College athletics is a big business. In fact, it’s probably never been a bigger business.
But college athletics is also not a business.
Confused? I don’t blame you. But stick with me for a second.
The point of a business, be that McDonald's, Nationwide Insurance, or the Utah Jazz, is to generate a profit. All that money left over from paying salaries and expenses? Sure, you can reinvest some of that, but it can also be pocketed as profit for the owners and investors.
You can’t really do that in college sports. There’s no owner. The athletic departments themselves are configured as non-profits, and if they want to keep that tax exemption, they have to at least pretend like that's what they are. Nobody is trying to make a profit, there are no investors to pay. The “profit” is in winning championships and keeping donors happy.
So that leads to a weird, hybrid industry. On one hand, college athletics is very much a mature industry, one that can generate hundreds of millions of dollars in revenue from broadcast rights, ticket sales and licensing fees. Athletic departments make key strategic decisions with revenue in mind, and they heavily compete against each other.
But on the other hand, it’s also tied to higher education. They don’t pay salaries to any of the athletes (at least, not yet), they have to run dozens of other athletic programs that may not have commercial appeal, and much of the legal and regulatory environment that supports and defines other businesses only sort of applies to college sports.
So that makes this world difficult to understand. Throw in legal challenges coming from antitrust, Title IX and labor classification, the House settlement that will finally allow schools to pay athletes directly, the transfer portal, NIL, conference realignment and everything else…and even the people who work in this industry are confused.
That’s where I come in.
Extra Points is here to cover the off-the-field stuff that shapes college athletics, from the Ohio States to the Ohio Dominicans. Four days a week, I’m writing about public policy, TV deals, NCAA administrative changes, and much more.
But before we get to all of that, we want to start with the basics. Here, I’ve written out a brief overview on how athletic departments earn (and spend) money, how NIL (real and fake) works right now, how shoe contracts work, and a few other major college sports topics:
Trying to explain everything in the depth it deserves doesn’t make sense here. That would be a book. Maybe I’ll get around to writing it some day.
But today, you can enjoy the Cliff Notes. I hope this helps clarify some of how this crazy industry works, and helps you become a more informed fan. And if you enjoy it, I bet you’ll love Extra Points.
Thanks for reading. I hope to see you around the internet.
-Matt Brown
Founder and Publisher
Extra Points
