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It’s a favorite saying of UNC System leaders that athletics is the front porch of its universities.
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Increasingly, that front porch is looking much messier: athletic budgets are skyrocketing as the industry transforms, and universities are struggling to control their spending in an atmosphere of constant change.
The UNC System can’t afford to keep looking the other way.
The System’s Board of Governors’ budget committee commenced discussions on Wednesday regarding potential policies to regulate how institutional funds are funneled into athletics as spending increases.
“The college athletics model has never been more broken,” said UNC System president Peter Hans, “and yet it has never been more popular.”
A presentation — led by Hans and budget committee chair Kirk Bradley — touched on the importance of college athletics for both community and economic purpose. But it centered on the lack of policy which allows unrestricted institutional funds to be used to subsidize athletics spending, which could have a negative impact on academics.
“Agencies are already recognizing that revenue-sharing obligations can affect academic budgets,” Bradley said. “Affordability is another consideration. Mandatory athletics fees raise every student’s cost of attendance and weigh heaviest at our access-focused universities.” Risks like these “become more difficult when athletic spending grows faster than athletics generating revenue,” as is the case across the UNC System.
The UNC System includes two Power Four programs in UNC-Chapel Hill and NC State, as well as 13 other member institutions that span Group of Five, FCS and non-football conferences — all of which have differences in how they can rely on athletics-generated revenue to support athletics.
The presentation defined athletics-generated revenue includes media rights, licensing, royalties, sponsorships, ticket sales, conference and NCAA distributions, donor contributions that are specific to athletics. The presentation laid out that while NC State (which can cover 93% of its athletics expenses with athletics-generated revenue) and UNC-Chapel Hill (86%) remain largely self-sufficient, many smaller schools within the system have to rely far more on university funds to sustain their athletic programs.
But none of the athletic departments in the UNC System are entirely self-sufficient, the System’s presentation asserted.
College sports have changed tremendously in the last five years, which the UNC System noted has had an impact on athletics spending overall. A 9-0 Supreme Court ruling against the NCAA in NCAA v. Alston forced the organization to develop Name, Image and Likeness bylaws in July 2021, which changed the look of college sports as it was previously known. Combined with the transfer portal, NIL payments created an ever-growing and volatile market value for athletes.
Then in June 2025, schools were permitted to provide direct payments to athletes following the settlement of House v. NCAA, which implemented revenue sharing up to $20.5 million per school and roster limits for athletic programs. This is all as the Protect College Sports Act remains in legislative limbo, as the nation’s leaders continue to argue ways to add stability to an unpredictable system.
Bradley noted that these changes all signal that payments to athletes are no longer prohibited, they are something that needs to be budgeted for.
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“I certainly want our universities to remain competitive and continue to demonstrate excellence,” Hans said. “At the same time, we should check in on costs, which with the changing national landscape, are growing at an unsustainable rate.”
It doesn’t look like increasing costs are going anywhere, either: the System estimates that UNC-Chapel Hill’s football budget alone will increase by $8 million year over year. From FY23 to FY24, the committee noted that UNC-Chapel Hill’s athletics spending increased by $49 million (or 35%) and NC State’s spending increased by $16 million (13%). That doesn’t account for revenue sharing, which projects to further increase spending in FY26.
N.C. State Athletic Director Boo Corrigan told the university’s Board of Trustees in February the department was facing a nearly-$18 million shortfall. He said, at the time, that was in part due to conservative budgeting and uncertainty regarding revenue generation in specific areas, such as men’s basketball ticket sales.
In August, Corrigan told reporters the athletic department finished with a balanced budget, thanks in part of the Wolfpack Club’s fundraising efforts. Corrigan emphasized, however, the cost of operations — not just the revenue sharing payments — continue to rise. He expects the department to face a similar deficit.
“Every year we spend a lot of time, effort and energy on getting to that balanced situation,” Corrigan said in August. “Not sure exactly what the numbers are right now. As you come off May, June, you’re trying to put all your energy into what we can do to end FY 26, and now we’ll approach FY 27 at this point.”
In North Carolina, state lawmakers legalized sports wagering in 2024, with some proceeds being distributed to 13 UNC System member institutions. Proceeds will be provided to UNC-Chapel Hill and NC State starting in the next fiscal year. That provides an additional revenue stream, but the cost of athletics in the UNC System still greatly outpaces what athletics is bringing in.
N.C. State, like UNC-Chapel Hill, continues to seek outside revenue sources. This includes naming rights for Carter-Finley Stadium, field and jersey logos, and events at both Carter-Finley and Lenovo Center.
Comments from the committee were light on Wednesday, as Hans said “this is the beginning of a process” before turning it over to governors for questions. Governor John Fraley opened discussion adding he hopes this will be the start of a months-long discussion. Governor Harry Brown said finding a solution will be “a real challenge” and implied the need for discussion is a result of the NCAA’s failures.
“I think part of the problem is the NCAA has just, I think, botched the whole thing, and I’m not sure how viable the NCAA is anymore,” Brown said. “ … It’s obvious to me that the NCAA doesn’t have any clout to do anything.”
He echoed an earlier point from Hans, noting that the vast differences in the conferences that member institutions are a part of make it difficult to create uniform legislation for all member schools.
Governor C. Philip Byers added input on the economic boon that athletic programs can be, specifically calling out NASCAR, Appalachian State football, along with East Carolina football from the other end of the state, as economic drivers in the mountains along Interstate 77. He urged the committee to look into the impact athletics have on communities, while tossing a twirling a football between his hands over Zoom.
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