States are pouring taxpayer dollars into college sports as athlete pay squeezes budgets

Regardless of the score, the North Carolina Tar Heels will already be in elite company when they kick off the college football season against Texas Christian University.

They will be among a small but growing number of athletic programs receiving taxpayer funding from their home states.

With universities competing to pay athletes millions of dollars , some states now are propping up their strained sports budgets in ways not previously seen. The state dollars aren’t going directly to star athletes. But by funding facilities and administrative costs normally borne by the schools, states are freeing universities to use their own dollars for other purposes.

The athletics program at the University of North Carolina at Chapel Hill, for the first time, is receiving $3 million earmarked from state sports betting taxes. Wisconsin lawmakers approved $15 million for athletic costs at the University of Wisconsin. And Connecticut and Louisiana also are using tax dollars to support college athletics. Even more states have considered it.

“Once one state provides that kind of assistance, schools in competing states can argue that they are being placed at a competitive disadvantage, which could create additional pressure on legislatures to respond,” said Daniel McIntosh, faculty director of the sports business program at Arizona State University.

NCAA rules long barred college athletes from getting paid by schools and boosters. But under pressure from lawsuits and states, the NCAA cleared the way in 2021 for athletes to receive money from private entities for the use of their name, image or likeness (NIL). Then a legal settlement last year allowed higher education institutions to directly pay athletes a total of about $20.5 million annually — on top of any scholarships and other NIL deals they receive.

That cap rose to $21.3 million for this school year, and is set to rise again the following year.

Many mid-level programs cannot afford that much. But almost all NCAA Division I athletic programs are trying to generate more money to pay athletes in a bid to remain competitive with their peers. At the same time, schools have been incurring greater costs for facilities, coaches’ salaries and travel amid conference realignments that discarded old geographic-based rivalries.

Over the past four years, athletic operating expenses at public Division I institutions shot up by nearly a third — notably outpacing revenue and running up deficits, according to an Associated Press analysis using the Knight-Newhouse College Athletics Database.

The Protect College Sports Act , pending in the U.S. Senate, has been promoted as a way to put guardrails on college sports spending. But it could potentially allow even greater spending by schools.

The latest version would allow institutions to pay up to an additional $27.5 million annually to retain players on their rosters, pushing the overall athlete payment cap close to $50 million.