CHAPEL HILL — The University of North Carolina at Chapel Hill could be the next athletic department to create an outside entity to help generate additional revenue at a time of soaring costs.

UNC athletics director, Steve Newmark is scheduled to present the concept at a board of trustees committee meeting Tuesday.

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“It would be beneficial if we had some type of separate entity that was just focused on the revenue-generating aspects of the athletic department,” Newmark told WRAL in an interview. “They can be more entrepreneurial [and] nimble because sometimes a structure that is set up to serve an academic community may not necessarily be the same structure that you want around going out and trying to get concerts and trying to figure out how to do more interesting licensing deals.”

Schools all over the country have been experimenting with new structures. The University of Kentucky moved its entire athletics department in 2025 into a holding company called Champions Blue. The University of Utah’s athletics department created a new company backed by private equity. The University of Louisville created Cardinal Ventures, an affiliated nonprofit to modernize business operations and generate more revenue. UNC-Charlotte created Charlotte 49ers Ventures for the same purposes.

“If you rewind 20 years ago, UNC Athletics was competing for eyeballs and share of wallet and all of that against primarily North Carolina State, Wake Forest, Clemson, and the world has evolved for a lot of reasons,” said Newmark, a former NASCAR team executive who started with the Tar Heels’ athletics department last year and took over as director on July 1.

“Every industry has changed, and we're now competing against professional sports,” Newmark said. “We're competing against concerts. We're competing against different types of festivals. We're competing against any entertainment property, and so if that's the case, we have to make sure that our infrastructure is evolving in order to make sure we're still an appealing partner to engage with.”

Operating an outside entity could allow UNC athletics the ability to work outside of the restraints the public university’s rules, which can be cumbersome and inflexible at a time when the college sports landscape is changing rapidly due to revenue-sharing agreements with players and the ability of players to engage in more commercial activities than in the past. 

Having more flexibility in hiring, for instance — both in terms of number of employees and salary range — , could make the university’s athletics programs more competitive, enabling it to better compete for talent with other businesses. And the outside group could make investments that UNC would be unwilling or unable to make. The group could place different revenue streams, such as ticketing, licensing, sponsorship and multimedia rights, under the same office, allowing for better coordination and efficiency.

North Carolina recorded $188 million in athletics department expenses in 2024-25 — the most in school history — and generated $173 million in revenue, a $15-million deficit. The department, which sponsors 28 sports, is expected to have more than $200 million in expenses moving forward. The top expense categories were salaries and benefits for coaches, support staff and administration.

“Football and [men’s] basketball pay for themselves,” UNC Chancellor Lee Roberts said in late July. “What we used to be able to do was to have football and [men’s] basketball pay for the other 26 spots that we’re proud to field and in which we have a very strong tradition. The transfers from the central budget are for the other 26 sports because football and [men’s] basketball can’t pay for all the other sports anymore.”

That’s due in part to revenue sharing.  As of the 2025-26 academic year, North Carolina shares revenue directly with athletes. Last year, the figure was $20.5 million with football and men’s basketball athletes receiving $20 million. This year, it’s $21.3 million. Federal legislation pending in the U.S. Senate would raise the spending cap to nearly $50 million per year.

“NIL is now a big piece, even though NIL doesn't necessarily generate revenue for the university,” Newmark said. “It's now absolutely a necessity that you have an infrastructure to help support your student athletes to go out and secure legitimate commercial deals. And then, we want to continue to lean into special events and try to leverage.”

UNC hosted two Savannah Bananas baseball games at Kenan Stadium over the summer, a first step toward the type of auxiliary programming the athletic department is considering in an attempt to raise revenue. 

Roberts and Newmark have consistently said they don’t want to cut sports. In addition to six NCAA men’s basketball titles, UNC has won national championships in women’s soccer, women’s field hockey, women’s lacrosse, women’s basketball, men’s lacrosse and men’s soccer. The baseball program finished second this season.

“If you were somebody solely focused on finances, it's not a complicated analysis. You come in here and go, ‘Okay, we have 28 sports: two of them make money, 26 don't,” Newmark said.

“In the cutthroat world of corporate America, you make certain decisions. But we’ve got to step back,” he said. “Our primary focus is not economics. You have to be smart in how you use your resources and recognize that you don't have unlimited resources. But our primary purpose, at least in the athletic department, is to inspire and educate through athletics. But beyond that, the bigger mission is to serve the mothership and the university and to make sure that athletics is serving the overall purpose and the mission of the university, which is education, research, and you go down the line. I fervently believe that athletics does enhance the university, and it's a critical component to it.”

The athletic department also owns and manages Finley Golf Club.

“Running a golf course is very different than running an undergraduate academic department,” Newmark said. “Is it better suited to be in this [new entity] with a group that their sole focus is how do I generate more revenue to support the student-athletes and coaches within the confines of our system? That's kind of the underlying driving force behind it.”