University of Kentucky looks to make athletic department LLC

Kentucky will ask its board of trustees Friday to approve a plan to convert its entire athletic department into an LLC, a move the school says will position it to adapt to the new climate of collegiate sports.

Champions Blue, the name of the school’s proposed Limited Liability Company, would allow Kentucky to create a public-private partnership and raise funds and handle expenses as collegiate sports shifts into a new era if the House settlement is approved and schools are allowed to share revenue with athletes in the years ahead, the school said in a statement.

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A board composed of business and professional sports experts will advise athletic director Mitch Barnhart and school president Eli Capilouto under the proposed model, which the school is calling one of the first in Division I sports.

“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,” Capilouto said. “It’s a foundation and model that we are calling Champions Blue. 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.”

The public-private partnership could give the school access to unorthodox revenue streams like real estate as collegiate sports undergo a transformational shift with schools — under the terms of the House settlement — expected to be able to give a pool of $20 million to athletes who may also still have the opportunity to capitalize on outside NIL deals. The school said the proposed model, which would make the athletic department a holding company, is one it has used outside athletics to acquire a pair of local hospitals.

Last week, a study led by former Auburn athletic director Jay Jacobs advised that schools should consider hiring human resources departments and operating like businesses instead of traditional athletic departments.

Shortly after the school’s announcement of the proposed model for sports, Kentucky football head coach Mark Stoops tweeted: “Big news! Thankful for the leadership we have at [University of Kentucky].”

Kentucky is one of the most financially formidable schools in the country. The school’s athletic department generates more than $166 million in revenue, according to U.S. Department of Education data. That’s a top-20 mark, according to USA Today’s database of athletic department revenue.

But the proposed model, the school said, is necessary to thrive in the next chapter of collegiate sports.

“Our mission remains the same: to put championship rings on fingers and diplomas in hands,” Barnhart said in a statement. “But how we accomplish that goal — how we finance our teams, protect our future and support our student athletes — will have to change.

“That’s what this new model represents — an understanding that in the market we are in that we have to be creative. We have to find new ways to generate revenue, manage expenses and think about opportunities to grow.”