Cash-hungry college sports programs are starting nonprofits to make money to stay competitive
NEW YORK (AP) — University of Louisville athletic director Josh Heird says there is no “silver bullet” that will help his department’s current revenue race. To compete in the increasingly commercialized world of college sports,…
The University of Louisville's athletic department is grappling with a revenue race in the highly commercialized world of college sports. To stay competitive, Louisville's athletic department might spend over $40 million annually, according to experts. However, only football and men's basketball generate revenue for the department, out of its 23 sports.
To bridge this spending gap, Louisville has launched a new nonprofit organization called Cardinal Ventures. The nonprofit's purpose is to leverage the university's brand to create new revenue streams, which will help the department keep up with the multibillion-dollar market surrounding athletes' names, images, and likenesses. Similar initiatives have been launched by the University of Kentucky, the University of North Carolina, and Louisiana State University.
This trend of creating offshoot nonprofits to generate revenue is gaining "feverish" interest in higher education, as highlighted by Clay Grayson, a lawyer who designed Clemson University's in-house venture. However, this development is raising concerns from Congress, who fear that widespread privatization could transform universities into profit-driven businesses similar to professional sports franchises.
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