Roth, Privatizing College Athletics: Using an LLC to Govern College Sports

In April 2025, the University of Kentucky, a member of one of the most powerful conferences in college sports, created Champions Blue, LLC.  The Board of Trustees approved the transfer of Kentucky’s collegiate athletics operation into this new entity.  A few months later, the University of Utah similarly created a Limited Liability Company (LLC) to house its athletics program, though Utah’s model also incorporated a private equity investor into the LLC.  Other schools, including Boise State, Clemson, Michigan State, Texas Tech, and West Virginia, among others, have also recently formed LLCs or formed partnerships with a private entity to hold the business arms of their athletic programs.  As universities navigate direct payments to student athletes as well as the expansion of name, image, and likeness (NIL) markets, more universities will likely look toward the organizational flexibility and risk management tools that an LLC can provide. 

This Article provides one of the first comprehensive legal analyses of the use of an LLC to take over a university’s athletic department.  Privatizing a core public‑facing function through the establishment of an LLC may reduce bureaucracy, enhance operational agility, and segregate financial and legal liabilities.  However, the use of an LLC for these purposes also creates legal risks and serious questions about public accountability, statutory authority, tax and nonprofit status, employee rights, NCAA compliance, and other unresolved regulatory constraints.  This new approach will likely shape how other universities structure their athletic programs in the revenue‑sharing era where student athletes now receive direct payments. Finally, this Article makes policy recommendations on how to maximize the benefits of the LLC structure yet minimize the risks that may be created through privatizing college athletics.