When the Balance Sheets Start Talking
Financial Divergence and Structural Stress in College Athletics
A political scientist scans the college sports headlines and runs them through a political economy lens.
NB: This essay is written in my capacity as a political scientist who studies institutions, incentives, and collective action, not as an institutional spokesperson.
The University of Louisville recently published an open letter from its president, athletic director, and board chairman laying out the day-to-day financial pressures facing a modern athletic department. What makes it notable isn’t outrage or defensiveness. It’s the sheer candor, in that the letter doesn’t describe mismanagement — instead, it describes structural stress.
The specifics are worth running through your head. Louisville runs a $12M+ operating deficit on a $167M budget, reserves are nearly gone, and the incoming $20.5M revenue-sharing mandate required a $25M line of credit just to remain viable. Their proposed solution is a hard spending cap modeled explicitly on the NFL: enforceable limits on institutional spending, competitive balance protections, a defined revenue share for players, and rules everyone actually plays by.
The Chronicle of Higher Education spoke to Louisville’s president this week, and his framing was stark: without major intervention, sports “will go away” on some campuses. Nearly 70 percent of campus leaders surveyed by the Knight Commission support national laws allowing spending limits. Louisville’s leaders weren’t invited to the White House roundtable on college sports reform — their president expected “maybe a general discussion, a photo opportunity” — but they published their letter anyway.
Source: Chronicle of Higher Education, March 5, 2026 https://www.chronicle.com/article/we-are-in-a-crisis-why-louisvilles-leaders-are-proposing-a-cap-on-sports-spending
The broader financial data across major programs suggest Louisville isn’t an outlier.
(Full letter: https://mail.uofl.me/t/r-e-tkujjiid-l-y/)
Louisville isn’t alone in saying it out loud, either. Writing in his Substack this week, John Canzano talked to Boise State interim president Jeremiah Shinn, who put it plainly: switch out the numbers, and nearly every president and AD could have written the same letter. Shinn’s larger point is about who bears the cost when the system contracts. Programs in non-power conferences generate real economic and civic value for their communities, but there’s no clear pathway for them to earn higher status or more resources. The Big Ten and SEC make the rules, and when those rules widen the competitive gap, the gap gets cited as justification for the rules.
Miami (Ohio) AD David Sayler made the same point from the gym floor rather than the boardroom. His 30-0 team couldn’t get Power Four programs to schedule them — not because of a lack of interest on Miami’s end. They sent emails to Michigan State, Florida, Kansas, BYU, Illinois, and Nebraska. Most didn’t respond. One Power Four school said, essentially: not you guys. Sayler’s read: scheduling has become about risk mitigation, not competition. That’s not just a mid-major grievance. It’s a description of how the incentive structure actually works.
Sources: John Canzano, Bald Faced Truth, March 4, 2026
Front Office Sports https://frontofficesports.com/miami-oh-ad-david-sayler-scheduling-mid-majors/
Start at the very top of the market. Ohio State reported $336.1 million in athletic revenue in fiscal year 2025, the highest in program history. Expenses ran roughly $320 million, leaving a surplus of about $15.7 million.
Source: Andy Anders, Eleven Warriors, January 30, 2026 https://www.elevenwarriors.com/ohio-state-athletics/2026/01/161398/ohio-state-athletic-department-hauls-in-record-336-1-million-revenue-in-fiscal-year-2025
Texas is operating at similar altitude. Sportico reported that Texas set a new college sports spending record at $375.9 million in operating expenses in fiscal year 2025, a $50 million jump over the prior year. Arkansas AD Hunter Yurachek said this week that his program’s operating budget has grown by $75M to reach $200M — and still can’t keep up. “We’re never going to be Texas,” Yurachek said, “and we can’t try to be Texas.”
Sources: Daniel Libit, Sportico, January 29, 2026 https://www.sportico.com/leagues/college-sports/2026/texas-longhorns-spending-fy25-1234882184/
Arkansas AD Hunter Yurachek, Chuck and Bo Show, March 2026
At the very top of the distribution, scale begets scale. Revenue concentration enables further investment in facilities, coaching salaries, recruiting infrastructure, and brand amplification. The gap widens because the math compounds.
Now consider the next layer. Penn State athletics closed fiscal year 2025 with $534.7 million in athletics-related debt, more than triple the prior year, driven largely by the $700 million Beaver Stadium renovation. Florida State’s athletics debt reached $437 million in FY25, up roughly $200 million in a single fiscal cycle. Rutgers posted a record $78 million deficit in 2024-25 and has accumulated approximately $516.9 million in cumulative deficits since joining the Big Ten in 2014.
Sources:
Daniel Libit, Sportico, February 2026 https://www.sportico.com/leagues/college-sports/2026/penn-state-debt-beaver-stadium-1234883695/
Daniel Libit, Sportico, February 3, 2026 https://www.sportico.com/leagues/college-sports/2026/florida-state-athletics-debt-fy25-1234883293/
Keith Sargeant, NJ Advance Media, January 2026 https://www.nj.com/rutgersfootball/2026/01/rutgers-athletics-hits-record-78-million-deficit.html
These figures aren’t evidence of collapse. But they show reveal divergence. Some programs operate with annual revenues exceeding $300 million. Others carry substantial debt loads or run structural operating deficits. In that environment, “cost discipline” hits differently depending on where you sit in the distribution.
The downstream consequences are already visible. Since the House v. NCAA settlement was announced, at least 32 Division I Olympic sports programs have been cut. Schools have used the new $20.5M revenue-sharing obligation as justification — sometimes explicitly, sometimes not — to eliminate programs in swimming, track, wrestling, and volleyball. These aren’t programs that failed. They’re programs that lost a budget fight they weren’t allowed to win.
Source: Front Office Sports https://frontofficesports.com/dozens-of-olympic-sports-have-been-cut-in-wake-of-house-v-ncaa-settlement/
The Collective Action Problem
This is again where the political economy framework matters. Programs at the top have scale advantages and media revenue leverage. In the middle tier, institutions face competitive pressure to spend, on facilities, coaching contracts, NIL collectives, infrastructure, even when internal margins are thin.
If Texas spends $376 million, conference peers respond. If Ohio State operates at $336 million in revenue, competitive counterparts invest to keep pace. A school that restrains spending risks competitive decline.
That’s a collective action constraint. The incentive to escalate exists even when the margins don’t support it. And it metastasizes at the enforcement level. A power conference athletic director said it plainly this week: “The people following the rules are being punished and the people circumventing are being rewarded. We agreed to the House settlement because there was going to be a hard cap. There’s not.”
Source: Ross Dellenger, On3, March 2026, via Darren Heitner, Newsletter Image Likeness Vol. 174 https://www.linkedin.com/pulse/newsletter-image-likeness-vol-174-most-expensive-room-darren-heitner-9kuoe/
Rational actors, perverse aggregate outcomes. This is the same logic that drives litigation behavior and enforcement variance across the system.
Power Four conference distributions now exceed $40 million per school annually. Group of Five distributions remain in the single-digit millions. The directional shift since the early 2000s is unmistakable: media revenue concentration has accelerated, and competitive stratification has followed.
Source: Front Office Sports https://frontofficesports.com/big-ten-sec-congress-tv-deals/
Revenue concentration magnifies spending pressure. Spending pressure widens the gap between what a department earns and what it feels compelled to spend.
None of this signals imminent collapse, of course, but the structural strain is real. When a handful of programs exceed $300 million in annual revenue, when major programs carry half-billion-dollar debt loads, when mid-tier programs run recurring deficits, and when conference distributions diverge sharply, financial stress becomes systemic rather than episodic. Louisville’s letter is one data point in a much larger pattern.
Schools decry instability while escalating spending. Conferences warn about sustainability while maximizing media leverage. That looks a lot like hypocrisy from the outside.
The behavior makes sense within the system’s incentive structure. Institutions respond to relative positioning. Conferences protect distribution advantages. Schools hedge against competitive decline.
Which brings us to where things stood Friday. President Trump convened a college sports roundtable at the White House. The guest list was, by any measure, impressive: Tiger Woods. Nick Saban. Urban Meyer. Tony Dungy. NBA Commissioner Adam Silver. Fox Sports CEO Eric Shanks. ESPN chairperson Jimmy Pitaro. RedBird Capital’s Gerry Cardinale. Blackstone’s David Blitzer. All four Power Conference commissioners. Florida Governor Ron DeSantis. Senators Ted Cruz and Eric Schmitt. Former Secretary of State Condoleezza Rice. The agenda pushed hard for an NCAA antitrust exemption.
The meeting itself produced real signals. Trump said federal legislation is needed to let conferences set rules “without litigation and NIL state preemption” — or colleges will be “destroyed” financially. He also acknowledged he fully expected any executive order to end up in court: “We’ll be sued, and we’ll go before the courts, and here we go again.” House Speaker Mike Johnson said the SCORE Act has the votes and will get a third floor attempt. SEC Commissioner Greg Sankey offered the most efficient summary of the portal chaos the whole room was nominally there to fix: “I have a basketball player in my league on his sixth campus.” The legislative carousel is spinning.
Source: CNBC, March 6, 2026 https://www.cnbc.com/2026/03/06/trump-college-football-sports-congress.html
You know who wasn’t in the room? A single current college athlete.
Athletes.org — the players’ association for college athletes — released a statement that cut straight to it: “When the very people whose talent, labor and livelihoods power this entire ecosystem are absent from the conversation, it raises a fundamental question: how can decisions about the future of college athletics be made without the voices of the athletes themselves?” Their answer was unambiguous: “If there is a real conversation about fixing college sports, it will start with us at the table and it will end with one thing: a fully negotiated collectively bargained agreement, where we, the athletes, negotiate the terms of our participation.”
Source: Athletes.org, March 5, 2026 https://www.athletes.org/news/athletes-org-college-athletes-respond-to-lack-of-athlete-representation-in-the-white-house-college-sports-roundtable/
The antitrust exemption push faces significant headwinds regardless. Sportico’s legal analysts note that more than 40 college sports reform bills have been introduced in Congress since 2020, and none has advanced, under either party. Antitrust exemptions are narrow by design, unpopular in the legal community, and wouldn’t resolve the separate question of whether college athletes can organize as employees. As Heitner writes, handing the NCAA an antitrust exemption doesn’t fix college sports — it immunizes the entity most responsible for the dysfunction.
Source: Michael McCann and Eben Novy-Williams, Sportico, March 4, 2026 https://www.sportico.com/law/analysis/2026/ncaa-antitrust-exemption-push-trump-council-hurdles-1234886076/
The question is whether the system’s payoff structure remains financially and politically sustainable, and whether any governance mechanism, legislative, judicial, or negotiated, can hold across the conferences and programs now pulling in very different directions. Louisville’s spending cap proposal reflects one institution’s conclusion that the current structure may not hold. The Trump commission reflects the establishment’s bet that federal intervention might, even if it’s unlikely. And athletes.org’s statement from outside the room reflects a third conclusion: that none of it holds without the people who actually play.
Whether any of them are right, the balance sheets are already telling us something worth hearing.
Further Reading:
How Collective Bargaining Could Stabilize College Football https://kylesaunders.substack.com/p/how-collective-bargaining-could-stabilize
Litigation as Governance in College Athletics https://kylesaunders.substack.com/p/litigation-as-governance-in-college
Enforcement Is the Real Collective Action Problem https://kylesaunders.substack.com/p/enforcement-is-the-real-collective
Incentives, Not Hypocrisy, Explain What We’re Seeing in College Sports https://kylesaunders.substack.com/p/incentives-not-hypocrisy-explain
The balance sheets for everyone below the ~top 50 budgets would improve if they would just drop football (with which they cannot effectively compete "at the highest level") and focus the institutional dollars they put toward this extracurricular activity to basketball and others (vary regionally) where they can.