The competitive business environment for University of Hawai‘i athletics could get tougher, driven only in part by the commerce-mindedness of paying the athletes for their Name, Image, Likeness rights.
Governing.com, a magazine for “the people making government work,” recently argued “Why college sports should go corporate.”
Yep. Become full-on, real businesses. It’s already happening.
“The world of college sports entered uncharted and controversial territory last year when the University of Kentucky spun off its entire athletic department into a limited liability corporation,” wrote opinion writers Michael Granof and Martin J. Luby, at the University of Texas at Austin. “To many, this may represent another descent into the quicksand of professionalized college sports. But like it or not, it is a harbinger of the future and therefore of substantial concern, not only to the schools themselves but to the government officials who are ultimately responsible for funding and overseeing public higher education.”
“Rather than reject this inevitability, we believe that if properly expanded and implemented the Kentucky model can be a boon — both programmatically and financially — not only to universities’ athletic programs but more importantly to their main mission, academics.”
The authors describe how Champions Blue LLC is “100% owned by the university and will be governed by a board that is headed by the university president and includes other university officials as well as outside business and sports executives.”
They advise that other universities do likewise, spinning out their entire athletics departments, or at least the big sports like football and basketball, into free-standing corporations they own.
They even suggest that in this new reality, university sports could drop the “student” part of “student-athlete” entirely and simply pay talented people to play sports for them.
“Athletes who have no interest in academics would no longer have to pretend that they are pursuing an education, and universities would no longer need to pretend that they are providing one,” they write. “Faculty and academic administrators could focus on teaching students whose primary purpose is to acquire an education, while coaches and corporate personnel could concentrate on the athletes and their needs. Courses and majors designed specifically for athletes, expensive tutoring centers and counselors to monitor academic progress could be eliminated.”
If that’s the business future of college sports, I think things are going to get tougher for UH. It’s already struggling with the economic realities of NIL.
I’ve mentioned SB 3263 before, the bill that asked Hawai‘i taxpayers to subsidize the Name, Image, Likeness program for athletes at the University of Hawai‘i at Mānoa. At one point, the bill asked for $10 for NIL, of which $2.5 million would come from taxpayers while the bill required UH to take $4 million out of its tuition and fees special fund (more of Other People’s Money) and raise another $5 million through gifts, grants and donations (at least this amount would be voluntary).
The bill died. As Andrew Gomes at the Star-Advertiser reported Monday, the university and the lawmakers are now pointing fingers over who said what, when and why that led to the bill’s death. Worth a read, if you want the gory details, but what I want to talk about is the bigger picture. UH is paying $3 million in NIL this year, and has pledged $5 million next year and is still figuring out how to pay for it.
Like I said last month, UH’s ask amounted to a dollar per year from every resident, whether they like sports or not. I wish people would keep that in mind when they run to the Legislature and ask for support.
The Legislature has no money. None. It can only give you what it first takes from you, from your family, from your friends and neighbors and all the taxpayers in the Islands you’ve never met. People pleading with the Legislature for money don’t see most of these people when they testify at a committee hearing, but they’re real. It's their money the supplicant is seeking.
And the reality is, if you’re begging the state for a subsidy to “remain competitive,” you’re confessing that you’re not actually competitive. What you’re asking for is welfare. (No one has any problem calling it that when corporations get a tax break, after all.)
UH sports is heavily subsidized already. How much so?
I went looking for total expenses and revenues for UH athletics. You might think a document called “Annual Report University of Hawai‘i Athletics” would include this information.
It does not. The 2023-2024 edition has just one out 22 pages devoted to money, and it’s just highlights of various fundraising successes. Good for them on the wins, but leaving out total revenues and expenses demonstrates a “no need worry about the money” mindset.
Athletics aren’t broken out very clearly in the 2025 Annual Report for the entire UH system, either.
The best source I could find online for expenses is the Knight-Newhouse College Athletics Database. For 2024, the most recent year available, UH athletics cost nearly $60 million. Here's where the money goes:
So let’s say the new reality is, UH has to spin this whole thing out and turn a small profit, say 5%. It would need $63 million in revenue to hit that mark.
Can it?
USA Today looks at NCAA finances, in a chart covering the 2022 school year. At that time, UH had revenues of about $49 million versus expenses of $48 million. Profitable, right? No.
Click on Hawai‘i in the chart to see this breakdown: Ticket sales were just under $2 million, donations were $4.4 million, rights and licensing revenue were just over $10 million. The rest came from Other People’s Money — $1.6 million from student fees, nearly $28 million in public funds of all kinds, and $3 million was categorized as “other” revenue.
If UH flipped the switch and converted athletics into a business off those numbers, well, those numbers look like life support. If we find ourselves competing on the field with programs that are profitable, because they can be profitable, I don’t see how UH won’t be back in front of the Legislature asking for more support to "remain competitive."
And tough questions about whether or not taxpayers need to own a sports business are going to get tougher.
A. Kam Napier is editor in chief of Aloha State Daily. His opinions in Pipikaula Corner are his own and not reflective of the ASD team.
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A. Kam Napier can be reached at kam@alohastatedaily.com.
