Kentucky planning overhaul of college athletics department into new school corporate entity

USA Today

24-04-2025

Kentucky planning overhaul of college athletics department into new school corporate entity
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How coaches salaries and the NIL bill affects college football
Dan Wolken breaks down the annual college football coaches compensation package to discuss salaries and how the NIL bill affects them.
Sports Pulse
The University of Kentucky is moving toward housing its athletics department under a new university corporate entity that school officials say will improve their flexibility to handle rising financial pressure from the proposed settlement of three athlete-compensation antitrust cases against the NCAA and Power Five conferences and related demands.
Kentucky athletics director Mitch Barnhart and the university's executive vice president for finance and administration, Eric Monday, said they were unsure of whether the new entity – being called Champions Blue LLC – would be unique in college sports. But they said that, within the school's structure, it is being modeled on entities under which its hospitals and other medical services enterprises are housed.
Implementation of the new athletics structure is pending approvals from the Kentucky board of trustees' athletics committee, which was meeting April 24, and the full board, which is scheduled to meet April 25.
Kentucky's athletics department had nearly $202 million in operating revenue and nearly $197 million operating expense in its 2023-24 fiscal year, according to the annual financial report it submits to the NCAA. That puts the Wildcats among the top 15 publics schools in both categories, according to data compiled by USA TODAY Sports in conjunction with its partnership with the Knight-Newhouse College Athletics Database at Syracuse University.
Barnhart said the athletics department estimates that its expenses for the 2025-26 fiscal year will increase by around $50 million because of the proposed class-action settlement, which failed to receive final approval from a federal judge on April 23 – although the judge is giving the principals 14 days to work out issues related to a component of the deal that the judge ruled is unfair to a sizable group of athlete plaintiffs.
If approved, Division I schools would be able to start paying athletes directly for use of their name, image and likeness (NIL), subject to a per-school cap that would increase over time and be based on a percentage of certain athletics revenues. In addition, the NCAA's current system of team-by-team scholarship limits would be lifted and athletes would continue to be allowed to have NIL deals with non-school entities.
Barnhart and Kentucky spokesman Jay Blanton said the estimated $50 million increase in expenses comes from its expected NIL payments to athletes (likely $20 million to $23 million), an increase in the number of athletic scholarships it awards ($4 million to $5 million), inflation, spending by the school in connection with efforts it can make to assist athletes with outside NIL deal and an expected loss of sponsorship revenue from companies that instead choose to make NIL deals with athletes.
Monday and Barnhart said that the new entity would allow the athletics department to undertake a variety of business development opportunities and to offer pay and benefit programs to employees – and potentially to athletes – that it cannot under current university policies or cannot do so in an efficient manner.
Barnhart and Monday mentioned public-private partnerships and a number of athletic facility and fan-experience projects.
'You've heard other departments talk about business districts and things like that,' Barnhart said. 'And those are conversations that are all on the table but really difficult to perform in our current structure. And so this gives us more flexibility to do that.'
Wake Forest, Oklahoma and Kansas are among schools working on mixed-use projects that include new or refurbished athletics facilities.
'We've got some ideas on some things that we're going to have to run the run the traps on, so to speak, to say, 'Hey, does this work? Does it make sense? Can it produce the things we think are necessary for us to move forward?' Barnhart said. 'I do know this … in the old way of life, there were literally four to five buckets that you got all of your revenue from. We're going to have those four to five buckets become eight to 10 buckets, and we're going to have to figure out other ways to do our work.'