The Price of College Sports — Part II: Are Power Four Athletic Departments Really Losing Money?

About This Series

College sports is undergoing the most significant financial transformation in its modern history. Athletes can earn NIL income, schools are now sharing revenue directly with players, athletic departments say costs are escalating, and Congress is debating what rules should govern the system going forward.

In this three-part Hoosier Tailgate investigation, The Price of College Sports, we are examining how the system reached this point, following the money through Power Four athletic departments, and then asking who should make the rules governing the future of college athletics.

If you missed it, Part I — How Did We Get Here? From Amateurism to Revenue Sharing traces the history that brought college sports to this point.

Part II asks a deceptively simple question: When an athletic department says it is losing money, what exactly does that mean?

There is no shortage of money in major college athletics.

There are television contracts worth billions. Ticket sales. Sponsorships. Licensing. Donations. Premium seating. Conference distributions. Capital gifts. University support. And now, beginning with the House settlement era, direct compensation to athletes.

Yet one of the most common descriptions of the current college sports economy is that athletic departments are financially strained, operating in the red, or facing an unsustainable model.

That can be true. But the answer depends heavily on which money is counted as revenue, which support is treated as a subsidy, which expenses are recurring, and which costs were voluntarily added in the pursuit of competitive success.

So for Part II, we are not starting with the conclusion that college athletics is either financially healthy or financially broken.

We are starting with the books.

What Does “Losing Money” Actually Mean?

The first problem is terminology.

The Knight-Newhouse College Athletics Database, which uses NCAA financial reporting data from public institutions, separates athletic revenue into categories that include ticket sales, donor contributions, conference and media distributions, sponsorship and licensing, institutional or government support, student fees and other revenue.

That distinction matters because an athletic department can report total revenue that matches or exceeds total expenses while still receiving millions of dollars from the university itself.

In other words, two statements can both be true:

• An athletic department balanced its reported budget.
• The athletic department did not generate enough outside athletics revenue to cover that budget without institutional support.

That is why the phrase “lost money” needs context.

A recent snapshot released by U.S. Sen. Maria Cantwell’s office reported that only 14 of 53 publicly reporting Power Four athletic departments generated enough athletics revenue to cover expenses in 2024–25, and that 94 percent of Division I programs spend more than they generate. The report also said institutional and government support to 53 Power Four programs was about $520 million higher in 2025 than in 2015. Those findings reflect the report’s generated-revenue framework and should not be confused with total accounting revenue that can include university support. [Cantwell snapshot report]

This is not merely a post-NIL problem. The NCAA reported more than a decade ago that from 2004 through 2013, median generated revenue at FBS schools increased 83.2 percent while expenses increased 114.6 percent. [NCAA]

The spending race was already outrunning the revenue race long before athletes were allowed to earn NIL income.

The Indiana–Purdue Test

Indiana and Purdue provide a useful test case because they share several important characteristics.

• Both are public universities in Indiana.
• Both compete in the Big Ten.
• Both receive essentially the same conference-media environment.
• Both sponsor major Division I athletic departments.
• And during the 2024 football season contained inside the 2025 fiscal reporting year, their football results could hardly have been more different.

Indiana finished 11-2, reached the College Football Playoff and packed Memorial Stadium during Curt Cignetti’s first season. Purdue finished 1-11 and 0-9 in the Big Ten. [Indiana Athletics] [Purdue Athletics]

If winning automatically solves the financial equation, we should expect the financial statements to show a dramatic separation.

They do show differences. But not always the differences you might expect.

FY2025: Indiana

According to Knight-Newhouse data, Indiana reported approximately $183.4 million in total athletic revenue and $173.0 million in expenses for fiscal year 2025 — a reported surplus of about $10.4 million. [Knight-Newhouse: Indiana]

• Conference/NCAA distributions, media rights and postseason football: $80.6 million
• Ticket sales: $29.6 million
• Donor contributions: $26.4 million
• Corporate sponsorship, advertising and licensing: $11.3 million
• Institutional/government support: $27.95 million

That final number is essential.

If the roughly $27.95 million in institutional/government support is removed from Indiana’s reported revenue, the remaining revenue is about $155.5 million against $173.0 million in expenses — a gap of roughly $17.5 million.

That does not mean Indiana improperly reported a $10.4 million surplus. It means the meaning of that surplus depends on whether institutional support is treated as ordinary athletic revenue or as university support needed to balance the enterprise.

The football turnaround still mattered. Indiana’s fiscal-year report showed football ticket sales rising to about $12.7 million and football media-rights revenue increasing to roughly $47.1 million. TheHoosier.com reported that the department’s overall revenue reached a record $183.4 million. [TheHoosier.com]

Winning created real economic value.

But it did not erase the importance of institutional support.

FY2025: Purdue

Purdue reported approximately $150.5 million in total athletic revenue and $149.7 million in expenses — effectively breaking even with a surplus of less than $1 million. [Knight-Newhouse: Purdue]

• Conference/NCAA distributions, media rights and postseason football: $77.7 million
• Ticket sales: $23.6 million
• Donor contributions: $27.7 million
• Corporate sponsorship, advertising and licensing: $9.2 million
• Institutional/government support: $0

That is where the comparison becomes especially interesting.

Indiana’s total reported revenue was nearly $33 million higher than Purdue’s. But almost $28 million of Indiana’s total came from institutional/government support. Remove that category and the gap between the two departments’ remaining revenue was only about $5 million.

Even more striking: Purdue reported slightly more donor contribution revenue than Indiana in FY2025 — about $27.7 million to $26.4 million — despite a 1-11 football season.

That does not mean winning is financially unimportant. Indiana’s ticket and media growth clearly show otherwise. It means football success is one variable inside a much larger economic system, not a magic switch that immediately transforms every line of an athletic department’s financial statement.

The Winning Dividend—and the Losing Liability

Winning can produce what I would call a winning dividend.

• More tickets sold
• Higher demand for premium seating
• Greater donor engagement
• More merchandise and licensing activity
• More media exposure
• Better sponsorship opportunities
• Potential postseason revenue

But losing can create a losing liability too.

• Coaching buyouts and severance
• New-staff hiring costs
• Pressure to increase recruiting spending
• Facility upgrades designed to “catch up”
• Reduced ticket demand
• Additional donor pressure

And that creates one of the recurring paradoxes of major college sports: when a program loses, the response is often to spend more money in an effort to stop losing.

Indiana’s 2025 expense report included $38.2 million in total coaches compensation, $21.6 million in non-coaching athletic staff compensation and $44.3 million in facilities, debt service and equipment. Purdue reported about $28.0 million in coaches compensation, $27.2 million in non-coaching staff compensation and $33.0 million in facilities, debt service and equipment.

Those are not athlete NIL payments. They are part of the traditional cost structure that developed before direct revenue sharing arrived.

And both schools’ long-term numbers show the escalation. From 2020 to 2025, Indiana’s total athletic expenses increased 44 percent, while Purdue’s increased 49 percent. Over that same period, Indiana’s football coaching salaries increased 89 percent; Purdue’s increased 24 percent. [Indiana data] [Purdue data]

The Most Important Caveat: Revenue Sharing Is Not Yet in These Numbers

There is another reason we should be careful when using FY2025 data to describe the new economic crisis in college sports.

The House settlement revenue-sharing system did not take effect until July 1, 2025.

The Knight-Newhouse database notes that FY2025 concluded before implementation of the House settlement and that only a small number of institutions reported direct institutional NIL/revenue-share payments in that fiscal year, generally where state law already allowed them. Indiana and Purdue each reported $0 in the new “Institutional NIL Revenue Share” category for FY2025. [Knight-Newhouse FAQ]

That means the financial statements we have today are mostly a pre-revenue-sharing baseline.

Schools are now layering direct athlete compensation onto an expense structure that was already enormous.

That may create legitimate financial stress. But the historical record also makes something else clear:

College athletics was increasing spending faster than generated revenue long before athletes received direct institutional compensation.

So Is College Athletics Really Losing Money?

The answer is not a clean yes or no.

Some athletic departments require substantial institutional support. Some generate enough athletics revenue to cover operating expenses. Others sit somewhere in between, depending on how donor money, capital projects, debt service and university support are classified.

What the data does show is that the industry has created a remarkably elastic definition of what it needs to spend.

When new television money arrives, spending increases. When donor money increases, spending increases. When competitors add staff, facilities or recruiting resources, others often respond in kind.

That is why simply saying “athletic departments are losing money” does not tell us enough.

We have to ask:

• How much revenue did the department actually generate?
• How much came from donors?
• How much came from the university or government?
• How much was spent on coaches, staff, facilities and recruiting?
• How much debt is being carried?
• How much of the new athlete-compensation expense is truly new money?
• And how much reflects money that previously moved through outside NIL organizations rather than institutional books?

Coach Griff’s Take

I keep coming back to one question.

Does college athletics have a revenue problem—or a cost-control problem?

The answer may ultimately be some of both.

There are schools relying on significant university support. There are athletic departments facing real new obligations from revenue sharing. Non-revenue and Olympic sports have legitimate financial concerns. And there are institutions whose athletic economics look very different from Ohio State, Texas or Georgia.

But major college athletics also spent decades building an arms race before athletes received a direct share of the revenue.

Coaching salaries rose. Staffs grew. Facilities became more elaborate. Recruiting operations expanded. Buyouts became routine. Every competitive advantage came with another price tag.

Indiana and Purdue illustrate why simplistic conclusions do not work.

Indiana won at an historic level in 2024, increased football-driven revenue and reported a $10.4 million department surplus — while also receiving nearly $28 million in institutional/government support.

Purdue went 1-11 and still essentially balanced its athletic budget without reported institutional/government support.

Those two financial statements do not prove that winning is irrelevant or that one model is superior.

They prove that the economics of college athletics are more complicated than the scoreboard — and more complicated than the phrase “we’re losing money.”

Which takes us directly to Part III.

If the current system is expensive, legally vulnerable and increasingly difficult to govern, who should have the authority to set the rules?

COMING IN PART III: Congress, the NCAA or the Athletes: Who Should Make the Rules?

Data note: Financial figures in this story are drawn primarily from the Knight-Newhouse College Athletics Database, which compiles NCAA financial-reporting data for public institutions. FY2025 generally covers the fiscal year ending June 30, 2025. Institutional/government support is reported as a revenue category in the database; third-party NIL compensation is not included. Figures are rounded in the story for readability.