ARLINGTON, Va . (7News) — Monday night’s College Football National Championship between the University of Miami Hurricanes and the Indiana University Hoosiers is the stuff Hollywood movies are made of.
Until recently, the Hoosiers had more losses on the football field than any NCAA Division I team in history. Indiana has never played for a football national championship. The program’s last meaningful finish came during a loss in the 1967 Rose Bowl.
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While much of the attention during Indiana’s storybook run to the title game has been placed on the team’s old-school coach, Curt Cignetti, and his Heisman trophy-winning quarterback, Fernando Mendoza, less discussed is the fact that Indiana football went from being a financial lightweight in the cash-rich Big Ten conference to a free-spending heavyweight in a matter of five years.
In 2019, Indiana spent $24 million on football, well below the Big Ten conference average of $36 million, according to the Knight Newhouse database compiled by Syracuse University. In 2024, total operating expenses for the Indiana football team topped $61 million, well above the conference average.
Yes, the Hoosiers’ feel-good undefeated season has to do with coaching and quarterbacking. But it also speaks volumes about the influence of money on collegiate athletics and comes at a time when college football’s financials are receiving the attention of federal lawmakers like never before.
Troubled by the spending wars on college gridirons, in October, Republican Rep. Michael Baumgartner of Washington introduced the PROTECT Act, a bill that would ban private equity firms from investing in collegiate athletics.
“If it just goes to a private equity model where it’s just the big guys that get the funds, you know, then you’re going to see the little guys either have to split off or not be able to keep up,” Baumgartner told 7News in a recent interview.
Last month, the University of Utah struck a deal with Otro Capital, a New York-based private equity firm that specializes in sports media and entertainment investments. School officials explained that the public-private partnership would help its athletic programs compete in an era where universities can now pay athletes.
Otro Capital’s first-of-its-kind deal with Utah is reportedly worth $500 million and essentially means private investors now own a stake in a public university’s athletic department, although Utah structured the deal to maintain operational control.
A $2.4 billion private equity deal between the University of California’s pension fund and the Big Ten Conference was put on hold late last year after the University of Michigan and the University of Southern California reportedly pushed back on the venture.
One could argue Baumgartner’s concerns about the rich getting richer have already been realized.
A report released last September by the U.S. Senate Committee on Commerce, Science and Transportation revealed that the revenue gap between smaller college athletic programs — the so-called Group of Five conferences — and the larger Power 5 conference schools grew from $6 million per school in 2002 to more than $43 million by 2023.
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According to the Senate report, “the average school in a power conference received $47.3 million in TV revenue distribution in 2023, nearly 12 times more than competitors in lower-tier Football Bowl Subdivision conferences.”
“How much would people enjoy the NFL if the NFC East had a three times salary cap than the AFC West?” Baumgartner asked. “You know, eventually the AFC West teams would say, ‘What are we doing here? We can’t compete at this level.’”
“I don’t think the gap is as dangerous as just the sheer number. Do we really want schools spending this much money to try to put together a football team for one year?” said Gabe Feldman, director the sports law program at Tulane University and legal analyst for the NFL Network.
Feldman explained that even resource-rich schools like the University of Virginia and the University of Maryland risk falling further behind schools in their respective conferences.
Revenue sharing in the Atlantic Coast Conference, home to the Virginia Cavaliers, is partially based on television ratings. For instance, schools like Florida State and Clemson, which had many of the most-watched games during the 2023-2024 season, received a larger slice of the television revenue pie than Virginia, which had zero games in the top 100 most-watched games of that season.
Maryland had only two top-rated games during the 2023-2024 season, well behind conference leaders Ohio State, Michigan and Penn State. While the Big Ten conference current divides television evenly, Feldman says the trend, particularly if private equity is involved and looking for a return on investment, is not favorable for lower-tier schools.
“The data is pretty clear, which schools drive the greatest ratings, and with all due respect to Maryland and Virginia and lots of other schools in the country, it’s not them,” Feldman said.
Similar concerns revolve around the protection of Olympic sports at the collegiate level.
Last month, Massachusetts Democratic Representative Lori Trahan introduced the College Athletics Reform Act, which includes a more balanced distribution of television revenue between schools.
“If we’re going to make college athletics more sustainable, more enduring for more people, then we have to really reform and modernize the Sports Broadcasting Act so that more schools can pool their media revenue,” Trahan said.
Trahan, a former Division I volleyball player at Georgetown, understands the impact of college sports – and said she wants to make sure those opportunities aren’t lost for athletes at smaller schools.
“I grew up in a family that lived paycheck to paycheck. When I would talk to my parents about where I wanted to go to school, it was a stressful conversation because we couldn’t afford it,” Trahan said. “It changed the trajectory of my life. It allowed me to go to the school of my dreams and continue playing volleyball.”
There’s an unfortunate irony playing out these days in collegiate athletic programs. Top universities are awash in cash and athletes are benefiting like never before, but there are also fewer opportunities to compete.
Since May 2024, according to the Senate report, 41 Division I Olympic programs, sports like volleyball and track and field, have been cut, affecting some 1,000 college athletes.
NCAA programs traditionally serve as the training ground for U.S. Olympians. At the 2024 Paris Olympics, 65% of the Olympic athletes on Team USA were from NCAA collegiate athletic programs, according to the Senate report.
“We don’t want to see programs being cut for Olympic athletes, for small to mid-sized schools, for women’s programs. If anything, we should be talking about the growth of sports,” Trahan said.
“Just this summer, we had cuts to the track and field program at Washington State University, a very proud program, a national championship program, many Olympic athletes,” Baumgartner said. “Now the sons and daughters that graduate from high school in Washington state have less opportunity to compete at the intercollegiate level. So that’s the wrong direction in college sports.”
Baumgartner said he’s concerned more cuts could be coming. “If all the investment return is around football, universities will put more and more money into football at the expense of other sports,” he said.
Baumgartner also had a word of caution for universities and collegiate athletic conferences contemplating deals with private equity firms.
Public and private colleges currently enjoy considerable tax exemptions, but Baumgartner said such benefits may need to be reconsidered by Congress and the Internal Revenue Service. In a recent post on “X,” the Washington Republican issued this warning,
“If you want to act like a non-public entity, you better be ready to be treated like one.”
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