UNC Board of Governors warned about financial sustainability of university athletics

It’s been 15 months since the landmark House v. NCAA (opens in a new tab) settlement received final court approval, paving the way for Division I schools to compensate student-athletes directly. The revenue-sharing framework of that deal set a $20.5 million cap per school for university athletics in 2025-26. That figure is only expected to grow in the coming years.

Members of the UNC Board of Governors finance committee worried Wednesday that athletics spending is growing faster than the revenues the programs generate, and schools will have to cover the balance.

UNC System President Peter Hans said while athletics often represent the “front porch” of a university, the changing national landscape around athletics may be financially unsustainable.

“There’s a key paradox here, because most people would agree the college athletics model has never been more broken. And yet, it has never been more popular,” Hans told board members.

Hans said every university president and chancellor across the country that he has spoken with is feeling this new pressure.

“You don’t have to be an economist to figure out that those who spend the most will generally win the most games,” said Hans. “That’s why I’m hoping this will be the start of a conversation amongst the board members about how we can remain competitive in athletics, but not at the expense of the academic mission.”

Sustaining what matters

Kirk Bradley, who chairs the board’s committee on budget and finance, said before talking about cost, he wanted to be sure everyone was clear about the value athletic programs deliver.

“A few years ago, we documented how athletics generated more than $1.1 billion a year in estimated economic impact across North Carolina. That figure is likely closer to $1.5 billion today,” said Bradley.

He said athletics anchor alumni identity, open doors for philanthropy, and attract future students to UNC campuses.

“The question this board will wrestle with is never whether athletics matter,” said Bradley. “It is how we sustain what matters on a sound financial footing.”

Bradley said collectively, university athletics generated $412 million in the 2024 fiscal year for the UNC system through ticket sales, media and private giving, but they come with obligations and risks.

“We should be cautious about assuming that athletic success will produce sustained enrollment growth,” Bradley said. “Winning may increase visibility, but sustained enrollment gains are not guaranteed.”

Bradley said as financial pressures grow, universities may need to consider new fees, ticket surcharges, private equity, or separately organized entities.

Josh Lassiter, the UNC System’s vice president for financial health and strategy, said nationally, athlete compensation is projected to exceed $4.5 billion this year.