eligibility model and its rules in June, the plaintiffs claim they breached that agreement.

What Judge Wagner Ruled

On July 9, Judge Christopher Wagner granted a preliminary injunction. In deciding, he found that the NCAA had applied its own eligibility rules in an “arbitrary and capricious” manner, that the plaintiffs had a “substantial likelihood of success on the merits of the case,” and that they would suffer “irreparable injury” ². He rejected the NCAA’s counter-argument that letting these student-athletes play would harm incoming freshmen and transfers. He noted that the plaintiffs weren’t trying to bump anyone off a team. They just wanted to compete for spots that were already open. He also gave the plaintiff student-athletes access to the transfer portal outside the typical window¹.

Judge Wagner also pointed about how much money was at stake for the student-athletes. Testimony described tens of millions of dollars in NIL funding available to the affected student-athletes. Wagner then used those monies to describe the NCAA as looking like “a highly profitable professional sports league” versus the voluntary association it claims to be¹. His injunction right now applies to just the 24 plaintiffs, but if it holds up in court, it could extend the same treatment to similar 2022 graduates. A trial preparation conference is scheduled for August 4².

The NCAA’s Response

As you can imagine, the NCAA didn’t agree. Its statement called the ruling “wrong” and said it would “immediately seek all avenues for reversal, including a stay of the court’s order pending appeal.” The NCAA accused Judge Wagner of disregarding “over a century of precedent” and substituting his own judgment “for the collective expertise of the nation’s leading higher education institutions”². The NCAA used this moment to also renew its consistent appeal to Washington, saying, once again, “it is apparent that Congress must act swiftly to restore stability, uniformity, and fair competition in college athletics”².

That line is worth emphasizing. The NCAA is, in effect, asking Congress to do for it what it can no longer do for itself; that is, set one rule that state courts must abide by.

What the Protect College Sports Act (PCSA) Would Have Actually Done Here

This is the part that should make trustees and conference lawyers pay attention. The Protect College Sports Act — the Cruz-Cantwell bill that cleared Senate Commerce 19-9 in June — includes its own federal eligibility standard: five years of eligibility beginning at 19 or high school graduation, with allowances for pregnancy, religious mission, and military service³. That is very close to what the NCAA already adopted in June. Given that, the PCSA probably would not have remedied the Class of 2022’s eligibility issue.

Where the PCSA would have changed a lot is procedural. The bill gives the NCAA an antitrust exemption to enforce eligibility, transfer, and compensation rules⁴, paired with preemption of conflicting state law⁵. That means if the PCSA were in effect today, a state judge in Ohio would have a much harder time issuing a temporary injunction against a nationally uniform, federally sanctioned eligibility rule as Judge Wagner did. The NCAA wouldn’t be defending its actions as an ordinary contract subject to state-by-state contract law and state judges with their own read on “arbitrary and capricious.” The NCAA would have a congressional statute to provide it cover.

That’s the real story here, and it’s the same story I’ve been writing about the LLC spinoffs and the House settlement in the CEOHigherEd newsletter for weeks now. That is, in the absence of federal legislation, every impactful governance decision in college sports keeps migrating to whatever forum will hear it the fastest and is the most convenient (e.g., a state court, an arbitrator).

Call it governance by litigation instead of governance by boards. The issues get adjudicated wherever and whenever the opportunity arises, rather than resolved by the people - in the NCAA, conferences, and universities - responsible for the college sports programs and their student-athletes. The NCAA wants Congress to close that gap. But each week Congress doesn’t act, it gives state judges the opportunity to affect eligibility for thousands of student-athletes. As I have said, the PCSA is not perfect by any means, but it is better than having no order and no national governing body over college sports at all.

Kim Schatzel, Ph.D., is the founder of CEOHigherEd and served as president of Towson University and the University of Louisville. She served on two NCAA Division I Athletic Conference boards, including the ACC. CEOHigherEd publishes practitioner-grounded analysis of higher education governance and leadership for university presidents, provosts, trustees, legislative leaders, and policymakers.

Notes

1. “Ohio judge grants injunction for hoops players suing NCAA,” ESPN, July 9, 2026.

2. “Judge blocks NCAA from enforcing new eligibility rules,” Yahoo Sports, July 9–10, 2026.

3. “Protect College Sports Act headed to Senate for full vote,” ESPN, June 2026.

4. “Protect College Sports Act moves out of Senate committee, with SEC, Big Ten still opposed,” Yahoo Sports, June 2026.

5. “With Protect College Sports Act under scrutiny, NIL deals with ‘associated entities’ creating confusion,” Yahoo Sports, June 2026.

Two months ago, Dusty May cut down the nets in Indianapolis as the head coach of a national championship team. Last week, he was introduced in Dallas as the new head coach of the Mavericks, a franchise built around Cooper Flagg. Michigan’s athletic director had told the Board of Regents that a new contract was agreed to. May never signed it.^[i][ii] College coaches rarely leave for the NBA, and almost never right after winning it all. May offered his own account, in a farewell statement and an introductory press conference, and it centered on opportunity and family. But the reporters who cover college basketball for a living had a different, more consistent story to tell, and it kept returning to the same two words: portal and NIL. May is not even the sport’s loudest voice on the subject. Weeks earlier, a coach with seven national championships to his name told a U.S. Senate committee much the same thing, in considerably blunter terms.

The Résumé He Was Walking Away From

May arrived in Ann Arbor in 2024 after a Final Four run at Florida Atlantic, inherited a program coming off an 8-24 season, and in two years produced a 64-13 record, a Big Ten regular-season title, a Big Ten Tournament title, and a national championship.^[iii] He is only the second head coach to leave a program for the NBA immediately after winning a college title, joining Larry Brown, who left Kansas for the NBA in 1988.^[iv]That context matters, because it means whatever pulled him away had to outweigh a level of college success very few coaches ever reach.

May’s Framing: Opportunity and Family, Not an Exit

May was direct about how this started. He said the first real conversation with Dallas came at the NBA Combine, and that going in, he had intended to return to Michigan regardless. That changed once the Mavericks’ front office raised the idea of the opening, and May described the job as one that checked every box he had—the organization, a roster already built around Flagg and Kyrie Irving, and the quality of life Dallas offered his family.^[v] In his farewell letter to Michigan, he went further, framing the decision almost entirely around what was right for his family and thanking the fan base and program for two memorable years.^[vi] Asked directly whether the state of college athletics factored into his choice, May said it was not a big reason, crediting the Mavericks’ people first.^[vii]

What May Conceded, Once Pressed Further

In a separate conversation days later, May offered a more textured version of that answer. He drew a direct comparison between his earlier move from Florida Atlantic to Michigan and this move to the NBA, describing the accumulated pressure of five years of the NIL era as something that made the jump to professional basketball feel like a natural continuation rather than an escape. He also acknowledged there were parts of college coaching he would not miss, without itemizing them, and noted that managing paid, mobile rosters had already begun to resemble managing professional ones.^[viii]

What Sports Media Concluded, Regardless of How He Framed It

National reporters who had spent time with May before the move described a coach who was considerably more candid in private than in his public statements. CBS Sports’ Matt Norlander recounted an April conversation in which May said he could not picture himself running a college program much longer, citing the compounding cost of roster-building, which he suggested was rising at a rate approaching 300% year over year, along with the NCAA’s limited institutional control over transfer and NIL activity.^[ix] Sports Illustrated opened its own account of the departure with an anecdote from the championship celebration itself: a Michigan assistant coach checking his watch for the exact minute the transfer portal would open, less than twenty minutes after the confetti fell. The magazine’s reporting placed May alongside a longer list of veteran coaches who have cited the transfer and NIL landscape among their reasons for leaving the college game in recent years, and quoted May himself describing the days after his title as barely leaving room to celebrate.^[x]

CBS Sports’ own reporting captured what amounted to the central paradox of the move: May had benefited from the modern landscape as much as any coach in the sport, building his championship roster largely through the transfer portal and drawing on Michigan’s NIL resources, yet he described the championship itself as anticlimactic, saying the destination felt “less than it” compared to the journey that led there, and Michigan waited five days to raise its own championship banner because there was no guarantee everyone responsible for it would still be in the room.^[xi]That same reporting on Michigan’s roster warned that the Wolverines now faced transfer-portal exposure as a direct result of the coaching change, predicting that more young, in-demand coaches would follow May’s path to the pros because of what it called recruiting instability in college basketball.^[xii] Another outlet situated the exit alongside Michigan’s earlier loss of football coach Jim Harbaugh to the NFL, asking directly why championship-caliber coaches keep leaving the college game for professional leagues at the exact moment their programs peak.^[xiii]

It Wasn’t Just May: A Seven-Time Champion Said the Quiet Part on Capitol Hill

May is a successful coach describing a system he found exhausting. He is not, however, the most decorated coach to say so this year. Weeks before May’s move became public, Nick Saban—who won seven national championships across two programs—testified before the Senate Commerce Committee at the same hearing examining the Protect College Sports Act, and did not soften his assessment. He said the current model amounts to an unregulated bidding war that has drifted away from player development, warned that the system as constructed is not sustainable, and said bluntly that it was not good for the athletes it was supposed to help.^[xiv] He has made a version of this argument repeatedly since retiring from Alabama, at one point saying that everything he had believed about college athletics across fifty years of coaching no longer described the sport he retired from, and at another saying plainly that people in Washington needed to act, regardless of who ultimately got credit for it.^[xv]When a coach with seven championship rings and a coach who just won his first are independently describing the same environment as unsustainable, that is no longer a personality conflict between one man and one job. It is a pattern statement about the system itself.

What the Protect College Sports Act Would Actually Change

Congress has a bill in front of it that speaks directly to nearly every frustration cited above. The Protect College Sports Act would replace the current patchwork of more than thirty conflicting state NIL laws with a single federal standard, require NIL contracts to disclose basic terms, and require universities to report NIL activity above $600 to a new College Sports Commission, creating the kind of paper trail and predictability that has been almost entirely absent from the deals coaches like May now have to navigate season over season.^[xvi] On the roster-churn side, the bill grants the NCAA antitrust protection to reimpose a one-time transfer rule and a five-year eligibility standard, directly targeting the unlimited, year-round movement that Michigan’s own staff was managing minutes after the championship confetti fell. It also creates a registered agent system with fees capped at 5%, and separately bars coaches from leaving mid-season and universities from poaching coaches before a season concludes—a provision aimed at exactly the kind of compressed, chaotic coaching and recruiting calendar that reporting on May’s exit described in detail.^[xvii]

None of this is theoretical for boards. If enacted, the PCSA would give athletic departments a federal floor for NIL disclosure, a capped and registered agent system, and a bounded transfer calendar to build retention strategy around, instead of the current environment where every one of those variables is negotiated informally, conference by conference and coach by coach. Whether or not any individual trustee supports every provision, the bill is the most direct legislative answer currently on the table to the specific complaints driving coaches like May and Saban toward the exits or the microphones.

Three Questions for Your Board

Does your board understand exactly how the PCSA’s federal NIL standard would preempt your state’s own NIL law, and what changes on day one if it does? Preemption is not a talking point. It determines which contracts, disclosure practices, and collective arrangements your institution currently relies on would need to be rebuilt immediately, and your board should be able to name them specifically, not generally.

Has your board quantified what the PCSA’s one-time transfer rule, five-year eligibility standard, and 5%-capped agent registry would actually do to your program’s roster costs and retention strategy? A general position on “reform” is not the same as knowing whether these specific provisions raise or lower your institution’s costs, and whether they make it easier or harder to keep the roster you already have.

Does your institution have a documented, board-approved position on the PCSA’s specific provisions, or only a public statement about the bill in general? If your institution is quietly lobbying against the NIL standard, agent caps, or transfer limits that would address the exact problems your own coaches are naming publicly, your board should know that before the next hearing, not after.

The Bottom Line

Dusty May’s own account of why he left Michigan centered on a rare professional opportunity and his family. The sports media that covered him closely, and a seven-time national championship coach testifying to Congress in the same window, told a more consistent story: the transfer portal and NIL environment have become a runaway train that individual institutions can no longer slow down on their own. The Protect College Sports Act is the most concrete attempt Congress has made to apply the brakes. Boards do not have to agree on every provision. They do need to know exactly what the bill would change, what happens if it fails, and whether their own institution is pushing for the order two champion coaches have now publicly said the sport is missing.

Kim Schatzel, Ph.D., is the founder of CEOHigherEd and served as president of Towson University and the University of Louisville. She served on two NCAA Division I Athletic Conference boards, including the ACC. CEOHigherEd publishes practitioner-grounded analysis of higher education governance and leadership for university presidents, provosts, trustees, legislative leaders, and policymakers

^[i]ClickOnDetroit/WDIV. (2026, June 23). Dusty May breaks silence after leaving Michigan basketball for Dallas Mavericks head coaching job.

^[ii]ESPN. (2026, June 24). Sources: Michigan’s Dusty May finalizing deal to become Mavericks coach.

^[iii]Fox News/OutKick. (2026, June 23). Dusty May leaving Michigan for Dallas Mavericks after leading Wolverines to national championship.

^[iv]Sports Illustrated. (2026, June 23). Dusty May Leaving Michigan: Every National Title-Winning College Coach Who Jumped to the NBA.

^[v]Detroit News. (2026, June 30). Dusty May, ex-Michigan coach, says Mavericks job checked all the boxes.

^[vi]ClickOnDetroit/WDIV. (2026, June 23). Dusty May breaks silence after leaving Michigan basketball for Dallas Mavericks head coaching job.

^[vii]Yahoo Sports. (2026, June 30). Dusty May addresses role of NIL era in Michigan departure, how it can be ‘segue’ to NBA.

^[viii]Yahoo Sports. (2026, June 30). Dusty May addresses role of NIL era in Michigan departure, how it can be ‘segue’ to NBA.

^[ix]CBS Sports. (2026, June 22). Why Dusty May leaving Michigan and college basketball behind in June isn’t surprising.

^[x]Sports Illustrated. (2026, June 24). Dusty May’s Departure Reveals a Huge Problem College Basketball Can’t Ignore.

^[xi]CBS Sports. (2026, April 21). Michigan’s championship glow faded fast for Dusty May in the transfer portal era.

^[xii]CBS Sports. (2026, June 22). Inside the stay-or-go transfer decisions for Elliot Cadeau, Michigan’s roster after Mavericks poach Dusty May

^[xiii]Detroit News. (2026, June 22). Shaky world of college athletics could push more coaches to leave, experts say.

^[xiv]ESPN. (2026, June 3). Nick Saban asks Congress to ‘bring order’ via college sports bill.

^[xv]CBS News. (2026, June 3). Nick Saban testifies in support of bill to regulate NIL rules: “It’s become an arms race.”

^[xvi]CBS Sports. (2026, June 3). Protect College Sports Act: Nick Saban, leaders back NIL reform before Congress.

^[xvii]Yahoo Sports. (2026, May 27). Key senators strike bipartisan deal on sweeping college sports reform with transfer, eligibility and cap enforcement.

Revenue sharing was supposed to bring order to college athletics compensation. Instead, universities have turned a $20.5 million cap into an obstacle to navigate around.

The House v. NCAA settlement was approved by a federal judge on June 6, 2025. It represented a true break from the NCAA’s century-old amateurism model. For the first time in history, the settlement provided that universities could pay student-athletes directly from institutional revenues.¹ Presidents, chancellors, trustees and athletic directors told themselves the spending chaos at least had a framework and limitations now.

However, it did not last.

As the 2026-27 academic year approaches, the revenue-sharing cap, approximately $21.3 million per school², has become less a ceiling than a starting point. The gap between what the settlement authorized and what universities are spending on their rosters may approach or exceed $1 billion by the fall. Rogue boosters are not driving that gap. It is the universities themselves.

Understanding what happened requires looking at three overlapping mechanisms: the cap mechanics as designed, the workaround universities figured out almost immediately, and the legislative battle now underway in Congress that may or may not close the loophole.

The Settlement, By the Numbers

The House settlement did two things. First, the NCAA and Power Four conferences agreed to pay $2.8 billion over ten years to approximately 184,000 former Division I athletes who competed from 2016 onward. This “backpay” was intended to compensate them for NIL opportunities lost under previous restrictions.³

Second, it created a forward-looking direct revenue-sharing system for universities. Starting July 1, 2025, each participating Division I institution may share up to 22 percent of the average revenue derived from media rights, ticket sales, and sponsorships across Power Five schools.⁴ For 2025-26, that cap was approximately $20.5 million per school. For 2026-27, it climbs to an estimated $21.3 million, with annual increases of roughly 4 percent projected through 2035, when the cap is expected to reach approximately $33 million.⁵

Finally, the settlement also established the College Sports Commission (CSC) as the new enforcement body, replacing the NCAA’s suspended NIL enforcement apparatus. The CSC, through a platform called NIL Go, reviews all third-party NIL deals exceeding $600 to determine whether they serve a legitimate commercial purpose at fair market value versus a disguised pay-to-play vehicle. ⁶

On paper, this all looked good. In practice, universities found the workaround almost immediately.

The “Associated Entity” Loophole and the Court’s Ruling

The workaround is simple. Universities, particularly those in the SEC and Big Ten whose brands command the highest premium from corporate partners, began “redirecting” revenue that would traditionally flow to the athletic department. Instead of booking it as institutional revenue and therefore counting towards the cap, the monies went through the hands of multimedia rights partners, corporate sponsors, and apparel brands.

For example, Learfield and Playfly, the two dominant multimedia rights (MMR) companies that hold partnership agreements with most major programs, became pathways for NIL deals. Nike and Adidas followed. These entities, because they hold contractual relationships with universities, have been treated as “associated entities” under the settlement framework; that is, their NIL deals with student-athletes are subject to CSC review for valid business purpose and fair market value, but it was believed those monies fell outside the revenue-share cap itself.⁷

The practical effect was a university operating at its $21.3 million cap could pass along millions more to its roster through an “associated entity” NIL arrangement. Industry critics described this practice pejoratively as “money washing.”⁸

The scale is significant. The CSC has approved nearly $300 million in third-party student-athlete NIL deals since its inception last year, with a majority believed to involve associated entities. More than $200 million in additional compensation has been either rejected or remains under review; again, mostly from associated entity arrangements. The total above-the-cap submissions to the CSC are expected to exceed $500 million by the time men’s basketball players submit their contracts later this summer.⁹

As reported by Yahoo Sports, by the end of summer the above-the-cap NIL deals submitted to the CSC “will come close to matching” the compensation distributed through direct revenue-sharing. If that is accurate that means the associated-entity spending could approach $1 billion or close to the entire revenue-sharing pool across all participating universities combined. ¹⁰

That number upends the settlement. The cap was supposed to represent the upper bound of university spending on athlete compensation. Instead, it has become the floor.

Congress Steps In — With a Section That Changes Everything

The Protect College Sports Act (PCSA), the bipartisan Cruz-Cantwell legislation introduced in June, was designed to address broad structural issues: a federal NIL standard to replace the state-law jumble, regulation of agents and fees, eligibility and transfer rules, and, most importantly, a limited antitrust exemption that would allow the NCAA to enforce its own rules without the constant threat of lawsuits.¹¹

But in the bill is Section 114 which has surfaced as one of the controversial and contested pieces of the legislation. Section 114 prevents student-athlete NIL deals struck with “associated entities” from resulting in “compensation in an amount that would circumvent or result in the institution exceeding the revenue-share cap.”¹²

Section 114 seems to close the loophole. Multimedia rights deals, apparel brand arrangements, and similar structures would count against the cap. Universities that have built their student-athlete compensation strategies through above-the cap spending via associated entities would face a serious legal barrier to continuing that practice.

The reaction to Section 114 has been serious. Nineteen athletes representing seven sports and fourteen conferences submitted a letter to lawmakers arguing that Section 114 would “have a severe negative impact and greatly inhibit” their earning potential.¹³ Several Big Ten university presidents are preparing letters of concern. The NCAA, in a presentation to conference commissioners, confirmed its interpretation that the bill requires associated entity deals to count toward the cap.¹⁴

The divide maps almost perfectly onto institutional self-interest. SEC and Big Ten programs, with their brand power and corporate relationships to support above-the-cap spending, oppose Section 114. Programs with fewer corporate relationships see it as leveling the field. The “Power 2” dynamic that Senator Cantwell’s staff documented in a report on media rights revenue distribution is playing out again over enforcement.¹⁵

As of this newsletter’s publication, the Senate Commerce Committee markup of PCSA is underway. Whether Section 114 survives the amendment process will determine whether the settlement’s cap means anything at all. Additionally, a federal court ruling issued on June 25, 2026 has sharpened that question as well.

The Court Weighs In with its June 25 Ruling

On June 25, 2026, U.S. Magistrate Judge Nathanael Cousins, the settlement administrator for the House case, issued a ruling that addressed one contested question while leaving the deeper spending dynamic largely intact. The ruling denied a motion by class counsel Steve Berman and Jeffrey Kessler, who had sought a court order declaring that multimedia rights companies (MMRs) (Learfield, Playfly Sports, JMI Sports) and third-party brand sponsors (banks, apparel companies, airlines, car dealerships) are categorically not associated entities under the settlement.¹⁷

Judge Cousins declined to issue a categorical exemption. “The Court will not categorically declare MMRs as not Associated Entities,” the ruling states. “It is possible that some MMRs do fall within the term.” On third-party brand sponsors, the court applied the same thinking; that is, whether a sponsor qualifies as an associated entity depends on the specifics of its relationship with the university, not on the nature of the entity class as a whole.¹⁸

The ruling was a win for the NCAA and the College Sports Commission, whose CEO Bryan Seeley said it “affirms that the CSC has been correctly applying the language of the settlement as written.” The practical implication is that MMR partners and university sponsors are subject to CSC review under NIL Go, and their deals must continue to demonstrate a valid business purpose at fair market rates. The Nebraska decision is upheld. There a neutral arbitrator affirmed the CSC’s rejection of millions of dollars in Playfly-structured NIL deals for 18 Nebraska football players. The finding was the NIL deals lacked a valid business purpose and violated the prohibition on “warehousing” NIL rights.¹⁹

What the ruling does not do is slow is the volume of above-the-cap spending. Multiple college football rosters are expected to exceed $40 million for the 2026 season (close to double the revenue-sharing cap) with more than half of those rosters funded through above-the-cap arrangements. The CSC has raised the threshold below which it will not subject associated entity deals to full review. NIL deals between $600 and $15,000 are now exempt from the range-of-compensation check unless an athlete has accumulated $50,000 in associated deals in a given academic year.²⁰ That threshold adjustment has reduced the volume of routine reviews of NIL deals.

The case now goes to Judge Wilken on appeal as class counsel Berman announced within hours of the ruling that an appeal would be filed within 14 days. Judge Wilken’s review will carry greater weight, as she oversaw the original settlement negotiations and issued final approval. What she cannot do, however, is rewrite the settlement’s terms. The associated-entity definition, as negotiated by Berman and Kessler themselves, does not exclude MMRs or third-party sponsors. This constraint worked against class counsel’s position before Judge Cousins and is unlikely to be reversed on appeal.²¹

What Board Leaders and Presidents Need to Understand

The NIL enforcement and revenue-sharing story is not primarily a compliance story. It is a governance story. The gap between what the settlement authorized and what schools are actually spending exists because institutional leaders (e.g., presidents, chancellors, athletic directors, and trustees) quickly found a workaround to the cap in the framework.

That choice carries institutional risk that needs to be understood and quantified. The June 25 ruling added a clear requirement; that is, the CSC retains review authority over MMR and sponsor-structured NIL deals on a case-by-case basis. In addition, universities that assumed those NIL deals were structurally outside the settlement’s reach now face fact-specific review and approval by the CSC on every deal.

Additionally, if Congress passes the PCSA with Section 114 intact, programs that built rosters around associated-entity monies will face sudden and large reductions in student-athlete NIL deals with little transition time. Finally, the student-athletes who signed those contracts based on above-the-cap representations will have legitimate grievances. The agents and collectives that structured the deals may also face liability. Finally, the boards that did not complete proper due diligence by seeking independent counsel’s opinion on whether the above-the-cap NIL deals by associated entities had downside risk will now have to mop up the mess.

The August 1, 2026 effective date for the Trump administration’s executive order (EO) on college sports adds another compliance clock. The EO defines “fraudulent NIL schemes” to include arrangements that pay above fair market value as an inducement to play. That is what critics say the associated entity NIL deals are intended to accomplish. The EO would direct federal contracting and grant-making agencies to evaluate violations when assessing institutional responsibility.¹⁶

For presidents and trustees who have been watching the NIL and revenue-sharing chaos, the student-athlete compensation issue has morphed into a federal contracting issue, a courtroom battle, and a congressional negotiation. Three separate paths — the Cousins’ ruling and its pending Wilken appeal, the PCSA Section 114 debate in the Senate Commerce Committee, and the August 1 Trump Administration’s EO compliance clock — are all converging in judgement regarding associated entity NIL deals. The question is no longer whether your institution is compliant with NCAA regulations. It is whether your institution’s associated entity NIL deals can survive scrutiny from all three paths.

That is the kind of conversation that belongs in the boardroom, not just the office of the athletic director.

ENDNOTES

1. ESPN, “Judge OK’s $2.8B Settlement, Paving Way for Colleges to Pay Athletes,” espn.com, June 7, 2025.

2. CBS Sports, “House v. NCAA Settlement Approved: Landmark Decision Opens Door for Revenue Sharing in College Athletics,” cbssports.com, June 7, 2025.

3. ESPN, op. cit.

4. ESPN, op. cit.

5. CBS Sports, op. cit.

6. ESPN, op. cit.

7. Yahoo Sports, “With Protect College Sports Act Under Scrutiny, NIL Deals with ‘Associated Entities’ Creating Confusion,” sports.yahoo.com, June 2026.

8. Ibid.

9. Ibid.

10. Ibid.

11. ESPN, “Bipartisan College Sports Bill Proposes Salary Cap, Transfer Limit,” espn.com, May 27, 2026; CBS Sports, “SEC Leaders Discussing Contingencies Amid Protect College Sports Bill Announcement,” cbssports.com, May 28, 2026.

12. Yahoo Sports, op. cit.

13. Ibid.

14. Ibid.

15. ESPN, “Protect College Sports Act Headed to Senate for Full Vote,” espn.com, June 2026.

16. CBS Sports, “President Trump Signs Executive Order Aimed at Regulating College Sports,” cbssports.com, April 3, 2026.

17. Sportico, “NCAA, CSC Score Key Win in Associated Entities Spat,” sportico.com, June 26, 2026;

18. On3, “Judge Upholds Associated Entity Model in House Settlement as MMRs Remain Subject to College Sports Commission,” on3.com, June 26, 2026.

19. Sportico, “Nebraska-Playfly Arbitrator Ruling Raises Stakes in House NIL Fight,” sportico.com, May 12, 2026.

20. On3, op. cit.; CBS Sports, “Protect College Sports Act Passes Senate Committee Amid Big Ten, SEC Opposition,” cbssports.com, June 2026.

21. Sportico, “NCAA, CSC Score Key Win in Associated Entities Spat,” op. cit.

Brendan Sorsby admitted to placing approximately 9,000 bets totaling at least $90,000 over four years, including dozens on the games of his own team. The NCAA ruled him permanently ineligible. The NCAA has had a strict ban on gambling by student-athletes and athletics staff since its founding in 1906. A Lubbock County judge overturned that NCAA decision anyway, not by finding the wagering rule unfair, but by finding the NCAA breached its own bylaws in the way it enforced the rule against Mr. Sorsby.

The Short Version of the Case

I think it is important to begin with some details about the Sorsby Case. Mr. Sorsby transferred to Texas Tech from Cincinnati this past spring as a QB and received a reported $5 million NIL deal. He arrived as the marquee player for the Red Raiders football team with one goal in mind - to contend for the College Football Playoff. In March 2026, law enforcement was tipped by a sportsbook regarding unusual activity, that led the NCAA to Sorsby. Their investigation found he had wagered on professional and college sports across four years at Indiana, Cincinnati, and Texas Tech. His wagering included at least 40 bets on Indiana football games in 2022, while he was a freshman on the Hoosier team.

Texas Tech was notified in April. Sorsby admitted to a gambling addiction, entered a 35-day inpatient treatment program, and the NCAA ultimately ruled he was permanently ineligible, again the standard penalty for any student- athlete. Texas Tech appealed for reinstatement and the NCAA denied it. On May 18, Sorsby sued the NCAA in Lubbock County District Court, arguing the NCAA’s own bylaws obligated it to support his mental health rather than end his playing career over it.

Why the Judge Sided Against the NCAA

This is the detail that matters most for anyone who governs by bylaw. Judge Ken Curry, a retired Tarrant County judge brought in to hear the case in Lubbock, did not rule that the NCAA’s sports-wagering ban itself was unlawful or unfair. He ruled that Sorsby’s attorneys had shown a probable right to relief on three contract-based issues: breach of contract, breach of the duty of good faith and fair dealing, and breach of fiduciary duty. ¹ Curry found Sorsby would suffer “probable, imminent and irreparable injury” without injunctive relief. He granted one accompanied with conditions Sorsby’s own legal team had proposed; that is, he would miss two non-conference games and continue treatment.¹

In short, the NCAA did not lose an argument about whether betting on your own team should end your eligibility. It lost on whether its own bylaws — the same student-athlete well-being and mental-health language nearly every university governing body has adopted over the past five years — created an obligation the NCAA violated when it disciplined him. That is a different and, frankly, a more far-reaching legal issue than simply another antitrust loss.

Why This Rocked the NCAA and the Power 4 Athletic Conferences

The reaction to this ruling was swift and widespread. ACC commissioner Jim Phillips called the ruling a “horrendous pattern” eroding the integrity of the NCAA’s process.² Florida’s athletic director Scott Stricklin drew comparisons to the Black Sox and Pete Rose scandals and said this was “bright line he never thought a court would blur”. ²

Georgia issued a department memo barring its teams from scheduling Texas Tech “until further notice,” and Nebraska’s administration did the same.² Informal talks of a broader Big 12 boycott of Texas Tech followed within days. ²

The ruling also wasn’t an isolated case. A Mississippi court had already ruled an Ole Miss quarterback eligible for a sixth season in February, and an Alabama court briefly cleared a Crimson Tide basketball player to play before a later ruling reversed it. ³

The Sorsby case is the latest local-court injunction in a year to override NCAA eligibility decisions and the first to do it on the one rule the sports industry had treated as sacrosanct. NCAA President Charlie Baker used the moment to renew his call for Congress, via the PCSA of 2026, to give the NCAA enforceable, preemptive authority.³

The Big 12, meanwhile, filed a federal complaint against Texas Tech leadership and warned Texas Attorney General Ken Paxton, who had threatened to sue the conference if it tried to enforce its own bylaws, to stand down. The NCAA moved quickly and sought an emergency stay from the Texas appeals court in Amarillo. ⁴

A veteran ESPN columnist put the broader stakes more bluntly. Dan Wetzel said to get local judges and their temporary injunctions out of the eligibility business entirely, before the next “friendly venue” ruling would do even more damage. ⁵

The Pete Rose Parallel

Major League Baseball’s Rule 21 has been the sport’s third rail since the 1919 Black Sox scandal. If you bet on your own team, the penalty is permanent. There are no exceptions for stature or remorse. Pete Rose, baseball’s all-time hits leader, accepted that permanent ban in 1989 for betting on games he managed, and it stood in place for 36 years and the rest of Rose’s life. He endured multiple denied appeals and was never on a Hall of Fame ballot.

It wasn’t until after Rose died in 2024 that MLB Commissioner Rob Manfred finally revisited the rule. Even then his reinterpretation was highly limited. He stated the ban was a deterrent that only needed to function while the person was alive to feel it. ⁶ Today living players are still held to the original, no-exceptions no-gambling rule.

“...not unlike Pete Rose, but Pete got a lifetime ban.” — Dan Butterly, Big West Conference Commissioner, June 9, 2026³

Compare that to the Sorsby case where an active, admitted, serial violator, by his own account placed thousands of bets and dozens on his own games, was kept eligible by a state court while the violations were still recent and the player was still suiting up.

Baseball needed Rose’s death to even reopen the conversation. College football needed one favorable judge in one county. In my view, that incredible lack of integrity around gambling and possibly even cheating is exactly what every other league with a wagering-integrity rule should be examining now. If a player can successfully get around a wagering ban once, it will be tried against any league whose own rulebook now contains “athlete welfare” language.

Where We Stand Now

The case resolved itself before it reached a full trial. Facing growing backlash and a June 22 deadline to enter the 2026 NFL supplemental draft, Texas Tech told Sorsby on June 15 that he would not play for the Red Raiders this season regardless of the injunction.⁷ Sorsby and Texas Tech mutually parted ways, attorneys filed to dismiss the lawsuit, and Texas Tech said it would not seek to claw back the NIL compensation it had already paid him.⁸ He is now pursuing the supplemental draft instead.

The dollar figures are worth looking at. Sorsby’s NIL contract was reported as fully guaranteed and worth somewhere between $5 million and $6 million for the season. Texas Tech hasn’t disclosed exactly how much of that had already been disbursed.¹⁰ There are strings attached though. As part of the arrangement tied to his ongoing recovery, a university-appointed custodian will oversee his bank account and spending, and Sorsby is required to continue outpatient therapy.¹⁰

That ends Sorsby’s case as a legal threat, but not the exposure it revealed. The underlying contract and fiduciary-duty theory was never tested at trial or on appeal, which means it remains available to the next athlete and the next plaintiff’s attorney.

And the timing could not be more interesting. On Thursday 6/18, the Senate Commerce Committee held its executive session to markup S. 4668, the Protect College Sports Act of 2026 — the Cruz-Cantwell-Schmitt-Coons bill that NCAA leadership has repeatedly pointed to as the fix for exactly this kind of litigation. ⁹ The bill still faces resistance from the SEC and Big Ten over its separate media-pooling provisions and blocking of league expansion. Nothing about its passage before the midterms is assured.

Four Questions Trustees Should Be Asking Right Now

• Does our institution’s or conference’s bylaws language on athlete well-being read as a promise or a value statement? Curry’s ruling turned on whether “we support student-athlete mental health” functions as an enforceable commitment or obligation. University General Counsel should review the language now, not after the next disciplinary dispute.

• If the university disciplined an athlete for a clear rules’ violation, could they sue on the same theory Sorsby’s team used? This is not a hypothetical confined to gambling. Any disciplinary action — academic, conduct, eligibility — is now a candidate for a breach-of-contract claim if your university’s own wellness language can be read as an obligation.

• What conversations have taken place with conference leadership and its member institutions regarding the possible response to the next “friendly venue” injunction? Sorsby is the third local court ruling in a year to override NCAA eligibility decisions. Boards should know in advance, not after the fact, how their conference plans to respond.

• Are we tracking S. 4668 closely enough to know whether it closes this gap? The Protect College Sports Act (PCSA) of 2026 addresses NIL, transfers, and antitrust exposure? Trustees should ask their general counsel directly whether it does anything to foreclose the legal gap that just worked in Texas.

The Bottom Line

This was never really a story about whether Brendan Sorsby deserved compassion for a gambling addiction; he did, and the in-patient treatment he completed reflects that. The story is that a sitting state court, applying ordinary contract law rather than antitrust law, found a path around the one rule American sports has treated as sacred for more than a century. It found that path inside the NCAA’s own governing documents.

Boards and presidents who read this as a college football problem are reading it too narrowly. The vulnerability Curry identified wasn’t in the wagering rule — it was in the institution’s own promises about athlete well-being, sitting quietly in the bylaws, available to be quoted back at the next disciplinary hearing. Trustees who wait to read about the next version of this case in the press, rather than asking their own counsel about it now, are not governing.

Kim Schatzel, Ph.D., is the founder of CEOHigherEd and served as president of Towson University and the University of Louisville. She served on two NCAA Division I Athletic Conference boards, including the ACC. CEOHigherEd publishes practitioner-grounded analysis of higher education governance and leadership for university presidents, provosts, trustees, legislative leaders, and policymakers.

Sources

¹ ESPN. (2026, June 8). Brendan Sorsby granted injunction vs. NCAA, eligible to play in 2026. https://www.espn.com/college-football/story/_/id/49000177/brendan-sorsby-granted-injunction-vs-ncaa-eligible-play-2026

² ESPN. (2026, June 8). Coaches, ADs ‘disgusted,’ ‘stunned’ with Brendan Sorsby ruling. https://www.espn.com/college-football/story/_/id/49003512/coaches-ads-disgusted-stunned-brendan-sorsby-ruling

³ Yahoo Sports. (2026, June 9). Brendan Sorsby ruling: College sports’ brass enraged by Texas judge’s decision. https://sports.yahoo.com/college-football/article/brendan-sorsby-ruling-college-sports-brass-enraged-by-texas-judges-decision--its-fing-bulls-182458230.html

⁴ CNN. (2026, June 16). Sorsby looks to NFL after legal fight with NCAA over his eligibility for gambling. https://www.cnn.com/2026/06/16/sport/sorsby-abandons-ncaa-legal-battle

⁵ ESPN. (2026, June 17). Wetzel: Brendan Sorsby is done with college sports. Can local judges be next? https://www.espn.com/college-football/story/_/id/49084638/brendan-sorsby-texas-tech-eligibility-ncaa-nfl-draft-judge

⁶ MLB.com. (2025, May 13). MLB decision on permanent ineligibility after death impacts Pete Rose, others. https://www.mlb.com/news/mlb-ineligibility-status-after-death-decision

⁷ CBS Sports. (2026, June 15). Texas Tech QB Brendan Sorsby declares for NFL supplemental draft amid NCAA legal battle. https://www.cbssports.com/college-football/news/brendan-sorsby-nfl-supplemental-draft-texas-tech-ncaa-gambling/

⁸ ESPN. (2026, June 16). Source: QB Brendan Sorsby applies to enter NFL supplemental draft. https://www.espn.com/nfl/story/_/id/49077466/texas-tech-transfer-qb-brendan-sorsby-plans-enter-nfl-supplemental-draft

⁹ U.S. Senate Committee on Commerce, Science, & Transportation. (2026, June 11). Chairman Cruz announces markup of Protect College Sports Act. https://www.commerce.senate.gov/press/rep/release/chairman-cruz-announces-markup-of-protect-college-sports-act/

¹⁰ Heavy.com. (2026, June 16). Texas Tech, Cody Campbell suffer big financial hit to close Brendan Sorsby saga. https://heavy.com/sports/college-football/texas-tech-red-raiders/texas-tech-cody-campbell-brendan-sorsby/

The Protect College Sports Act (PCSA) of 2026 is the most serious federal attempt to impose structural order on college athletics since the Sports Broadcasting Act of 1961. The Power 2 conferences, the SEC and Big Ten, came out against the bill the day before its first Senate hearing. Understanding why requires looking past the diplomatic language of their joint statement and identifying the two provisions they are opposed to.

The Bill: What It Actually Does

Introduced by Senate Commerce Committee Chairman Ted Cruz (R-TX) and Ranking Member Maria Cantwell (D-WA) and joined by Senators Eric Schmitt (R-MO) and Chris Coons (D-DE), the 111-page PCSA attempts to address the five central governance issues in college athletics following the House v. NCAA settlement. ¹ It does five things:

1. Codifies the House Settlement

The bill takes the terms of the House v. NCAA settlement, which a federal court approved in 2025 and currently governs how schools pay athletes and writes them directly into federal law. This is important because court settlements expire and can be revisited by judges, but a statute cannot. The $20.5 million annual revenue-sharing cap, which grows roughly 4% per year, becomes a permanent federal ceiling rather than a temporary court order. To enforce it, the bill creates the College Sports Commission (CSC) as the new rulemaking and enforcement body, replacing the NCAA for these purposes and giving it legal protection against antitrust lawsuits. ²

2. Establishes a Federal NIL Framework

The bill creates a single national NIL standard, replacing the current jumble of more than 30 different state laws governing how athletes can earn money from their name, image, and likeness. However, it does not eliminate the impact of state law. Instead, only state laws that directly conflict with the federal rules are impacted. State laws that do not conflict remain fully in effect. This gap provides that litigation may result to determine if any state law is indeed in conflict. Additionally, state contract law and state consumer protection law are expressly preserved; athletes can still sue in state court if an agent, university, or firm breaches a deal. Finally, universities are required to report NIL activity above $600 to the CSC, creating a paper trail that has largely been absent from the current system. ²

3. Establishes Transfer and Eligibility Standards

The bill grants the NCAA antitrust protection to reimpose a one-time transfer rule and establish a five-year eligibility standard. It creates an agent registry capping fees at 5% and bars coaches from departing mid-season or universities from hiring coaches before their season ends. These provisions have broad support. The witnesses at the June 3 Senate Commerce Committee hearing, including former Alabama coach Nick Saban, Notre Dame Athletic Director Pete Bevacqua, West Virginia President Emeritus Gordon Gee, and Pac-12 Commissioner Teresa Gould, largely endorsed them. The ACC’s Jim Phillips and the Big 12’s Brett Yormark expressed public support for the bill.³

4. Opens Collective Media Rights Negotiation

This is the first of the two provisions the Power 2 oppose. The bill amends the Sports Broadcasting Act of 1961 to permit FBS institutions to voluntarily form a structure to pool and collectively negotiate their media rights, provided 75% of FBS schools participate. The antitrust exemption mirrors what the NFL, NBA, and NHL already operate under. Revenue allocation under any pooled structure must guarantee each participating member a minimum allocation exceeding its current media rights revenues.⁴

The ACC and Big 12 support this provision because it substantially improves their position. They would get a guaranteed minimum above their current revenue and participation in a pooled negotiating structure with far greater leverage than either conference has now. The SEC and Big Ten oppose it for the same reason. Their individual media deals, the SEC’s $3+ billion arrangement and the Big Ten’s comparable CBS/Fox/NBC/Peacock structure, were negotiated individually and reflect the SEC and Big Ten’s current market advantage. Pooling media rights would shrink that advantage.

5. Prohibits Super League Consolidation

This is the second provision the Power 2 oppose. The bill explicitly bars any conference reporting more than $1 billion in FY2025 revenues from merging with, consolidating with, or acquiring another conference’s assets, media rights, or membership. Cruz stated at the hearing that the intent is to prevent the SEC and Big Ten from breaking away to form a closed super league. The provision is also a direct response to the addition of USC, UCLA, Oregon, and Washington to the Big Ten, and Texas and Oklahoma to the SEC. ⁴

The Power 2 Opposition: Reading the Joint Statement

The Big Ten and SEC released a joint statement the day before the June 3 hearing that was the Senate Commerce Committee’s first examination of the bill. The statement serves to demonstrate their engagement while preserving maximum room to oppose:

As discussed previously, their concern about state law preemption and litigation risk are not without merit. But the consensus is the reason the Power 2 issued a coordinated opposition statement are the media rights and anti-consolidation provisions.⁴

After a June 4 meeting with Cruz, the two conferences issued a follow-up statement that praised provisions supporting student-athlete wellness and agent regulation—provisions that cost them nothing—and reiterated opposition to the bill in its current form. ⁶

The Governance Framework

When the two most resourced conferences in American higher education respond to bipartisan reform legislation by issuing coordinated opposition statements and lobbying the committee chairman to protect their television contract leverage, that is a governance story, not a sports story. The boards of member institutions need to be engaged with it. Most are not.

I served on two NCAA Division I Athletic Conference Boards during periods of significant membership and revenue restructuring, including on the ACC board during the period when Clemson and Florida State were pursuing legal challenges tied to revenue distribution. The pattern is consistent; conferences negotiate these decisions at the commissioner level, involve member institutions after much of the negotiation has advanced, and, frankly, discourage engagement of member university trustees. The PSCA, if passed, would fundamentally restructure that governance process by establishing federal standards that supersede conference-level decision-making on media rights and consolidation.

The Wider Coalition Problem

Cruz and Cantwell face opposition that extends beyond the Power 2. The Congressional Black Caucus has raised concerns. Senators Chris Murphy (D-CT) and Cory Booker (D-NJ) have expressed skepticism. Republican Bernie Moreno (R-OH) released a statement after the June 3 hearing refusing to support any bill that does not address transgender sports. This is a separate policy dispute the bill does not speak to. ⁷

The U.S. Olympic and Paralympic Committee (USOPC) submitted a letter to lawmakers pointing out that Women’s and Olympic sports protections are contingent on sufficient participation in the media rights pooling structure. If the 75% FBS threshold is not reached, those protections do not trigger. ⁸

The real question is whether continued litigation uncertainty, a jumble of state NIL laws, and a contestable House settlement better serve universities vs. an imperfect federal framework.

What Comes Next: The Markup Question

Cruz indicated at the June 3 hearing that he intends to move the bill, at a swift pace, to a markup session where committee members propose amendments. ⁵ As of this writing, no formal markup date has been announced.

Three scenarios are worth tracking for trustees and boards:

Scenario A: The bill advances largely intact.

The Power 2 lose the media rights and anti-consolidation fights. This is the scenario in which trustees at SEC and Big Ten institutions face the most immediate governance adjustment as their conferences’ strategic options narrow and their revenue projections change.

Scenario B: Targeted amendments weaken the Power 2 provisions.

We could see the 75% pooling threshold moves higher, the anti-consolidation revenue number get larger, or the revenue-sharing formula change. The ACC and Big 12 could also receive less. All this give the Power 2 broader options. This is, in my mind, the most likely outcome of extended negotiation.

Scenario C: The bill stalls.

If the bill stalls, the House settlement continues as guidance for conferences and universities, litigation uncertainty continues, and the Power 2 retain much leverage. For non-Power-2 institutions, this is the worst outcome.

Four Questions Trustees Should Be Asking Right Now

Has your institution modeled the revenue scenarios under each legislative outcome? If the media rights pooling provision passes, what does your institution receive under the guaranteed minimum formula versus your current conference distribution? If it does not pass, what does your institution’s revenue forecast look like relative to Power 2 institutions over the next five years? These are board-level financial questions not just athletic department concerns.

Do you know your institution’s contingent liabilities under the House settlement, and how do they change under this bill? The PCSA codifies the House settlement and extends the revenue-sharing cap post-settlement. If your institution is currently funding House obligations through student fees, auxiliary revenues, or institutional transfers, then the board might determine those future liabilities should be modeled and reviewed.

What is your conference’s formal position on the bill, and who communicates it to your board? The SEC and Big Ten’s joint opposition statement was issued by their commissioners. Trustees of member institutions learned about it from press coverage. Trustees have the right and responsibility to understand how their conference is engaging on legislation that will significantly affect their institution’s revenue, competitive position, and legal exposure.

Does your board have a clear understanding of how the antitrust exemption in the bill changes your institution’s litigation exposure? The bill provides antitrust protection to the NCAA and College Sports Commission to enforce transfer rules, eligibility standards, and the compensation cap. That is a significant change. Trustees should understand what protections they might gain and what liabilities they might retain if the PCSA passes and in what final form.

The Bottom Line

The Protect College Sports Act (PCSA) is not perfect legislation. The conditional trigger structure for Women’s and Olympic sports protection is problematic. The transfer restrictions are a tough outcome for student-athletes who spent five years winning transfer rights in court.

However, in my opinion, the Power 2 resistance is not an objection to such detailed items. It is a defense of their current strategic advantage. As previously stated, When the two most resourced conferences in American higher education respond to bipartisan reform legislation by issuing coordinated opposition statements and lobbying the committee chairman to protect their television contract leverage, it is high-level strategy.

Trustees who govern institutions with DI sports programs are watching, in real time, one of the most consequential federal interventions in higher education since Title IX. It is imperative that boards are highly engaged with it and not simply waiting to read about it after it is completed.

Kim Schatzel, Ph.D., is the founder of CEOHigherEd and served as president of Towson University and the University of Louisville. She served on two NCAA Division I Athletic Conference boards, including the ACC. CEOHigherEd publishes practitioner-grounded analysis of higher education governance and leadership for university presidents, provosts, trustees, legislative leaders, and policymakers.

Sources

¹ The Hill. (2026, May 29). Senators unveil ‘Protect College Sports Act’ as calls for reform grow. https://thehill.com/policy/keeping-score/5897555-protect-college-sports-act-unveiled/

² CBS Sports. (2026, May 28). Bipartisan ‘Protect College Sports Act’ proposes salary cap for players, antitrust protection, NIL regulation. https://www.cbssports.com/college-football/news/college-sports-ted-cruz-maria-cantwell-bill-salary-cap-antitrust-protection-ncaa/

³ The Hill. (2026, June 3). Ted Cruz, Maria Cantwell bill to overhaul NCAA college sports gets Nick Saban backing. https://thehill.com/homenews/senate/5908439-cruz-cantwell-ncaa-overhaul/

⁴ Atlanta Journal-Constitution. (2026, June 3). SEC, Big Ten jointly announce opposition to Protect College Sports Act. https://www.ajc.com/sports/2026/06/sec-big-ten-jointly-announce-opposition-to-protect-college-sports-act/

⁵ Roll Call. (2026, June 3). Senators urge quick action to halt college sports decay. https://rollcall.com/2026/06/03/senators-urge-quick-action-to-halt-college-sports-decay/

⁶ CBS Sports. (2026, June 4). With the Protect College Sports bill finally in hand, SEC leaders are discussing contingencies. https://www.cbssports.com/college-football/news/protect-college-sports-sec-contingencies/

⁷ Sportico. (2026, June 3). Protect College Sports Act Hearing Testifies to Misplaced Priorities. https://www.sportico.com/leagues/college-sports/2026/protect-college-sports-act-hearing-1234902212/

⁸ CBS Sports. (2026, June 3). Protect College Sports Act: Nick Saban, leaders back NIL reform before Congress. https://www.cbssports.com/college-football/news/protect-college-sports-act-nick-saban-congress-nil-reform/

⁹ CBS Sports. (2026, May 28). Key senators strike bipartisan deal on sweeping college sports reform with transfer, eligibility and cap enforcement. https://www.cbssports.com/college-football/news/key-senators-strike-bipartisan-deal-on-sweeping-college-sports-reform/

¹⁰ NBC Sports. (2026, June 3). Senate hearing on “Protect College Sports Act” didn’t plow much new ground. https://www.nbcsports.com/nfl/profootballtalk/rumor-mill/news/senate-hearing-on-protect-college-sports-act-didnt-plow-much-new-ground

Universities are writing checks directly to student-athletes. At Power 4 schools, a starting quarterback may now receive more than $1 million annually from his institution alone. Yet under current law, he is not an employee. That legal gap is one of the most consequential unsettled questions in higher education governance. This week’s newsletter covers: 1) how student-athletes are compensated, 2) how those payments are legally classified, and 3) the institutional risks trustees need to understand.

How Athletes Get Paid: Three Channels

1. Revenue-Sharing — Money Directly from the School

Created by the House v. NCAA settlement (June 2025), this channel allows universities to pay student-athletes directly for the first time. The cap is $20.5 million per school in 2025–26, rising ~4% annually to roughly $33 million by the mid-2030s. Distribution is heavily concentrated. Football and men’s basketball capture ~90% of the pool at most Power 4 schools. Football alone taking ~65% of the pool, men’s basketball ~20%, women’s basketball ~7%, and all other sports sharing the remaining 8%. ¹ ² Within a sport, payments vary by position and the student-athlete’s estimated market value. Duke reportedly committed $8 million to a quarterback over two years; Michigan reportedly committed $10 million to a quarterback over four years. Players who see limited playing time may receive little or nothing from the pool. ³

2. NIL — Money from Third Parties

Since the July 2021 NCAA v. Alston ruling, athletes can earn commercial income through endorsement deals, sponsorships, content agreements, and appearances. Payments to the student-athlete are made by companies or booster-funded NIL collectives, not by the university. The 2025 House v. NCAA settlement also stated that deals valued above $600 must be reviewed and approved by the College Sports Commission’s centralized monitoring and disclosure platform called NIL Go. There are two necessary criteria for approval: the deal must have a valid business purpose and be valued at a fair market price. ⁴

3. Athletic Scholarship and Educational Benefits

Full scholarships cover tuition, room, board, and fees. The cost-of-attendance (COA) stipend bridges the gap to actual living costs (e.g., transportation home, books and supplies, etc.) The combined total can approach $90,000 annually. The House settlement did not eliminate these benefits; instead, revenue-sharing is layered on top of them. ⁷

What Is the Payment, Legally?

Revenue-sharing payments are classified as royalties. The House v. NCAA settlement does not resolve whether college athletes are employees; instead, it creates a direct payment system that leaves that question still open. ⁵ Due to that ambiguity and to avoid triggering employment law, universities are structuring revenue-sharing as a licensing arrangement. The student-athlete grants the university the right to use their name, image, and likeness in connection with media broadcasts, ticket sales, and sponsorships. In response, the university pays the student-athlete a share of the revenue those activities generate. The university issues a Form 1099-MISC rather than a W-2, treating the athlete as a non-employee licensor. The athlete owes income tax on royalty income but is not subject to FICA withholding by the institution.⁶

However, this classification is currently being legally challenged. The most significant is Johnson v. NCAA, a federal labor lawsuit filed by former college athletes that is currently back in federal district court. The case argues that the Fair Labor Standards Act requires universities to treat student-athletes as employees based on the level of institutional control over their daily schedules, conduct, and physical activities. A second challenge involves state-level employment claims in California and Washington, where labor laws have a higher bar than federal standards and where the final ruling could impact universities in those states independently of any federal ruling. ⁹

Third-party NIL payments are classified as self-employment income. When an athlete signs an endorsement deal, content agreement, or appearance contract with a company or collective, that income is not paid by the university. It flows directly from the third party to the athlete. The paying entity issues a Form 1099-NEC (Non-employee Compensation) for amounts above $600. The athlete is treated as an independent contractor and is responsible for both income tax and self-employment tax (15.3% on net earnings). The institution is not a party to the transaction and does not withhold. That legal separation is significant; but, as discussed in the risks section, it does not fully insulate the university when third-party NIL deals ⁴

The tax treatment of scholarships and COA stipends is more unclear. The tuition portion of an athletic scholarship has always been tax-free. A 1977 IRS ruling extended that treatment to cover room and board as well. At the time, the rationale was those athletic scholarships, including room and board, were not revocable if a player got injured or quit the team. That ruling is still on the books and most universities still follow it, treating the full scholarship as tax-free. 8

However, the COA stipend could be more at risk. Unlike the full scholarship, the COA is a cash payment directly to the student-athlete. The IRS has never updated its 1977 guidance to address the COA stipend. It also has never addressed the new revenue-sharing payments either. ⁸

The employment-status question impacts all three of these channels. As discussed above, Johnson v. NCAA argues that the Fair Labor Standards Act requires the NCAA and member universities to classify student-athletes as employees based on the degree of institutional control over their behavior. If the case proceeds to trial and the student-athletes win, the royalty and independent-contractor classifications for the payments would be eliminated and the student athletes treated as university employees. A hearing date has not been set; resolution before 2027 is unlikely. ⁹

The Risks Trustees Should Understand

Employment Reclassification Risk. If Johnson v. NCAA finds that athletes are employees under federal law, the consequences are significant and serious (e.g., minimum wage eligibility, overtime requirements, workers’ compensation eligibility, unemployment insurance, tax withholding, and potentially collective bargaining rights). Most institutions have not discussed this with independent legal counsel or modeled these costs. ¹⁰

Title IX Risk. The House settlement imposes no distribution requirement across men’s and women’s sports. With football and men’s basketball getting ~90% of the revenue- sharing pool, Title IX exposure is indeed possible. Biden administration guidance applying Title IX to all athlete compensation was rescinded in February 2025; however, no replacement guidance has been issued. ¹¹

Financial Sustainability Risk. At the full cap, athlete compensation can now exceed the budgets of many academic departments and schools. Several universities have already raised athletic fees to fund student-athlete pay (e.g., Clemson, South Carolina). Schools that commit and cannot sustain it could face recruiting risk and reputational damage. ¹²

Third-Party NIL Risk. Universities have little direct control over the third-party NIL marketplace, but they carry real institutional exposure from two risks. First, the College Sports Commission’s NIL Go clearinghouse does not effectively eliminate booster- driven pay-for-play. Collectives have often adapted and restructured payments as content deals or appearance fees that barely satisfy the “valid business purpose” standard. If those deals are challenged by NIL Go, the university’s compliance program and its coaches’ attestations will be considered. Institutions without NIL compliance review independent of the athletic department could be exposed. ¹³ Second, the organizational barrier between third-party NIL and institutional recruitment might be compromised. If booster collectives structure transfer portal offers as NIL packages contingent on signing, such arrangements risk being considered signing bonuses. 14

Five Questions Trustees Should Ask

1. What is our revenue-sharing allocation methodology, and has legal counsel formally reviewed it for Title IX compliance? With 90% of payments flowing to football and men’s basketball and federal guidance in flux, trustees should have a formal legal opinion and continue being briefed on any possible changes to guidance.

2. Have we assessed the full financial exposure if student-athletes are reclassified as employees? Johnson v. NCAA is yet unresolved. Has the board analyzed the scenario in which the case is successful, and its implications for the school’s budget model? Just as House v. NCAA brought serious funding outcomes for universities, the lawsuit brought by former collegiate players could have consequences at an even larger monetary scale.

3. What is the 10-year trajectory of our total athlete compensation commitment, and how is it funded? The cap escalates to ~$33 million by the mid-2030s; institutions funding it through tuition increases or budget reallocations are making decade-long structural commitments the full board should review.

4. Is our NIL compliance function independent of the athletic department, and does it have authority to reject deals? NIL Go requires institutional attestation on every submitted deal. If that sign-off runs through the athletic department - the unit with recruiting incentives to approve - the institution’s exposure is real.

5. Does our written NIL policy accurately reflect how NIL is being used in recruitment? Trustees should ask for a candid legal assessment of actual practice, not a recap of policy.

The Bottom Line

College athletes in high-revenue sports are now compensated through three simultaneous channels: direct revenue-sharing from the institution, third-party NIL deals, and scholarships with cost-of-attendance stipends. The combined value at Power 4 programs can exceed $1 million annually for a student-athlete. None of it, under current law, makes them an employee.

Employment reclassification, Title IX distribution, financial sustainability, and NIL compliance integrity are not separate legal questions. They are interconnected governance issues that may compound on each other. How trustees govern these matters may shape an institution's exposure for the next ten years.

For trustees, this is not a sports administration matter. It is a financial, legal, and governance matter — one that belongs in the boardroom, not delegated to the athletics department.

Sources

¹ Associated Press, “NCAA Settlement Takes Effect, Ushering in Direct Pay Era for

College Athletes,” July 1, 2025.

² Wall Street Journal, “College Sports’ New Pay Structure Concentrates Money in

Football and Basketball,” August 2025.

³ ESPN, “How Much Are College Football’s Top Players Actually Getting Paid?,”

October 2025.

⁴ Wall Street Journal, “NCAA’s New NIL Clearinghouse Sets Rules for Athlete

Endorsement Deals,” July 2025.

⁵ New York Times, “Judge Approves Landmark NCAA Settlement, Clearing Way for

Direct Payments to Athletes,” June 6, 2025.

⁶ Wall Street Journal, “Colleges Pay Athletes as Royalties, Not Wages — A Legal

Distinction That May Not Hold,” August 2025; Associated Press.

⁷ New York Times, “College Athletes to Receive Cost-of-Living Stipends Under New

NCAA Rules,” August 2015.

⁸ Wall Street Journal, “The Tax Complications of Paying College Athletes,” October

2025.

⁹ Wall Street Journal, “The Legal Fight Over Whether College Athletes Are Employees

Is Heating Up,” April 2026.

¹⁰ New York Times, “If College Athletes Become Employees, the Cost to Universities

Could Be Staggering,” March 2025.

¹¹ New York Times, “Trump Administration Rescinds Title IX Guidance on College

Athlete Pay,” February 2025.

¹² Wall Street Journal, “Some Universities Are Raising Student Fees to Pay Athletes,”

September 2025.

¹³ Wall Street Journal, “College Boosters Are Still Finding Ways Around the New NIL

Rules,” November 2025.

¹ 4 Washington Post, “The Blurring Line Between Booster NIL and Illegal Recruiting,”

March 2026.

What Conference Revenue Data Tells Us About the Future of College Athletics.

The numbers are in, and they are BIG. Not just in scale but what they signal about the future of collegiate athletics conferences and collegiate athletics. This past week, the Power 4 conferences completed their FY 2025 revenue reporting. Those revenue numbers provided further evidence of the growing “have and have not” stratification that governance reform, Congressional action, and outcomes of an NCAA working group are simply not capable of reversing. Trustees who are not actively working through these numbers and what they mean for the future of their university’s athletic programs are falling far short in their fiduciary and governance duties.

The Revenue Landscape: A Tiered System in Plain Sight

The Big Ten now sits at the zenith of college athletics finance. The conference announced a record $1.37 billion distribution to its 18 member institutions for FY 2025 — a $490 million or 56% increase over the prior year. This massive revenue gain is the direct result of the first full season under a groundbreaking $7 billion media rights deal with Fox, CBS, and NBC.¹ The average per-school distribution came in at $76.1 million, with Ohio State, which won the College Football Playoff, receiving $91.6 million and Penn State, a CFP semifinalist, getting $88.9 million. ²

The SEC is not far behind. The conference distributed a record $1.1 billion across its 16 members for FY 2025, driven by the first full year of its exclusive $3 billion deal with ESPN. The 14 legacy members averaged $72.4 million, an $18.6 million or 36% increase from the prior year. ³

The Big Ten and the SEC now occupy, in my mind, a separate and distinct financial tier from all other Division I athletics conferences. Together they distributed nearly $2.5 billion to their members in FY 2025. WOW!

The ACC and Big 12 are, in comparison, lagging. The ACC reported $826.5 million in total revenue for FY 2025, with most full members receiving at least $42.8 million. However, Notre Dame, Cal, Stanford, and SMU each received between $17 million and $23 million under their tiered entry and membership agreements. Clemson led ACC distributions at $55.1 million. ⁴

The Big 12, trailing in fourth place among the Power 4, earned $610.9 million in total conference revenue for FY 2025. It distributed an average of $39.5 million per full-share member. ⁵

The gap between the Big Ten/SEC tier and the Big 12 is very significant. For example, Mississippi State, not considered a top tier flagship, received $72.4 million from the SEC in FY 2025. Utah received $37.9 million from the Big 12. Extrapolate those numbers over the next four years and the $34.5 million annual per-university gap compounds to a $138 million cumulative revenue differential. This is all before accounting for CFP revenue distributions, where a new model beginning in 2026 will further advantage conference champions and deep playoff runs. ⁶

Then there are the conferences below the Power 4. Mountain West schools average operating revenue of approximately $22 million per university. ⁷ MAC members average closer to $10 million. ⁸ Let’s consider the $20.5 million revenue share cap included in the recently announced Protect College Sports Act (PCSA) of 2026 as a backdrop to these numbers. It tells us for non-Power 4 universities, the $20.5 million is not an upper limit, but instead an aspirational number they cannot reach.

The table above is the operating reality that every athletic director walks into each week. A MAC school attempting to recruit against a Big Ten program is competing against a highly stacked deck.

The Big Ten/SEC Paradox: Record Revenue, Record Losses

Here is the number that does not make the press releases; The same conferences posting billion-dollar revenue milestones are also posting very large operating losses.

Big Ten athletic departments averaged over $48 million in net operating losses per school in fiscal 2025 — and that figure was calculated before the House settlement added $20.5 million in new revenue-sharing costs beginning July 1, 2025.⁹ For programs on the low end of the revenue scale of the Big Ten (e.g., Rutgers or Washington which receives only a partial media share through 2030) — the projected net operating loss for the current fiscal year approaches $100 million per university.¹⁰

Big 12 programs tell a similar story. Average net operating losses were over $57 million per school in fiscal 2025, again, before revenue sharing obligations. Those losses are covered by booster donor contributions averaging $35 million per school, institutional subsidies directly from the university, and student fees averaging another $23 million. ¹¹

This is the paradox at the center of Power 4 athletics finance. That is, the more revenue flows in, the more costs expand to absorb and exceed it. Coaching salaries, facility arms races, roster spending, and now direct athlete compensation have each inflated to levels that blow past any new revenue the conferences can generate. The result is that the programs receiving the largest conference distributions are also, in many cases, the programs running the largest deficits. The money is not accumulating. It is being spent — and then some — as the collective gluttony of collegiate athletics continues.

For trustees, this is the fundamental accountability question. A board that approves an athletics budget showing $80 million in conference revenue without also examining the $130 million in total expenditures — and the gap that institutional subsidy, student fees, and donor contributions are being asked to fill — is not exercising meaningful oversight. It is ratifying a financial model with a structural deficit and no plan to address or resolve it.

NIL and the Cost of Staying Competitive

Layer the House settlement’s revenue-sharing requirements on top of this conference revenue and operating loss picture, and the fiscal pressure becomes even more acute.

Beginning July 1, 2025, Power 4 institutions began directly compensating student-athletes under the House v. NCAA framework, with a Year 1 cap of $20.5 million per school. A figure, even if the Cruz-Cantwell Protect College Sports Act (PCSA) passes, that will increase by at least 4% annually over the 10-year settlement term. ¹² Every Big Ten and SEC school has committed to funding at the full cap level. Most of those dollars — roughly 90% at most programs — flow to football and men’s basketball. ¹³

But the cap is not the ceiling of competitive spending. It is the floor. The College Sports Commission, the enforcement entity stood up by the power conferences under the settlement framework and included as the compliance enforcement body under the PCSA, is already conducting investigations into unreported or non-compliant third-party NIL arrangements — deals structured to function as pay-for-play while nominally qualifying as name, image, and likeness activation.¹⁴ The consensus among coaches and general managers operating in this market is direct: a roster budget of $25 million or more is what national championship contention actually requires, once legitimate third-party NIL is layered on top of institutional revenue sharing.¹⁵ Programs that cap at $20.5 million and hold the line are already behind.

I am aware of at least one institution — a program with legitimate national aspirations — where the internal conversations have shifted from “how do we build the best team” to “how do we stay within the rules while everyone around us is finding the edges.” That is not a sustainable governance posture, and it is not unique.

The bottom line is that many Division I athletic programs are not financially self-sustaining enterprises. They already have student fees, donor dollars, and institutional subsidies propping up this model. Just as there was a call nationally to regain public trust in higher ed and address its cost, look at the number of DI schools that increased student fees to support athletics (e.g., Clemson, South Carolina, Minnesota).

The subsidy required to remain competitive is rising faster than almost any other cost center in higher education. Yes, read that again. The single largest cost inflator at many universities is not health care, utilities, faculty salaries, or administrative bloat. It is the cost of athletics bleeding into the university itself.

What This Means for Governance

The financial unraveling happening across collegiate athletics follows a pattern I am all too familiar with from other industry sectors. The same management and governance mistakes that brought down companies like Enron, Sears, Toys R Us, Kodak, and Spirit Airlines have been taught in every MBA strategy class. Those same approaches are taking root at universities and conferences. Off-balance sheet liabilities neither discussed nor disclosed to the board, governance structures that provide less oversight to new ventures, athletic debt accumulating, losses that are structural without an action plan for resolution. In all the corporate cases the warning signs were visible for years but ignored by the board. Or, as is often the case, management and the board “kicked the can down the road.”

Often the answer given by athletic directors when queried about their growing spending or their creation of joint ventures to house athletics business operations (e.g., ticket sales, NIL, media contracts, sponsorships) with external partners: “Well, everyone is doing it. We need to do it to stay competitive”.

The “competitive necessity” defense to justify structural deficits and create external business operations is not unique. It is one of the oldest and most predicable patterns resulting in catastrophic outcomes for entire business sectors. For example, deregulation in the early 1980’s allowed Savings and Loan financial institutions to engage in increasingly risky investments, including commercial real estate that previously had been prohibited. It is the same logic you hear today from athletic directors – everyone is doing it so we must too. This herd mentality resulted in more than 1000 S&Ls failing, costing taxpayers over $132 billion, and reshaping regulation yet again. Other similar industry defaults include the telecom industry during the late 1990s and, one I am very familiar with, the automotive industry bailouts and bankruptcy of GM and Chrysler in 2008-2009. As with the current environment in collegiate athletics, competitive pressure is used as an excuse for accumulation of increasing risk.

But what makes the higher education version of this even more disconcerting is the public nature of many of these universities. Public universities steward public assets and funding sources and must uphold trust in the management of those resources.

Five Questions Trustees Should Be Asking:

• What is our actual all-in athletics cost — and what does it buy us competitively?

Conference distribution, revenue sharing obligations, NIL collectives, operating subsidies, and institutional support need to be presented as a consolidated figure. Boards should know whether the total investment is producing competitive outcomes proportionate to its cost, and whether the institution has a clear-eyed view of the tier it is realistically competing in.

• What is our revenue sharing strategy, and who approved it?

The House settlement gives institutions discretion on how to allocate up to $20.5 million in direct athlete compensation. Decisions about which sports receive what share, and how that distribution aligns with Title IX obligations, carry significant legal and reputational exposure. Boards should confirm that those decisions have received appropriate legal review and board-level visibility — not just athletic department sign-off.

• How are we monitoring third-party NIL compliance, and what is our exposure if we are wrong?

The College Sports Commission has signaled that enforcement is active, not theoretical. Boards need to understand their institution’s NIL infrastructure: what deals are being reported, how activation requirements are being verified, and what the institutional liability posture is if an arrangement is later found non-compliant. “We rely on the athletics department to handle that” is not a sufficient answer at the board level.

• Does our conference affiliation still match our institutional mission and financial capacity. If not, what is our plan?

The revenue gap between conference tiers is no longer a matter of degree. It is a matter of competitive category. Boards of institutions in the Big 12, ACC, or below who have not recently revisited the alignment between their competitive ambitions, their conference economics, and their institutional financial capacity are overdue for that conversation. Conference affiliation is now a strategic and intentional institutional decision, not an inherited condition.

• Have we reviewed every LLC or other legal structure created to house athletics business operations — and does the board retain meaningful oversight if a private equity firm or outside partner is involved?

The use of LLCs, joint ventures, and special-purpose entities to house multimedia rights deals, venue operations, real estate, and NIL infrastructure has become more frequent for high-revenue athletics programs. These structures can shift material financial activity off the institution’s balance sheet and outside the normal audit scope. When a private equity firm or other outside investor holds an equity stake, the governing agreement may include non-disclosure provisions, preferential control rights, or information restrictions that effectively limit board visibility into the entity’s finances and obligations. Boards must require full disclosure of any such structure and its financial relationship to the institution, ensure that independent counsel — not athletic department or university counsel has reviewed any terms involving outside equity, and confirm that no arrangement restricts the board’s ability to exercise its fiduciary responsibilities. A deal structure that limits what the board can see or approve is a governance failure waiting to happen.

Sources

¹ CBS Sports, “Big Ten to distribute historic $1.37 billion in revenue to its 18 members for 2025 fiscal year,” May 2026.

² Ibid.

³ USA Today / AOL Sports, “SEC financial boom brings revenue to $1.1 billion,” February 2026.

⁴ Sports Illustrated, “The Power 4 Conferences Reveal Revenue Figures for 2025,” May 2026.

⁵ Press Democrat / On3, “Big 12 spring meetings financial report,” May 2026.

⁶ Ibid.

⁷ NCAA Revenue Sharing & NIL Estimates, Mountain West Schools, nil-ncaa.com, 2025.

⁸ NCAA Revenue Sharing & NIL Estimates, Mid-American Conference Schools, nil-ncaa.com, 2025.

⁹ NCAA Revenue Sharing & NIL Estimates, Big Ten Schools, nil-ncaa.com, 2025.

¹⁰ Ibid.

¹¹ NCAA Revenue Sharing & NIL Estimates, Big 12 Schools, nil-ncaa.com, 2025.

¹² Yahoo Sports / CBS Sports, House v. NCAA settlement coverage, June–July 2025.

¹³ Penn State NCAA financial reporting, as analyzed by nil-ncaa.com, 2025.

¹⁴ ESPN, “Commission rejected 500-plus NIL deals worth nearly $15 million”, January 2026.

¹⁵ 247Sports, “College Football Transfer Portal 2026: Key rule changes, NIL money battles,” December 2025.

Collegiate athletics has long operated in a “gray area” between academic mission and commercial entertainment. The arrival of private equity — with its intense focus on returns, its demand for efficiency, and its iconoclastic approach to tradition — may finally force a reckoning with what collegiate sports actually are, and who they are for. This week’s newsletter examines the landmark Big 12 deal with RedBird Capital, the wave of schools opting out, and the bigger questions about private equity (PE) now confronting presidents and governing boards at universities with D-1 athletics.

Section 1 : The Financial Crisis Driving Private Capital Into College Sports

The financial foundations of college athletics are under unprecedented strain. The 16 schools of the Big 12 Conference averaged approximately $131.7 million in operating expenses in 2025, with average annual operating losses of approximately $57.4 million per school — a rise of nearly $9 million compared to the previous year.(1)

Those losses are typically offset by donor contributions, university support, and student fees. But the underlying economics are getting harder to ignore. The June 2025 approval of the House v. NCAA settlement introduced a $20.5 million annual revenue-sharing obligation that schools must pay — an expense that arrived, for almost all universities, without a proportional revenue increase.(2,3)

An Enrollment Cliff Compounds the Pressure

The financial pressures extend well beyond athletics. A demographic shift is impacting higher education: enrollment is projected to fall by roughly 15 percent for Americans of typical college age between 2025 and 2039 — a direct consequence of declining birth rates following the 2008 Great Recession.(4)

These converging forces — rising athlete costs, enrollment decline, restricted grant funding, and coaching salary inflation — have sent university administrators looking for new revenue sources. Private equity has emerged as a controversial but increasingly feasible option.(4,5)

“The traditional financial model for college athletics is no longer sustainable or consistent with the university’s mission to serve students and supporters.”

— University of Utah administrators, December 2025

Section 2 : A Landmark Deal: The Big 12, RedBird Capital & Weatherford Capital

In late April 2026, the Big 12 Conference became the first major college athletic conference in the United States to finalize a league-wide private equity partnership — a five-year agreement with RedBird Capital Partners and Weatherford Capital, executed through their jointly managed platform, Collegiate Athletic Solutions (CAS).(6,7)

How the Deal Was Structured

The partnership has three primary components: 1) a direct $12.5 million investment into the Big 12 conference itself, to be invested in league operations and infrastructure; 2) a commercial partnership with Redbird’s in-house sales arm - Redbird Development Group - has already signed 2 major sponsors on behalf of the Big 12 generating ~$100 million in new revenue to be distributed to the member universities; and 3) Each of the 16 member universities may opt into a $30 million credit line. The credit would be repaid by withholding a portion of each university’s annual Big 12 revenue distribution (8,9)

Structure Avoids Equity Stakes — By Design

Notably, neither the Big 12 nor its member schools are selling ownership stakes. The arrangement is structured as a lending and commercial partnership, not a traditional equity deal. This was almost certainly intentional: 13 of the 16 Big 12 schools are public universities, and the sale of equity in a public institution to a private firm could be contrary to university charters, state enabling statutes, and broader public accountability frameworks.(10)

Section 3 — The Opt-Out Wave: Schools Say No to $30 Million

In a telling move about how member schools view the deal, the overwhelming majority of Big 12 universities have decided to decline the optional $30 million credit line.(11,12)

Schools That Have Declined

As of May 2026, thirteen of the sixteen Big 12 member schools have publicly confirmed they will decline the credit line: Texas Tech, Iowa State, Colorado, Kansas State, Arizona, UCF, Cincinnati, Oklahoma State, Baylor, Houston, TCU, BYU, and West Virginia. Nearly every school framed its decision in terms of financial caution rather than opposition to the broader partnership, and most noted the option remains available for another year. Kansas has not yet announced a decision. As of this publication, no school has confirmed it is accepting the credit offer.(11,12)

Why Schools Are Walking Away From $30 Million

The credit option comes with a reported double-digit interest rate of 10%.12 That financial impact, combined with the reputational and governance concerns around PE involvement, makes the credit unattractive to schools that aren’t in immediate financial distress.(13)

“As of right now, that’s something that Oklahoma State will not do at this point. Should we need something like that, we believe that we’ll probably have other avenues or levers that we can pull first.”

— Chad Weiberg, Oklahoma State Athletic Director

RedBird has pushed back on the narrative that the opt-outs represent a failure, emphasizing that the commercial partnership — not the credit lines — is the central point of the deal. Schools have one year to opt in, and RedBird has indicated the offer will remain available beyond that window.(14)

Section 4 — Broader Implications & Congressional Concerns

The Big 12 deal is the first of its kind, but it is unlikely to be the last. Across collegiate athletics, conferences and individual universities are exploring private capital as a solution to the revenue gap they are facing. However, these deals and the possible partnerships with PE have drawn scrutiny from lawmakers on both sides of the aisle.(3,15)

Legislative Pushback

Senator Maria Cantwell (D-WA), Ranking Member of the Senate Commerce Committee, which holds jurisdiction over collegiate athletics, has emerged as the most active member of Congress scrutinizing private equity in college sports. In October 2025, Cantwell wrote directly to Big Ten Conference presidents, warning that the conference’s proposed $2.4 billion PE arrangement “may be counter to your university’s academic goals, may require the sale of university assets to a private investor, and may affect the tax-exempt purpose of those assets.”(16,17,18)

The following month, she formally requested that Congress’s Joint Committee on Taxation examine whether college athletics should continue to receive tax-exempt treatment. Her written request stated that “given the evolving market dynamics of college sports coupled with changes in the legal framework affecting college athletes, legitimate questions have been raised about whether it is time to rethink the tax-exempt regime under which college sports currently operates.”(19)

If the Joint Committee on Taxation concludes that PE partnerships revenue structures are not compatible with a tax-exempt treatment, deals like the Big 12’s RedBird arrangement could require major restructuring.

In March 2026, Cantwell joined Senator Eric Schmitt (R-MO) in releasing the College Sports Competitive Act, a bipartisan discussion draft that would amend the Sports Broadcasting Act to allow colleges and conferences to pool and jointly sell their media rights. Analysts have estimated the change could generate more than $9 billion in new revenue for college sports. The bill also would establish a 14-member oversight board and build in distribution requirements intended to protect women’s and Olympic sports programs.(20,21)

The bill’s impact on the private equity debate is significant. If enacted, the bill would substantially improve the financial position of athletic programs and, potentially, scale back the revenue pressures that have made PE capital an attractive option. Simply put, a conference or university with access to a much larger broadcast revenue pool has less incentive to partner and accept investor capital.

Cantwell has also been at the center of broader bipartisan negotiations with Senator Ted Cruz (R-TX), the Commerce Committee chair, on comprehensive college sports legislation addressing NIL, eligibility, transfers, and antitrust protections. As of May 2026, the effort has drawn White House backing and support from more than 30 university presidents, athletic directors, and conference commissioners. (21) Negotiations remain active but not completed.

For any universities or conferences with existing PE arrangements, the impact of these legislative initiatives is significant. Federal legislation that resolves the student-athlete employment issue, establishes a new revenue framework, or creates federal oversight of college athletics would alter the conditions under which those PE arrangements were finalized.

The Four Questions Boards Should Be Asking

The Big 12 deal has been analyzed extensively for what it provides — capital, sponsorship access, and optional credit. However, it has received little attention for what it asks of governing boards. University trustees bear ultimate fiduciary responsibility for their institutions. When a conference or individual university enters into a partnership with a private equity firm, that responsibility does not transfer to the conference office or the athletic director. Four questions should be on every board’s agenda before any such arrangement is approved or allowed to proceed without formal review.

Question 1: What is our total financial exposure under this arrangement, and is every contingent obligation fully reflected in our financial statements and disclosures?

The optional $30 million credit line is not revenue. It is debt, carrying a reported double-digit interest rate. Boards should require written analysis of how any financial obligation for the university created by the partnership interacts with the university’s existing debt capacity, bond covenants, and credit rating before giving its approval.

Question 2: What governance rights does the investor hold, and what institutional decisions require board approval before the administration acts?

The Big 12 agreement is structured to avoid conveying board seats or formal veto rights to RedBird or Weatherford Capital. However, the absence of formal governance rights is not the same as the absence of influence. Commercial arrangements create expectations, and expectations can shape decisionmaking. A university that has accepted a $30 million credit line from a PE firm is not in a position of complete negotiating neutrality when that PE firm later seeks to expand its rights or modify terms. Congressional scrutiny — including Cantwell’s active Commerce Committee oversight — has specifically pointed to arrangements that grant investors any control over athletics decisions, branding, scheduling, or personnel as a structural concern independent of formal board representation. Boards reviewing existing arrangements should assess their agreements against this standard.

Question 3: How does this arrangement interact with our tax-exempt status, our obligations to student-athletes, and applicable state law — and have we received written independent legal opinions on each?

The IRS permits tax-exempt institutions to engage in limited unrelated business income activities, but an arrangement that systematically generates profits accruing to a private investor neccisitates independent federal tax review. If sponsorship revenue structures create income streams allocated in proportion to the investor’s deal performance, this arrangement may require disclosure or threaten tax-exempt status. Senator Cantwell’s November 2025 formal request to the Joint Committee on Taxation to examine whether college athletics should continue to receive tax-exempt treatment makes this a real legislative risk. A board that has not received a written independent legal opinion addressing both current compliance and its exposure to possible tax challenges has not completed its fiduciary duty on this question.

Question 4: What is our exit strategy, and under what circumstances — financial, regulatory, or reputational — would we invoke it?

Every significant and well-considered institutional partnership requires a defined off-ramp. Boards should understand the answers to questions such as: What are the termination provisions? What penalties apply for early exit? Under what circumstances — regulatory change, investor misconduct, institutional mission conflict — is termination without penalty an option? If those provisions are not clearly specified in the agreement, that gap is a governance flaw.

Private equity is not inherently incompatible with higher education’s mission. But it is not motivated like a university or a university community. PE firms are oriented toward investor return, defined time horizons, and exit. Boards must be very thoughtful and answer these difficult questions before commitments are made, not after the deal is done and the terms are set.

Kim Schatzel, Ph.D., is the founder of CEOHigherEd and served as president of Towson University and the University of Louisville. CEOHigherEd publishes practitioner-grounded analysis of higher education governance and leadership for university presidents, provosts, trustees, legislative leaders, and policymakers.

Thanks for reading Kim Schatzel’s Newsletter! Subscribe for free to receive new posts and support my work.

References

All sources reflect reporting current as of May 25, 2026.

1. CBS Sports. “Inside Big 12’s bet on private equity to close revenue gap, compete in NIL.” May 12, 2026. cbssports.com

2. Front Office Sports. “Private Equity Takes a Bigger Bite of College Sports.” frontofficesports.com

3. ESPN. “Wetzel: Beware, college sports, private equity has arrived.” espn.com

4. Sportico. “Big 12 RedBird Capital Private Equity Brings Money and Legal Questions.” May 2026. sportico.com

5. ESPN / Wetzel, D. “Beware, college sports, private equity has arrived.” December 11, 2025. espn.com

6. CBS Sports. “Inside Big 12’s bet on private equity to close revenue gap, compete in NIL.” May 12, 2026. cbssports.com

7. Front Office Sports. “Big 12 Closing In on Potential $500M Private-Capital Deal.” December 14, 2025. frontofficesports.com

8. CBS Sports. (See above, Ref. 6.)

9. WUSF / Tampa Bay PBS. “Firm led by USF’s Weatherford set to provide $500 million to Big 12.” December 15, 2025. wusf.org

10. Sportico. “Big 12 RedBird Capital Private Equity Brings Money and Legal Questions.” May 2026. (See Ref. 4.)

11. Front Office Sports. “Big 12 Closing In on Potential $500M Private-Capital Deal.” (See Ref. 7.)

12. Front Office Sports. “Most Big 12 Schools Turning Down $30M RedBird Credit Line.” May 8, 2026. frontofficesports.com

13. Athletic Business. “Report: Most Big 12 Schools Decline New $30M Line of Credit.” May 2026. athleticbusiness.com

14. Front Office Sports. (See Ref. 12.) — RedBird Capital Partners statement.

15. Business of College Sports. “Is Private Investment on the Way Into College Sports or Getting Banned?” October 11, 2025. businessofcollegesports.com

16. Senate Commerce Committee. “Sen. Cantwell Warns Big Ten Presidents of Dangers in Selling University Assets to Private Equity Firms.” October 2025. commerce.senate.gov

17. Inside Higher Ed. “Secretive Big Ten Deal Riles Trustees.” November 20, 2025. insidehighered.com

18. ESPN. “Opposition from Michigan, USC pauses $2.4B Big Ten deal.” espn.com

19. U.S. Senator Maria Cantwell. “Cantwell Asks Key Policy Questions About the Tax-Exempt Status of College Athletics Revenue.” November 2025. cantwell.senate.gov

20. Senate Commerce Committee. “Cantwell, Schmitt Join Forces on Draft Bill to Generate More Revenue for College Sports.” March 2026. commerce.senate.gov

21. CBS Sports. “New bipartisan Senate bill backed by White House set to be NCAA’s best chance yet for college sports reform.” cbssports.com

From 2012 to 2025, severance packages for terminated Football Bowl Subdivision coaches blew past $1 billion.

In 2025 alone, fifteen fired Football Bowl Subdivision coaches at public universities cost their institutions a combined $228 million — the largest single-year buyout total in the history of college athletics, nearly double the prior year’s $120 million.¹ LSU paid $54 million to end Brian Kelly’s tenure.² Penn State owed $49.7 million to part ways with James Franklin.³ Kentucky paid $37 million to fire Mark Stoops.⁴ These were not anomalies. The Knight Commission estimates that between 2012 and 2024, public universities paid $852 million in severance to football coaches, head and assistant combined.⁵ Add the 2025 costs and the total clears $1 billion.

The numbers are staggering. What has drawn far less scrutiny is the accounting treatment — or rather, the near-universal absence of it by universities.

Every one of these buyouts was a contractual obligation from the moment the contract was signed. The liability existed on day one. In the overwhelming majority of cases, no reserves were accrued for this liability.¹⁷ Additionally, no mention of it was made in any financial statements or audit reports.¹⁷

The structural absurdity hiding in plain sight

Before we get to the accounting, let’s consider the underlying math that makes this so remarkable.

The average contract length for a Power 4 head football coach at a major program now runs between seven and ten years. Texas A&M signed Jimbo Fisher to a ten-year, $95 million fully guaranteed extension in 2021.⁶ Alabama signed Kalen DeBoer to an eight-year, $87 million deal upon Nick Saban’s retirement.⁷ Georgia extended Kirby Smart through 2033 at $13 million annually — the highest annual salary in college football.⁸ Among the broader Power 4 population, contracts of six, seven, and eight years have become routine for coaches who have not yet coached a single game at their new institution.

The average realized tenure of a fired FBS head football coach — the actual number of seasons before the athletic director decides the investment is not working — is approximately 3.7 years.⁹

Athletic directors are signing and boards are approving seven-to-ten-year contracts for coaches who statistically will not survive four seasons. Everyone then expresses surprise when the termination clause comes due and wonders how to pay for it.

Men’s basketball follows the same pattern. At least nine Power 4 head coaches carry buyout obligations above $20 million.¹¹ Across the last three coaching cycles, 93 head coaches changed jobs across 136 FBS teams.¹² That is a turnover rate that makes the long-term contract model structurally irrational.

The gap between contract length and expected tenure is real. It is a quantifiable financial exposure that universities are not measuring, not reserving for, and not disclosing.

What GAAP says — and what universities do instead

Under the U.S. Generally Accepted Accounting Principles, the accounting framework for termination benefits is not ambiguous. Two standards govern the territory. ASC 420, Exit or Disposal Cost Obligations, covers one-time termination benefits. ASC 712, Compensation — Nonretirement Postemployment Benefits, governs something closer to what a coaching contract represents: a contractual termination benefit embedded in an ongoing arrangement, where the employer is legally obligated to pay specified benefits whenever a triggering event occurs.¹³

Under ASC 712, the standard is clear: when it is probable that employees will be entitled to contractual termination benefits and the amount can be reasonably estimated, a liability must be recognized and an expense recorded.¹³ A separate but related standard, ASC 450, Loss Contingencies, requires disclosure of material contingent obligations even when not yet formally recognized — specifically, the nature and estimated magnitude of the contingency.¹⁴

A ten-year, fully guaranteed contract paying a football coach $9.5 million annually — with a buyout schedule beginning at $76 million with set year-over-year reductions — is precisely the kind of obligation these standards contemplate. The amount is not uncertain. The schedule is written into the contract. The triggering event, termination without cause, is within the institution’s control. The historical firing rate suggests it is not just possible but probable.

Under a rigorous application of GAAP, a university that signs such a contract has a recognizable and disclosable contingent liability from the date of execution. At minimum, the materiality and nature of that obligation belong in the notes to the financial statements. Most athletic department audits do not include them. Most university financial statements do not either.¹⁷

What it looks like from inside the president’s office

The accounting argument above is not theoretical. We find coaching contract termination obligations nowhere in the university’s financial record — not on the balance sheet, not in a footnote, not in a disclosed contingency — until the day a firing decision is made. The liability is then recognized with no prior acknowledgment in any audit or financial report that the exposure existed.

That experience is not unusual. It is the norm across collegiate athletics. As a board member and CEO experienced in the private and public sector, I would expect companies to reserve for known risk. The absence of that discipline in college athletics is not an accounting technicality. It is a governance gap with real financial consequences.

Firms routinely reserve for doubtful receivables, accrue environmental remediation liabilities years before a dollar is spent, and disclose material tax contingencies — in each case because known risk with estimable costs should be planned for, not discovered.

Coaching contract termination obligations meet every one of these criteria. The obligation is contractual and certain in structure. The amount is calculable on any given day. The probability of a triggering event, given historical tenure data, is not remote. The amounts involved – in the tens of millions of dollars - have long since crossed any reasonable materiality threshold. The same GAAP standards apply to athletics that apply to the rest of the institution. Boards must ensure they are met.

A governance failure on two levels

Boards of trustees approved every contract on this list. Texas A&M’s board approved Jimbo Fisher’s 10-year, $95 million fully guaranteed extension in January 2022 — nineteen months before paying him $76.8 million to leave.⁶ LSU’s board extended Brian Kelly’s contract in 2023.² Penn State’s board extended James Franklin’s contract in 2022.³ The pattern is consistent: boards approve aggressive contracts, often at the urging of athletic directors operating in a competitive marketplace they have helped overheat, with little apparent discussion of the contingent financial exposure being assumed.

The first failure is fiduciary. A board that approves a $75 million contingent obligation without a corresponding discussion of reserve adequacy, financial risk, or disclosure requirements is not exercising the oversight its charter demands.

The second failure is structural. University boards and their audit or finance committee members must ask the right questions about athletic contract liabilities. When both the auditors and the institution treat coaching buyouts as off-balance-sheet matters not worth disclosing, the board receives no signal that anything requires attention. The contract goes into a drawer. The liability does not appear in the financials.

This is not an equivocal accounting question. ASC 450 — the GAAP standard governing loss contingencies — establishes a three-tier framework. When a loss is probable and estimable, it must be accrued. When a loss is reasonably possible but not yet probable, accrual is not required — but disclosure in the financial statement footnotes is. The standard requires that material contingent obligations be described: their nature, and the range of possible loss. Only when an exposure is remote does disclosure become optional.

A coaching contract buyout is not remote. Given that the average FBS head football coach is fired before completing four years of a seven-year contract, the probability of a triggering event over the life of any given contract is not a theoretical concern. The obligation is contractually certain in structure, calculable on any given day, and material by any reasonable threshold. At a minimum, these obligations belong in the footnotes. The near-universal absence of that disclosure is not justifiable under the standards as written.

The Association of Governing Boards of Universities and Colleges (AGB) formal position on board responsibility is unambiguous: governing boards should not assume that delegation of operational authority to the president and athletic director limits their oversight responsibility. They must remain informed about the policies, processes, costs, and legal and regulatory requirements of their athletics programs. That standard, applied seriously, encompasses the contingent financial obligations those programs carry. A board that has approved a $50 million buyout obligation and never seen it appear in an audit report has not been adequately informed — and the audit committee has not asked the right question.

When the average football coach does not survive four years on a seven-year contract, “what will we owe if this doesn’t work out?” is not a contingency question. It is a planning question that governance boards must ask.

The compounding effect

The structural problem worsens with each contract cycle. The Knight Commission’s financial projections suggested annual severance totals could approach $175 million by fiscal year 2032.¹⁵ That figure was exceeded by 2025 actuals — seven years ahead of schedule.¹

The basketball exposure is accelerating on a parallel track. At least nine Power 4 programs entered the 2025 offseason carrying basketball head coach buyout obligations above $20 million.¹¹ That exposure does not appear on those programs’ balance sheets or audited financial statements. It is, by every accounting logic that applies to the contractual structure of these arrangements, a contingent liability that should be disclosed. It is not.

A Fortune 500 company that signed contracts with $75 million no-fault termination obligations would report those contingencies in its disclosed risk factors. A public research university doing the same thing has often treated it as a matter solely for the athletic director.

Four questions every board should be asking

The reforms that follow from the accounting and governance analysis above are not complicated. They do not require legislation, accreditor intervention, or a conference vote. They require boards to ask four questions they are not currently asking:

Question 1: What is our total contingent termination exposure across all coaching contracts, right now?

Every coaching contract with a buyout clause creates a contingent liability the moment it is signed. The board — not the athletic director, not the general counsel on request — should receive an annual summary of total buyout exposure across football, men’s basketball, and any other sport with contracts above a defined threshold. That number should be treated the same way a corporate board treats any other material contingent liability: reviewed, documented, and assessed for disclosure. At most Power 4 institutions, no such summary exists. The question has never been asked.

Question 2: What is our reserve or self-insurance position against that exposure?

Given that the average FBS football coach is fired before completing four years of a seven-plus-year contract, termination is not a remote contingency — it is a possible outcome over an extended time period. Boards should require that athletic departments demonstrate how a buyout obligation in the range of the current contract would be funded, on what timeline, and from what sources.

Question 3: Has our auditor assessed whether these obligations require footnote disclosure under GAAP?

ASC 712 and ASC 450 establish clear standards for recognizing and disclosing contractual termination liabilities. Under ASC 450, even when an obligation does not yet meet the “probable and estimable” threshold for balance sheet accrual, it must be disclosed in the financial statement footnotes if it is “reasonably possible” that a material loss will be incurred. Given average coaching tenure data, a buyout obligation on a seven-year contract sits comfortably within that range from the day the contract is signed. Disclosure — the nature of the contingency and the range of possible loss — is not a high bar. It is the floor. The audit committee should require, as part of the annual audit engagement, that external auditors specifically address coaching contract termination exposure and render a judgment on whether material contingencies require footnote disclosure. The absence of such disclosures in the audited financial statements of institutions carrying nine-figure contingent coaching obligations should be a named finding. Audit committees that have not asked this question should ask it at their next meeting.

Question 4: Does this contract include offset provisions, and if not, why not?

An offset provision reduces the institution’s buyout obligation when a fired coach accepts new employment — a straightforward mechanism that shifts a portion of the financial risk back to the market. Many high-value contracts still do not include meaningful offsets, leaving the institution fully liable regardless of the coach’s subsequent employment. Boards should require offset provisions as a standard term and expect an explanation when athletic directors recommend against them.

These are governance questions to ask before a contract is signed — and annually thereafter. The board that asks them is doing its job. The board that does not is assuming a liability it has not costed, for a risk it has not measured, on behalf of an institution it is responsible for protecting.

The $1 billion in coaching severance paid since 2012 is not just a story about out-of-control coaches’ salaries. It is a story about what university boards have chosen to approve, what they have chosen not to reserve for, and what they have chosen not to disclose. The accounting standards are not ambiguous. The fiduciary obligations are not optional.

References

1. Front Office Sports. (November 3, 2025). Coaching Buyouts to Surpass $1B in College Football Playoff Era. [Knight Commission data: $228M in 2025 head coach buyouts at public universities; total nearing $1B since 2014 CFP era began.] https://frontofficesports.com/college-football-buyouts-have-now-surpassed-1b-in-the-cfp-era/

2. The Advocate / NOLA.com. (November 27, 2025). LSU sent former coach Brian Kelly written confirmation that he was fired without cause and agreed to pay his nearly $54 million buyout. [Official letter from LSU President Wade Rousse confirming $54M termination-without-cause payment over six years, subject to duty-to-mitigate clause.] https://www.nola.com/sports/lsu/football/lsu-football-brian-kelly-firing-buyout-legal-dispute/article_8f91986c-7a0b-4092-b7dc-92b07aefa5bb.html

3. CBS Sports. (November 17, 2025). James Franklin buyout with Penn State drastically reduced amid Virginia Tech hiring. [Franklin’s $49.7M contractual buyout negotiated to $9M settlement after Virginia Tech hire; offset clause mechanics confirmed by multiple sources.] https://www.cbssports.com/college-football/news/james-franklin-buyout-reduced-penn-state-virginia-tech/

4. WKYT / Fact-Check. (December 1, 2025). College football’s most expensive coaching buyouts. [Mark Stoops, Kentucky, $37M buyout upon firing, 2025.] https://www.wkyt.com/2025/12/01/factcheck-college-footballs-most-expensive-coaching-buyouts/

5. Inside Higher Ed. (December 8, 2025). Coach Buyouts Boom to Record Highs. [Knight Commission: $852M in total severance for FBS football coaches including assistants, 2012–2024.] https://www.insidehighered.com/news/business/financial-health/2025/12/08/coach-buyouts-boom-record-highs

6. ESPN / CBS Sports / AP. (November 2023). Texas A&M fires Jimbo Fisher; $76.8M buyout, largest in college football history at time of firing. Contract extension: January 2022, 10-year/$95M fully guaranteed. https://www.espn.com/college-football/story/_/id/32552130/schools-spent-5336-million-dead-money

7. Athlon Sports. (2025). Highest-Paid College Football Coaches in 2025. [Kalen DeBoer, Alabama, 8-year/$87M deal, 90% guaranteed upon signing.] https://athlonsports.com/college-football/highest-paid-college-football-coaches

8. University of Georgia Athletics. (May 2, 2024). UGA Athletics Board Approves Contract Extensions for Josh Brooks and Kirby Smart. [Smart’s annual salary increased to $13 million, making him highest-paid coach in college football; contract extended through December 31, 2033.] https://georgiadogs.com/news/2024/5/2/general-uga-athletics-board-approves-contract-extensions-for-josh-brooks-and-kirby-smart

9. On3.com. (May 16, 2022). Current FBS coaches have been in their jobs for an average of just 3.7 years. [Analysis of all 131 FBS head coaching tenures; average 3.7 seasons at current program; high turnover documented across all FBS conferences.] https://www.on3.com/news/current-fbs-coaches-have-been-in-their-jobs-for-an-average-of-just-3-7-years/

10. University of Connecticut Athletics. (July 8, 2024). Hurley and the Huskies Agree to New Contract. [Official announcement: six-year, $50 million agreement through 2029–30; base salary $400,000 plus $6.375M speaking/consulting/media compensation escalating annually; $1M annual retention bonus.] https://uconnhuskies.com/news/2024/7/8/mens-basketball-hurley-and-the-huskies-agree-to-new-contract

11. Yahoo Sports / On3. (April 2026). Top 25 largest buyouts for men’s college basketball head coaches in 2025–26. [Brad Underwood/Illinois $32.7M; Fred Hoiberg/Nebraska $32.5M; Nate Oats/Alabama $26.9M; T.J. Otzelberger/Iowa State $25M; at least nine Power 4 coaches with obligations above $20M. Data per USA Today contract database.] https://sports.yahoo.com/articles/top-25-largest-buyouts-men-015226805.html

12. CBS Sports. (December 2025). College football coaching carousel tracker: 2025–26 firings and hirings. [93 head coaches changed jobs across 136 FBS teams over the last three coaching carousel cycles.] https://www.cbssports.com/college-football/news/college-football-coaching-carousel-tracker-grades-analysis-on-coach-changes-2025-26-firings-and-hirings/

13. GAAP Dynamics. (2025). Planning a restructuring? The requirements of ASC 420 and ASC 712. [ASC 712 governs contractual termination benefits in ongoing arrangements; liability recognized when probable and reasonably estimable; distinguished from one-time exit costs under ASC 420.] https://www.gaapdynamics.com/insights/blog/2020/04/21/planning-a-restructuring-heres-a-refresher-of-asc-420-and-asc-712/

14. PwC Viewpoint. (2025). 13.6 Nonretirement postemployment benefits. [ASC 712-10-50-1 and ASC 715-20-50-1(q): disclosure requirements for contractual termination benefits; ASC 450-20 loss contingency disclosure framework for material unrecognized obligations.] https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/financial_statement_/financial_statement___18_US/chapter_13_pensions__US/136_nonretirement_po_US.html

15. Knight Commission on Intercollegiate Athletics / CLA Financial Projections Report. (September 2023). Financial Projections through 2032 for Division I FBS Programs. [Annual severance projected to reach $173–175M by FY2032; exceeded by 2025 actuals seven years ahead of projection.] https://www.knightcommission.org/wp-content/uploads/2023/09/cla_financial_projections_report_2023.pdf

16. Knight Commission on Intercollegiate Athletics. (December 31, 2025). Analysis of FBS Football Coaches Severance Pay [updated]. [C.A.R.E. Model conference-based revenue distribution reform proposal; full Knight-Newhouse severance database 2012–2025.] https://www.knightcommission.org/wp-content/uploads/KnightNewhouseData.FBSFootballSeveranceResource_2025.pdf

17. NCAA Membership Financial Reporting System (MFRS). NCAA MFRS FAQ and Glossary. [Severance payments are recorded as expenses “recognized for past coaching and administrative personnel” in the year paid, not accrued prospectively as contingent liabilities; the NCAA explicitly recommends recording a coaching contract buyout “as an offset to the salary and benefit expense” in the period of payment.] https://ncaaorg.s3.amazonaws.com/ncaa/finance/NCAAFIN_FAQs.pdf; Knight-Newhouse College Athletics Database. About the Data. [Severance payments in the Knight-Newhouse database reflect amounts reported by institutions on NCAA Financial Report forms in the year paid; no institution in the database carries coaching termination exposure as a prospective accrual or disclosed contingent liability.] https://knightnewhousedata.org/about-the-data

Duke’s landmark three-game deal with Amazon Prime Video, announced on April 30, 2026, made Prime Video the exclusive broadcaster of marquee neutral-site men’s basketball games for the first time in collegiate sports history. Then on May 7, Georgia and Florida State announced the cancellation of their home-and-home football series scheduled for 2027 and 2028. Instead, they are now pursuing a neutral-site alternative that some media have already reported is gaining significant interest from streaming platforms including Netflix. ^1, 2, 3

Let me share why all this matters beyond just the impact on the scheduling calendar. As a former president of two universities and a board member of two Division I athletic conferences — including the ACC during the period when Clemson and Florida State’s legal challenges forced a renegotiation of conference media revenue distribution — I watched firsthand how difficult it is to hold a conference together when member institutions believe the conference revenue scheme no longer adequately serves their interests.

What Duke has done, and what Georgia and Florida State are moving toward, is not a scheduling innovation. In partnership with streaming services, it is the beginning of a new form of media rights negotiation by athletics departments that will impact who captures more value and generates more revenue in collegiate athletics. I also want to point out that it is being conducted outside any conference governance process.^1, 2

The Duke-Amazon Deal: What It Is and What It Isn’t

Duke’s agreement with Amazon Prime Video covers three neutral-site men’s basketball games per season: UConn in Las Vegas on November 25, Michigan at Madison Square Garden on December 21, and Gonzaga in Detroit on February 20. Prime Video gets exclusive streaming rights to all three games. Industry sources characterized the arrangement to Sports Business Journal as a replacement for a multi-team event (MTE). I think the better moniker for these new business deals is Premium Streaming Packages or PSPs.

Duke created its own “PSP” and sold it to Amazon, with third-party promoters arranging the games before selling the rights to the streaming platform. This is not a conference-level media transaction. It is a program-level commercial deal that packages and leverages Duke’s national brand as a standalone streaming product.

The Fox Sports dispute highlights what happens when that distinction breaks down. Fox claimed broadcast rights to the Duke-Michigan game at Madison Square Garden, arguing that under a previously agreed alternation pattern with ESPN and the ACC, it should receive those rights. ^1,4,5

This dispute clearly highlights the most important question no existing governance framework answers: when a program makes scheduling decisions that affect the broadcast rights of its conference partners, who has the authority to approve that decision, and at what level? 

Georgia-Florida State: The Football Equivalent Takes Shape

The Georgia-Florida State cancellation affects scheduling across the entire Power 4. Both the SEC and ACC have moved to nine conference games. Both programs play highly popular annual out-of-conference rivalry games (i.e., Georgia against Georgia Tech, Florida State against Florida). That left no room for a home-and-home series, which used two nonconference slots over two years. ^2, 6,7

FSU Athletic Director Michael Alford said the programs are now working toward a neutral-site game, likely in Tampa in 2028, and is ‘optimistic we will get that done.’ Georgia AD Josh Brooks echoed that goal.^2, 6,7

What neither statement addressed is whether this neutral-site game is already being courted by streaming platforms. The streaming platform that gets the Georgia-Florida State regular-season matchup would then have a marquee college football property existing outside of any conference media rights framework.

This is very similar to the Duke-Amazon deal, but the stakes are even higher.

What the PSP Playbook Means for Conference Authority

Let’s take a step back and summarize what we have here.

Conference media deals derive their value from the aggregated scheduling commitments of member institutions. When those institutions begin pulling out their highest-value matchups from the conference pool and monetizing them independently, they are eroding the asset base on which conference deals are built.

We saw a version of this play out in the ACC. Clemson and Florida State challenged the ACC’s revenue distribution model. They argued their football programs generated value greater than the ACC equal-share distribution model was providing. The resulting lawsuits motivated a renegotiation by the ACC of that distribution. The PSP trend has the same underlying logic but is not as confrontational.

As we saw with Clemson and Florida State, conference realignment fights make headlines, are hotly contested, and usually have lots of lawyers involved. The PSP model is quieter, more transactional, and largely under the radar.

The Georgia-Florida State situation also adds a two-conference dimension that makes the governance question even more difficult. The SEC and ACC have no direct contractual claim on this neutral-site game as it is a nonconference matchup. But ESPN does hold primary media rights for the two conferences. It is also reasonable to think that ESPN has scheduling assumptions built on institutional commitments that this direct streaming deal could partially circumvent.

To be clear, the conferences don’t own the matchup. But they did contribute to building the infrastructure, building the brand, building the broadcast distribution, building the audience — all this makes the matchup more commercially valuable. However, the contribution by these two conferences goes uncompensated in the proposed PSP model.

Board Oversight and Senator Cantwell’s Warning

The Duke-Amazon deal was structured as a scheduling arrangement. That perspective typically would keep the deal below the threshold for board governance review and approval. From my experience on boards, decisions that look operational from inside the athletics department generally surface to the board only if significant consequences make their way to board members.

Here is a significant consequence concerning PSPs.

If you are not familiar with Senator Cantwell (D-Washington State), a brief introduction is in order. She has served in the U.S. Senate since 2000. She is the Ranking Member of the Senate Committee on Commerce, Science, and Transportation. She also serves on the Senate Committee on Finance, which has taxation as one of its areas of focus. In addition, Cantwell serves on the Joint Committee on Taxation, a bipartisan committee that provides technical expertise on tax legislation. She was a senior tech executive at RealNetworks where she led the building of one of the first successful internet streaming companies.

Senator Cantwell has gone on record with significant concerns about commercialization in college athletics that apply here. Her central concern is that university athletic revenues are untaxed because they are ‘substantially related’ to the institution’s educational purpose. However, she has stated that commercial arrangements introducing for-profit intermediaries might undermine that tax-exempt status. ^8,9

Simply put, when Duke packages some of its games through a third-party commercial promoter and then sells exclusive rights to a subscription streaming platform, the revenue generated looks less like traditional conference distributions and more like a commercial media transaction.

Cantwell has sent the broader commercialization question to the Joint Committee on Taxation for formal legal analysis. This all relates to UBIT, which stands for “Unrelated Business Income Tax”. The basic tax rule: if a tax-exempt organization, such as a university, generates income from a trade or business that isn’t substantially related to its educational mission, that income is taxable. ^8,9

Couple that with revenue sharing directly with athletes — which looks even less like an educational activity — and the UBIT scrutiny becomes even more serious for universities.

In short, boards approving PSP arrangements without independent tax counsel assessing UBIT exposure could be creating an unquantified liability for the university they govern.^8,9

Four Questions Trustees Should Be Asking Now

The Duke deal closed in April. The Georgia-FSU deal went public in May. More PSP deals will be coming. Here are four questions for trustees to consider.

1. Does our governance framework view premium neutral-site scheduling decisions as simply the purview of athletics operations, or as transactions requiring board involvement?

At most institutions, the answer is athletics operations — which is what the PSP model takes advantage of. Yet I believe these types of commercialization agreements belong in front of the board. Boards should address this policy gap before the next deal is proposed.

2. Has independent tax counsel assessed whether the proposed arrangement affects the institution’s tax-exempt status under the ‘substantially related’ standard?

A for-profit promoter and a subscription streaming platform in the revenue chain might change the tax analysis. The institution’s Office of the General Counsel might have a conflict of interest if they advised on the deal structure. Independent outside tax counsel with a specific mandate to assess UBIT exposure is the best option. The Joint Committee on Taxation is reviewing this question now at Senator Cantwell’s request. Boards without a written opinion from independent outside tax counsel should rethink their position.

3. What are the institution’s existing conference obligations regarding scheduling authority and media rights, and does the proposed arrangement comply with them?

Fox Sports’ claim on the Duke-Michigan game is the best example of what happens when this question goes unanswered. Conference agreements, existing media contracts, and broadcast alternation agreements all potentially impact any proposed PSP. It just makes sense to confer with conference counsel — not just institutional counsel — before a board considers approval of a PSP.

4. What portion of PSP revenue flows to the institution, and how does it interact with the conference’s revenue distribution model?

Revenue generated outside the conference model does not flow through the conference distribution pool — a positive from the university’s perspective and a possible problem for the conference and its members. For public universities, we also need to ask whether independently captured commercial revenue from either university or state-financed athletic infrastructure carries any obligations to those entities?

The programs moving fastest on PSP arrangements are making decisions in an environment where every incentive favors independent action over conference deliberation.

The governance structures involved today were built in an era when the broadcast media rights market was largely conference controlled. That era is ending. Which institutions will best navigate what comes next? Those whose boards understand what is happening before a new streaming deal is announced.

References

1. Duke University Athletics. “Prime Video Reaches Multiyear Agreement with Duke Men’s Basketball.” April 30, 2026. goduke.com.

2. Sic ‘Em Dawgs. “Georgia, Florida State Cancel Football Series, Eye Single Neutral-Site Game.” May 7, 2026. sicemdawgs.com.

3. Tomahawk Nation. “FSU and Georgia Will ‘Work in Good Faith’ to Schedule 2028 Neutral Site Game in Tampa.” May 7, 2026. tomahawknation.com.

4. Portnoy, Ben. “Duke’s Three-Game Package Characterized as Replacement for Multi-Team Event.” Sports Business Journal, May 6, 2026.

5. ABC11 Raleigh-Durham. “Duke-Amazon Deal Signals Streamers Will Be More Aggressive in College Sports Rights.” May 2–3, 2026.

6. FB Schedules. “Florida State, Georgia Cancel Future Series; Eye Neutral-Site Game.” May 7, 2026. fbschedules.com.

7. WSBTV Atlanta. “Georgia, Florida State Eyeing Neutral Site Game Instead of Home-and-Home Series.” May 7, 2026. wsbtv.com.

8. U.S. Senate Commerce Committee. “Sen. Cantwell Warns Big Ten Presidents of Dangers in Selling University Assets to Private Equity.” October 10, 2025. commerce.senate.gov.

9. Sutich, Jason. “WA Senator Challenges Tax Breaks for College Sports Amid $2.4B Big Ten Private Equity Deal.” MyNorthwest / KIRO 7, November 20, 2025.

In March 2025, Moody’s Ratings downgraded its outlook for the entire U.S. higher education sector from stable to negative — and by November 2025 reaffirmed that negative outlook for fiscal year 2026, sustaining the designation into a second consecutive year for the first time since the pandemic era. [1][2] The causes were federal: research funding cuts, tightening immigration policy, uncertainty over student aid, and a demographic cliff beginning next year. Institutions responded predictably — hiring freezes, spending reviews, increasing shared services.

What went unexamined was the compounding effect of how public universities have systematically leveraged state assets — land, facilities, infrastructure, and public appropriations — to prop up athletic departments that cannot cover their own costs.

While institutions cut faculty lines and deferred academic capital projects in response to the credit warning, public universities with major athletics programs continued transferring more than $2 billion annually in student fees and institutional funds to athletics. [3] Those numbers are, to put it bluntly, staggering.

The money flows in four directions: covering operating losses, paying coaches, paying players under the new House v. NCAA settlement, and — the line item almost no one discusses — paying out tens of millions to coaches who have already been fired.

Every dollar in that chain runs through the university’s consolidated balance sheet and state-backed institutional credit. That is a credit question. And most governing boards are simply not treating it with the urgency the moment requires.

What the Agencies Said — and What They Didn’t

The Moody’s November 2025 sector outlook for fiscal year 2026 was stark. [1] Expenses are projected to grow at 4.4 percent while revenue grows at only 3.5 percent — a gap that widens every year it persists. Sixteen percent of private colleges are forecast to run negative earnings margins in 2026, up from 7.2 percent two years earlier; small public institutions face revenue growth of just 2.5 percent. The drivers are compounding: declining NIH research funding, caps on graduate borrowing compressing high-margin master’s enrollment, immigration policy squeezing international students, and the demographic cliff that will begin shrinking the traditional college-going population in 2026.

A Moody’s negative outlook is not an abstract signal — it carries direct institutional consequences. Analysts actively watch rated institutions for deterioration and are more likely to downgrade individual credit ratings during the outlook period. A downgrade raises the cost of capital on every bond issuance — facilities, deferred maintenance, and capital projects all become more expensive to service. It triggers tougher scrutiny from state legislatures and donors. And for institutions already on thin margins, a downgrade accelerates the fiscal contraction it was meant to flag — a self-reinforcing cycle that is very difficult to exit. As Moody’s associate managing director Emily Raimes noted, [2] institutions are being affected not just by specific policies but by “what the colleges themselves are doing in this environment” — preemptive cuts that compound the underlying stress.

Moody’s was not alone. S&P issued a negative outlook for universities in December 2025, [10] and Fitch labeled its 2026 outlook “deteriorating” — its second consecutive year at that designation, citing a shrinking student pipeline and state funding it called “vulnerable.” [11] All three agencies cited the same drivers. This is not a divergence of opinion. It is a convergence of alarm.

Assets Leveraged for Athletic Gain: Where the Money Comes From and Actually Goes

Let’s be precise about the mechanism. When a public university issues bonds to build a stadium, that debt is backed by the university’s general revenue — a revenue stream that includes state appropriations, tuition, state and federal grants. When athletics runs deficits, the institution covers them using those same funding sources. When coaches are paid $7, $8, or $10 million a year, the salary is part of the athletics budget and university cash flow.

The university is not simply supporting athletics. It is pledging its assets as a public higher educational institution— land, facilities, bonding authority, tuition, grants, state appropriation — as collateral to support a national sports entertainment and gambling ecosystem that overwhelmingly fails to generate a return for the institution that funds it.

Moody’s Investors Service has stated that 90 percent of athletics programs are not self-sustaining — roughly 315 of approximately 350 Division I institutions require growing subsidies to cover their costs. [3a] According to the Knight Commission’s analysis of FY 2023 NCAA financial data, public universities with FBS football programs transferred more than $2 billion annually in institutional support and student fees to athletic departments. [3]

The University of South Florida reported the largest total subsidy in FBS for fiscal year 2024: $63.7 million [4] — equal to 63 percent of its entire athletic operating budget. UMass reported $60.2 million in subsidies in fiscal year 2025, roughly 89 percent of its athletic budget, while fielding a football team that went 0-12. [4] Rutgers has accumulated more than $516 million in cumulative athletic deficits since joining the Big Ten in 2014, with a ~$78 million true shortfall in FY 2024-25 alone [6]

The question trustees are not asking : Where is this money going once it enters the athletics department? The answer, institution by institution, is the same: covering operating losses, paying coaches, funding the new athlete compensation obligations under the House settlement, and — the category that has exploded in 2025 — paying out former coaches who have been fired.

Paying Coaches

Coaching salaries at Power 4 conferences (ACC, SEC, Big Ten, Big 12) routinely exceed $7–10 million annually for head football coaches. At most public institutions, a portion of that compensation runs through the university’s payroll system and is subsidized by institutional funds when athletic revenue falls short.

In at least 40 states, the highest-paid public employee is a college football or basketball coach — their pay often subsidized from state-supported institutional budgets. [13]

Paying Out Fired Coaches

This is the line item that is breaking budgets and barely registering in governing board discussions. In 2025, fifteen fired FBS football coaches at public universities collectively cost their institutions approximately $228 million in buyout obligations — nearly double the previous record of $120 million in fiscal year 2024, according to Knight Commission data. [14] The most prominent: LSU owes former coach Brian Kelly $54 million over six years after firing him in 2025. Penn State owes James Franklin approximately $49 million. Kentucky owes Mark Stoops $38 million; Michigan State owes Jonathan Smith $33.5 million; Florida owes Billy Napier $21 million. But the all-time record remains Texas A&M’s $76.8 million exit payment to Jimbo Fisher in 2023. [14]

If we take a deeper dive into Michigan State’s Jonathan Smith, we find MSU signed him to a $52.8 million deal in November 2023 after buying him out from Oregon State for $3 million, fired Smith in November 2025, and is now paying him $33.5 million in buyout – all within 24 months.

Between 2012 and 2024, universities paid an estimated $852 million in total severance to football coaches and staff. [14] Universities often say buyouts are funded by donors, not students or taxpayers. But at institutions already running athletics deficits, the distinction collapses: every donor dollar directed to a coach’s buyout is a dollar not available to close the structural gap in the athletic budget — which then falls to institutional funds.

Paying Players — The New Permanent Obligation

The House v. NCAA settlement, which received final judicial approval on June 6, 2025, requires schools to share up to $20.5 million per year directly with athletes, increasing 4 percent annually. [7] For programs already requiring $20–60 million in annual subsidies just to break even, this is not an additional line item. It is a structural reset of the entire financial model — with no corresponding increase in generated revenue for most programs.

Private Equity: Monetizing What the Public Built

The industry’s response to the House settlement funding gap has been to pursue private capital. Private equity firms — Elevate Sports Ventures, Otro Capital, Chiron Sports Group, and others — are offering athletic departments upfront capital in exchange for claims on future revenue streams: ticket sales, naming rights, media rights, sponsorships, hospitality. The University of Utah executed the first major deal, spinning off commercial rights into Utah Brands & Entertainment and securing funding from Otro Capital. [8] Clemson created a parallel structure called Clemson Ventures. The Big 12 is in advanced discussions with RedBird Capital. [8]

At public universities, the structural problem with these arrangements is that the revenue streams being monetized were built on or subsidized with student fees/tuition and public assets. Often state-owned land houses the stadiums. State-backed bonds financed the arenas. Student fees, state appropriations, and tuition funded the operating deficits that kept programs alive long enough to become investable. The PE firm arrives at the end of that chain, securitizes the future cash flows, and exits in five to seven years — potentially requiring the institution to buy back its own revenue capacity at a premium.

Where Athletics and Credit Risk Intersect

The rating agencies model revenue growth, expense trajectories, liquidity ratios, and debt profiles. What they cannot easily model is the discretionary spending embedded in athletics subsidies — money that, under genuine fiscal pressure, could theoretically be redirected to academic operations but almost never is.

Athletics budgets have shown remarkable insulation from the austerity measures that routinely affect academic departments.

S&P put it directly. In its December 2025 sector outlook, S&P ratings analysts wrote that the House v. NCAA settlement “has created pressure for universities and athletics departments to raise money to support athletes and athletics operations” — and that “in a number of cases, this is also affecting academic budgets at a time of considerable stress in higher education.” [10]

That is a ratings agency whose rating reflects a university’s overall creditworthiness — not a faculty senate, not a governance reformer — stating on record that athletics costs are now bleeding into academic budgets under sector-wide financial stress. The implication for institutional ratings is direct and has not been sufficiently or urgently acted upon by most university governing boards.

Moody’s, S&P, and Fitch are all correct that expenses are growing faster than revenue. What the sector-level outlook may be underweighting is the degree to which athletics subsidies represent a structural floor on institutional spending — one that does not flex down in response to credit pressure the way other expense categories do, and one that has increased substantially under the House settlement and will continue to do so.

What Boards Must Do Before the Next Rating Review

The convergence of a negative sector outlook, accelerating athletics costs, and incoming private equity arrangements creates a specific fiduciary obligation for governing boards at public universities. That obligation is not an abstract hypothetical. It is urgent and specific:

• Demand a full-cost accounting of athletics subsidy — student fees, direct institutional support, state appropriations, asset use, debt service, shared services — expressed as a single audited number, presented annually alongside academic budget data.

• Require an explicit multi-year forecast and analysis of how the House settlement’s $20.5 million annual athlete compensation obligation will be funded — and what academic budget or student fee increases would be required if athletic revenue growth falls short of projections.

• Before approving any private equity or revenue-sharing arrangement involving athletic assets, require independent counsel to opine on the public interest implications: what the state owns, what rights it is conveying, and what recourse exists if the arrangement underperforms.

• Apply the same credit stress-testing the rating agencies use to the athletics budget specifically: what happens to this subsidy if enrollment declines 5 percent? If federal research revenue falls? If the institution’s credit rating is downgraded and borrowing costs rise?

Moody’s, S&P, and Fitch are watching the sector. The demographic cliff is real. Federal policy volatility is real. The expense-revenue gap is real. And embedded inside every institution that carries it, the athletics subsidy is also real — large, growing, structurally insulated from normal fiscal discipline, and about to become significantly more expensive.

The boards that govern through this moment successfully will be the ones that treat athletics and its funding like the rest of a university’s budget — highly transparent and accountable for its fiscal management.