I. Introduction
College athletics, long celebrated as the last and purest form of amateur sport, is undergoing a dramatic transformation—a fast-track toward professionalization.
What was once a university-operated, donor-supported, community-backed ecosystem governed by tradition is now increasingly influenced by macroeconomic market forces, including labor rights, media rights, and potentially private capital.
This is no longer just about who wins the Rose Bowl or the Final Four. It’s about who controls the infrastructure, monetization, and influence of a multi-billion-dollar industry.
I see this not just as a cultural shift—but as an infrastructure vacuum. When the old models collapse, someone will build the new ones. The only question is: who?
II. NIL as the Trojan Horse
The emergence of Name, Image, and Likeness (NIL) in 2021 was a highly debated topic. Traditionalists branded it as a violation of what it means to be a student-athlete, while progressives called it a long-overdue move to give athletes the right to monetize their efforts. Whether people agreed or disagreed, the legalization of this athlete-empowered movement sparked a snowball effect that could not be stopped, even if an attempt was made.
Case Study: At the University of Miami, a booster-backed collective signed a $400K NIL deal with a top men’s basketball recruit. That public deal set a new standard—effectively pricing out less-resourced programs. The result? A Final Four run in 2023 and a clear statement: NIL was no longer about individual endorsements. It had become an institutional weapon.
NIL was never just about athletes making money off Instagram. From the start, collectives were used as the primary recruiting tool for coaches to attract top talent to their schools. An anonymous SEC Athletic Director said, “Boosters used to give to build facilities. Now they’re paying for talent directly. That changes the whole power structure.” It’s now a full-fledged compensation system disguised as marketing. Honestly, that took some time to develop. In 2021, NIL mainly involved ad-hoc sponsorships and brand deals. And now, in 2025, it has grown into structured contracts, retention incentives, and tiered recruiting payouts. Many would describe this short-lived period as the Wild West.
However, as many had predicted, this structure alone could not hold up. It quickly turned into an arms race to the bottom, with the winner being the one with the most donor dollars.
The aftermath that we predict is a lose-lose where every party involved is fatigued at the end.
Market forces are now knocking on the front doorstep of college athletics to clean house.
Subscribe to receive all of LEAD’s latest posts.
III. The Broken Model & Its Unintended Consequences
The traditional economic model of college athletics was based on three pillars (but not for much longer):
- Volunteer amateur labor: When the Northwestern football team tried to unionize in 2014, it marked the beginning of a labor rights awakening. With recent settlements, the NCAA has finally lost its grip on defining athletes as “students first.” Using this argument, universities profited off athletes’ names and likenesses without paying them. The era of unpaid labor is essentially over.
- Ever-increasing broadcast revenue: While media revenue has surged, so have expectations. Linear TV is funding the present, but it’s not shaping the future. Media revenue was once the main driver of growth. Now it’s the wedge that’s divided the sport. Mega-deals with Fox and ESPN have created “haves” and “have-nots,” with Power5 schools earning three to five times more than mid-majors. That imbalance is now apparent.
- Alumni-driven efforts: Donors are funding talent pipelines in the dark, often with no say or stake. This shift from philanthropy to transaction is forcing many to rethink their role in the ecosystem. When their emotional ties unravel, dollars will slowly disappear. A Stanford donor said in a Sportico article, “If we become just another minor league, don’t expect me to keep giving like this as an alma mater.”
That model is now broken. Why now? This is a $20B market awakening to its own inefficiencies. College athletics is no longer just a stepping stone—it has become its own market. With ongoing legal reforms, revenue increasing from media rights, and private equity interest intensifying, it is an inevitable truth waiting to be revealed.
Legal Reforms: The House v. NCAA settlement marks a turning point. Approximately $20.5 million per school in new revenue allocation has temporarily leveled the NIL landscape —no more pay-to-play arms race, but most schools still lack the tools to spend wisely. The new structure means that every athletic department now operates under a quasi-professional model. Schools must now budget like businesses, with actual labor costs. Without a unified labor framework, the result is chaos: different state laws, inconsistent enforcement, and vast compliance gaps. More to come here.
Revenue Surges: In 2025, the Big Ten and SEC are projected to generate over $1.5 billion in media rights, surpassing the revenue of some professional leagues. However, this “super conference” model results in concentrated value—40 schools thrive while 300 others struggle. This consolidation reflects Silicon Valley: dominant platforms overshadow everyone else.
PE Interest: Firms are targeting college sports to control the infrastructure. Similar to fintech or logistics, owning the infrastructure offers long-term leverage. Revenues have increased, but cost structures remain inflated. Some groups are quietly exploring ways to bundle athletic department revenue streams for securitization. It’s financial engineering combined with fandom.
All these rapidly changing dynamics raise a significant concern: the unintended result of facing inequities in college athletics for non-revenue sports. This is a question I haven’t seen many people in the industry address or have a clear strategy for. I am hopeful that this will change.
IV. Global Models: A Mirror or a Warning?
Across Europe and around the world, professional sports primarily grow through club academies and federated systems, rather than universities. Some UEFA development coach probably says, “In Europe, we don’t pretend our 18-year-old striker is here to major in biology.” Separating academics and athletics has its downsides, but also provides clarity. US college sports might be closer to that reality than we first think. As schools move away from the student-athlete label and start offering direct pay, they’ll need new models for scale, governance, and ownership.
V. What I’m Looking for as a VC?
“Schools need infrastructure fast. If the NCAA won’t build it, startups will.” — Blake Lawrence, CEO, OpenDorse
🧠 Thematic Signals I’m Tracking:
I want to find builders developing new systems for an old industry. This cosmic shift in the industry is that increasing revenue is the top priority. Revenue can be perceived directly on a P&L, but also indirectly through a team’s winning percentage. But do not ignore or lose sight of what matters most to athletic departments moving forward.
- “Boring” back-office tools for athletic departments to operate like a traditional business.
- “High ROI” front-office & on-field tools designed to impact winning games sustainably.
- Infrastructure for fan monetization beyond tickets. Fan identification is required first.
VII. Final Words
This isn’t the “hype wave” we all experienced with NIL. It’s a structural re-architecture.
- For founders: the need is real, and the buyers are scared. Get busy!
- For athletic departments: the clock is ticking. Go out and innovate. If you want to retain control, start running a sports enterprise, not a scholarship office with a stadium.
- For VCs: The market size is substantial, and market dynamics are currently in place.
- For PEs: While it has some perks to the vanity asset (like professional sports), you’ve got quite the operational task ahead of you. That said, there is serious upside if executed the right way.
