LOUISVILLE, Ky. (WDRB) -- If you want a glimpse of how college athletic departments may operate in the future, take a look at what the University of Kentucky board of trustees voted to do Friday.
The university is breaking off its athletics department into a new entity called Champions Blue, LLC. It will operate under Beyond Blue Corporation, a university-affiliated nonprofit created in 2014 to manage acquisitions and strategic ventures in UK’s expanding health care system. Beyond Blue has since grown into a $1.3 billion enterprise, and UK leaders say the same flexible structure could now help the athletics department prepare for the financial realities of college sports in transition.
A news release from the school says the move would make UK the first major public university to place its athletics department under a separate LLC within a corporate-style structure — a direct response to the incoming era of pay-for-play and athlete revenue sharing.
Athletic departments have traditionally operated as affiliated entities of universities. The University of Louisville Athletic Association, for instance, exists as a separate nonprofit (501c3) created to support the university’s mission. UK's move signals not just a structural tweak, but a philosophical shift.
Rather than keeping athletics within a traditional nonprofit wrapper, UK is preparing to run it as a mission-aligned but more agile business unit — with new tools for partnership, investment, and innovation.
Champions Blue LLC would be controlled by the university trustees and governed by a new board made up of university officials and outside experts from business and pro sports. The university says this structure will give the athletics department the flexibility to unlock new revenue streams through public-private partnerships and potentially other ventures, such as real estate.
“We believe this is an innovative approach — a new structure and governance model that thoughtfully contemplates how we strengthen Athletics, protect and promote the University and open up new opportunities for growth,” UK President Eli Capilouto said in a statement. “. . . Athletics and its success have always been the result of an incredible and productive partnership with campus. It will continue to be in the future — if we seize the opportunities in front of us to meet the challenges that lie ahead.”
Champions Blue won’t operate entirely independently. It will be fully owned by Beyond Blue Corporation and treated as a “disregarded entity” for tax purposes, meaning its revenues are still tied to the university’s umbrella — at least for now.
UK expects up to $50 million in new annual costs tied to the anticipated NCAA legal settlement with current and former athletes — a settlement that would usher in revenue-sharing for the first time.
The new LLC model gives UK Athletics more flexibility to manage those costs — by launching partnerships, offering more customized benefits to coaches and staff, and potentially serving as a more direct middle-man in NIL deals, instead of relying entirely on third-party collectives.
As part of that flexibility, employees of Champions Blue would be designated as public employees, but not necessarily employees of the University of Kentucky. That opens the door to different hiring terms, benefit structures — and possibly employing athletes directly without triggering some of the rules that come with state university employment.
It also raises significant questions. Will Champions Blue be subject to Kentucky’s open records laws? And if Kentucky’s model works, will other universities follow — or will regulators and watchdogs push back?
Without question, it blurs a line college athletics has been walking for years -- between educational institution and business enterprise. To stay tax-exempt, programs have to stay tied to the university’s mission. To stay competitive, they must learn to operate like businesses.
Kentucky, clearly, thinks it’s found a way to do both.
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