Kentucky’s Decision to Operate Its Athletic Department as an LLC Could Provide a Model That Other Schools Use in This New College Sports Era
In a groundbreaking shift, the University of Kentucky has announced it will operate its athletic department under a new LLC called Champions Blue, signaling what many believe could be the future model for major college sports programs. Traditionally run as nonprofit arms of universities, athletic departments are now forced to evolve in light of NIL (Name, Image, and Likeness), the transfer portal, and upcoming revenue-sharing rules.
“We have to find new ways to generate revenue, manage expenses, and think about opportunities to grow,” said UK Athletic Director Mitch Barnhart in a statement.
Flexibility for Revenue Growth and Strategic Investment
Kentucky’s LLC approach will allow for public-private partnerships, loans, real estate investments, and more streamlined fundraising. With direct player payments set to begin in July, this structure gives Kentucky more flexibility to handle increasing expenses without relying entirely on third-party NIL collectives.
“Starting in July, athletic departments need real cash flow to fund NIL and [revenue] share,” said Blake Lawrence, co-founder of Opendorse. “Structuring as an LLC provides flexibility.”
Real Estate and Media Deals on the Table
Kentucky’s Champions Blue may also explore real estate development around high-traffic areas like Rupp Arena and Kroger Field to generate long-term revenue. In a recent example, the university acquired two hospitals through similar holding structures—pointing to a trend of universities thinking like businesses to sustain athletic competitiveness.
Meanwhile, with athletic departments like Kentucky’s only finishing the year with razor-thin surpluses, offers like ESPN’s potential $50–80 million annual media bump for an extra SEC football game are increasingly attractive.
A Model Other Universities May Soon Follow
Financial experts are calling this LLC transition a game-changer in how college sports might be funded moving forward. Beyond just streamlining NIL funding, the model opens the door for external investments and even private equity, which many believe is the next inevitable step in college athletics.
“The most significant financial impact of the LLC format is the ability to take external investment,” said Jesse Silvertown, principal at The Ledge Company. However, regulatory questions remain, including how such partnerships will align with federal laws like Section 117 of the Higher Education Act, which monitors large foreign investments.
Even so, Kentucky’s Champions Blue may be the first of many—ushering in a new business era in college sports.
