According to a report from Kernal Sports’ Jenna Lifshen, an SEC school has opted to begin the process of converting its entire athletic department into a Limited Liability Company (LLC).
On Friday, the University of Kentucky Board of Trustees approved plans to convert their athletic department into “Champions Blue” LLC, allowing UK athletics to “operate as a public-private partnership.”
“This [move] gives Kentucky the ability to raise funds and manage expenses as college sports enter a new era of direct revenue sharing with athletes, pending the approval of the House settlement,” Lifshen says in a tweet.
Moves like this are expected to be a common occurrence with revenue sharing now on the doorstep of college athletics. And because it’s still a relatively confusing transition for virtually everyone involved, Lifshen provided another tweet to help explain why Kentucky is taking this route.
“Kentucky Athletics is gearing up to operate more like a pro team behind the scenes to stay ahead as college sports enter a brand-new era. This means the athletic department will now operate more like a business, while maintaining its connection to the university,” she writes.
“Why? College sports are about to become significantly more expensive if House v. NCAA is upheld. Kentucky expects it will cost them about $50 million more every year, with the money going to player salaries, larger scholarships, and other athlete support. By establishing Champions Blue, Kentucky can move more quickly, raise additional funds, conduct business deals (such as real estate and sponsorships), and safeguard the academic side of the university from financial issues related to athletics.”
In short, college athletics and the true college experience are about to become two separate things. There are new and unprecedented financial challenges tied to the pending settlement and this is likely one of the most feasible ways that universities will be able to handle it.
