The Price of College Sports — Part I: How Did We Get Here? From Amateurism to Revenue Sharing

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.

But before deciding whether college athletics is financially broken—or who is responsible—we need to understand the entire economic picture.

In this three-part Hoosier Tailgate investigation, The Price of College Sports, we’ll examine how the system reached this point, follow the money through Power Four athletic departments, and ultimately examine who should make the rules governing the future of college athletics.

• Part I — How Did We Get Here? From amateurism to NIL, the transfer portal and revenue sharing.
• Part II — Follow the Money. Are Power Four athletic departments really losing money, and what do the financial reports actually tell us?
• Part III — Who Makes the Rules? Congress, the NCAA, conferences, universities and athletes—and the fight over what comes next.

The objective isn’t to start with an answer. It’s to follow the money, examine the history and understand what the evidence actually tells us.

College athletics did not suddenly become expensive when NIL arrived.

It did not suddenly become a business when athletes began earning money.

And the financial pressure athletic departments are talking about today did not begin with the transfer portal.

Long before a quarterback could sign an endorsement agreement, long before NIL collectives became part of recruiting and long before schools could pay athletes directly, major college athletics had already developed into a multibillion-dollar enterprise built around television contracts, ticket sales, sponsorships, donations, facilities, coaching salaries and an increasingly expensive competition to win.

That’s important to remember as college sports searches for someone—or something—to blame for its current financial predicament.

Because if we’re going to understand where college athletics is going, we first have to understand how it got here.

The Money Changed Before the Rules Did

For decades, the basic economic bargain of college athletics was straightforward.

Universities provided scholarships and other benefits. Athletes competed for their schools. The NCAA maintained rules limiting compensation, while universities, conferences, television networks and sponsors built an increasingly valuable entertainment product around those athletes.

As television money grew, schools competed for an advantage:

• Better facilities
• Larger coaching staffs
• Higher salaries
• More recruiting resources
• More analysts and support personnel
• Better training, nutrition and player-development infrastructure
• Bigger coaching buyouts when those investments didn’t produce enough wins

The spending escalation predates NIL by decades.

Consider what the NCAA was reporting all the way back in 2013. Among the highest-resource FBS conferences, median athletic department expenses had already reached $81.7 million. Between 2004 and 2013, median generated revenue at FBS schools increased 83.2%, while expenses increased 114.6%.

Expenses were already growing substantially faster than generated revenue years before athletes could monetize their names, images or likenesses.

NIL changed who could participate economically in college athletics. It did not invent the spending race.

The legal foundation underneath that system was also beginning to change.

Ed O’Bannon’s antitrust litigation challenged NCAA restrictions preventing athletes from receiving compensation for use of their names, images and likenesses. In 2015, the Ninth Circuit held that those restrictions were subject to antitrust scrutiny.

Then came NCAA v. Alston.

On June 21, 2021, the Supreme Court unanimously affirmed a lower-court judgment preventing the NCAA from limiting certain education-related benefits available to Division I football and basketball players.

That distinction matters. Alston did not simply create unrestricted athlete compensation. But it represented another major legal challenge to NCAA compensation restrictions.

Nine days later, the NCAA adopted its interim NIL policy. On July 1, 2021, college athletics entered a different economic era.

NIL Started as One Thing—and Became Something Else

The phrase itself sounds simple: Name. Image. Likeness.

The original concept is easy to understand. An athlete possesses commercial value because a business wants to use that athlete’s identity.

• Appearing in a local advertisement
• Signing autographs
• Promoting a company on social media
• Running a youth camp
• Licensing a name or image for merchandise

That’s NIL in its most recognizable form.

But the marketplace that developed around major college football quickly became considerably more complicated.

Outside organizations and collectives raised money associated with athletic programs. Compensation became increasingly intertwined with roster acquisition and retention. Recruiting conversations changed. Transfer decisions changed. And the economic value of keeping a productive player on a roster became increasingly difficult to separate from the NIL marketplace surrounding that player.

NCAA rules continued attempting to distinguish legitimate NIL compensation from impermissible pay-for-play and recruiting inducements, and the NCAA issued additional guidance addressing institutional and third-party involvement.

But the fundamental distinction was becoming increasingly difficult to ignore.

• “We want to pay you because your name, image and likeness can help our business.”
• “We want to pay you because you can help our football team win.”

For several years, both concepts existed beneath the broad public label of NIL.

At the same time, player movement was changing.

The combination of easier transfers and an expanding compensation marketplace created something college football had never really experienced at this scale before: an annual market for proven college football players.

Programs weren’t merely recruiting high-school prospects anymore. They were recruiting other college rosters. And retaining your own roster became another form of recruiting.

That increased the economic competition between programs—but once again, it occurred inside an industry that was already spending aggressively in pursuit of wins.

House Changed the Equation Again

The next major transformation came through the House v. NCAA settlement.

The agreement resolved three antitrust class actions and included approximately $2.78 billion in back damages, payable over 10 years. More important to the future structure of college athletics, it created a system under which participating Division I schools could provide athletes direct financial benefits.

The federal court approved the settlement on June 6, 2025.

For the 2025–26 academic year, participating schools could provide up to approximately $20.5 million in direct financial benefits to athletes under the new framework. The rules took effect July 1, 2025.

That distinction is critical to understanding where college sports stands today.

For years, much of the money associated with athlete compensation existed outside an athletic department’s traditional operating ledger through third-party NIL arrangements and collectives. Now schools themselves can make direct payments.

College athletics has therefore progressed through three dramatically different compensation structures:

• Scholarships and traditional benefits
• Scholarships + third-party NIL
• Scholarships + third-party NIL + direct institutional compensation

That changes the economics considerably.

It may also eventually allow NIL to become closer to what the term originally described.

If schools can directly compensate athletes within the new system, there is less reason to pretend every dollar associated with roster value is necessarily payment for appearing in an advertisement or promoting a product.

Real third-party NIL can exist. Direct athlete compensation can exist, too.

Those are different economic transactions, even if college athletics spent several years treating them as though they were essentially the same thing.

What Does “Losing Money” Really Mean?

This brings us to the question at the heart of this series.

College athletic leaders increasingly warn that the current financial model is under enormous pressure. There is evidence supporting that concern. But we need to be very careful with the terminology.

The NCAA requires member institutions to report athletics operating revenue, expenses and capital expenditures annually, with Division I financial data subject to agreed-upon procedures performed by independent accountants. The NCAA’s public financial reporting, however, generally presents aggregate rather than institution-by-institution results.

And not every dollar flowing through the broader college sports economy appears in the same accounting category.

• Athletic-generated revenue
• Conference and media distributions
• Ticket sales
• Sponsorships and licensing
• Donor contributions and athletic fundraising
• Institutional or government support
• Capital gifts
• Student fees at some institutions
• Direct athlete compensation
• Third-party NIL money that historically could exist outside the athletic department’s books

So when someone says an athletic department “lost money,” my first question is: What exactly are we counting?

That’s where Part II of this series is headed.

Because this isn’t simply a revenue question. It’s also a spending question.

College athletics has repeatedly demonstrated an extraordinary ability to generate more money—and then find new ways to spend it.

The NCAA’s historical numbers show this isn’t a new phenomenon. More than a decade before schools began sharing revenue directly with athletes, expense growth was already outpacing generated-revenue growth among FBS athletic departments.

So before concluding that paying athletes has made the system financially unsustainable, we need to examine the entire ledger.

That means looking beyond the headline number and examining:

• What the athletic department actually generated
• How much donors contributed
• How much the university provided
• Where expenses increased
• What schools spent chasing competitive success
• How much of today’s new athlete-compensation expense represents an entirely new cost versus money that previously moved through the outside NIL ecosystem

Which leads to an uncomfortable question: Does major college athletics really have a revenue problem—or has it spent decades developing a cost-control problem?

Coach Griff’s Take

I’ve spent most of my adult life around college football.

And when I look at where the sport is today, I don’t believe you can start this story in 2021. You have to go back further.

College athletics built bigger facilities. It expanded staffs. Salaries increased. Recruiting became more expensive. Schools invested in every conceivable competitive advantage because winning matters.

And there was a reason they did it.

• More attention
• Better attendance
• Greater donor engagement
• Stronger fundraising
• Increased sponsorship opportunities
• More valuable media exposure
• Greater institutional pride

Then the courts began forcing college athletics to reconsider who was allowed to share in the enormous amount of money the industry was generating.

That doesn’t mean every change has been handled perfectly. NIL wasn’t. The transfer environment hasn’t been. Revenue sharing won’t be.

But blaming athletes for the financial pressure facing college sports ignores decades of financial decisions made before athletes ever received a meaningful share of the economics.

That’s why Part II is where this investigation becomes especially interesting.

We’re going to follow the money—not just revenue and not just expenses.

We’ll examine fundraising, institutional support, ticket revenue, media distributions, recruiting expenses, coaching costs and athlete compensation.

And we’re going to use Indiana and Purdue as an important test case—two public universities in the same state, competing in the same conference and economic environment, but experiencing very different recent football trajectories.

Then we’ll widen the lens to the rest of the Power Four.

Because before we decide that the financial model of college athletics is broken, we need to understand what the numbers actually mean.

COMING IN PART II: Are Power Four Athletic Departments Really Losing Money?