Kentucky Plans to Convert Athletic Department Into Corporate Entity

The University of Kentucky is moving forward with plans to move its athletics department under a new university corporate entity that officials say will allow the school financial flexibilty as the NCAA moves closer to allowing student-athletes to be paid. 

Kentucky athletics director Mitch Barnhart and the university’s executive vice president for finance and administration, Eric Monday, said the new entity will be called Champions Blue LLC and will be modeled on how the school deals with its hospitals and other medical services enterprises. 

The move will need the approval of the full Kentucky board of trustees, which are scheduled to meet today. The board's athletics committee unanimously approved the measure at a meeting yesterday. 

According to the USA TODAY, Kentucky’s athletics department had nearly $202 million in operating revenue and nearly $197 million operating expense in its 2023-24 fiscal year. That puts the Wildcats among the top 15 publics schools in both categories, according to data compiled by USA TODAY Sports in conjunction with its partnership with the Knight-Newhouse College Athletics Database at Syracuse University.

Barnhart expects the athletics department's expenses for the 2025-26 fiscal year to increase by around $50 million because of the NCAA's settlement of the House class action lawsuit that will pave the way for athletes to be directly paid. 

Barnhart and Kentucky spokesman Jay Blanton told the USA TODAY the estimated $50 million increase in expenses comes from its expected NIL payments to athletes (likely $20 million to $23 million), an increase in the number of athletic scholarships it awards ($4 million to $5 million), inflation, spending by the school in connection with efforts it can make to assist athletes with outside NIL deal and an expected loss of sponsorship revenue from companies that instead choose to make NIL deals with athletes.