UNC Board of Governors to consider limits on spending, subsidies for college athletics

RALEIGH — North Carolina’s public higher education leaders could consider limits on subsidies for intercollegiate athletics as expenses skyrocket at the University of North Carolina System’s 15 athletic departments.

2026-09-15

Student fees, campus institutional support and state  money, mostly from sports betting revenue, fund about 36% of intercollegiate athletics across the state, according to the UNC System, which oversees public higher education including at NC State University, the University of North Carolina at Chapel Hill, and North Carolina Central University.

No votes are expected at Wednesday’s meeting.

But if such a policy were to be eventually implemented, its effects could vary widely by campus. Schools with high-profile sports teams — UNC and NC State in particular — rely mostly on private sources of revenue to fund their programs. Those revenue sources include TV deals, merchandise and ticket sales, and private donations.

But at smaller schools with fewer fans and donors, government support can make up most — and in some cases, nearly all — of the school’s athletics budget.

UNC System leaders are starting up the debate around capping subsidies as spending on college athletics balloons nationwide.

Particularly at smaller schools heavily reliant on subsidies, the rising costs of athletics could lead administrators to look to students as an easy and captive source of revenue, by hiking student fees. The board of governors appears to be wary of that trend accelerating beyond where it already is. At UNC and NC State, students pay less than $300 a year in athletics fees. But every other system school charges students between $773 and $906 per year in athletics fees.

The board is also expected to debate more approval requirements and higher reporting standards.

“A policy framework that keeps athletics financially responsible — competitive where we choose to compete, without open-ended subsidies from institutional funds that carry other obligations” is where the UNC Board of Governors’ policy is headed, according to materials prepared in advance of this week’s meeting and planned discussion on the finances of intercollegiate athletics.

The discussion is expected to involve a detailed look at revenues, expenses, subsidies, student fees, affordability, sports betting revenue, debt capacity, litigation, employment and conference economics. 

Athletic departments can each pay $21.3 million directly to athletics as part of a legal settlement, a new expense item. It was expected to be a cap, but as the board notes in its presentation “the cap is proving to be a floor,” with some football rosters costing more than $40 million.

The 15 athletics departments within North Carolina’s public universities compete across NCAA divisions from UNC and NC State and their nine-figure spending on athletics in the Atlantic Coast Conference, a member of the so-called “Power 4” leagues, to four Division II programs with budgets of less than $7 million. 

At NC State and UNC, institutional support and student fees make up 11% of athletics revenue. The figure is 56% at Charlotte, East Carolina and Appalachian State, 70% at the state’s three Football Subdivision Schools (N.C. Central, North Carolina A&T and Western Carolina) and 76% at schools that don’t sponsor football.

“A single board policy governs a $640 million-a-year enterprise spanning Power 4 ACC football and Division II programs smaller than one coach’s salary,” the board notes in its material. “One size will not fit all — guardrails will need tiers, just as our programs have them.”

UNC spent $188 million on athletics in 2024-25 and had a deficit of $15 million. The athletic department collected $8.5 million in student fees and $1.9 million in other institutional support. Similarly, NC State’s $141.5 million in athletics revenue includes $7.6 million in student fees and $9.5 million in institutional support.

At the low end of the scale, Elizabeth City State had $4.1 million in expenses with nearly all of the money coming from student fees and government support like sports betting revenue.

There is currently no cap on the level of institutional support in board policy. “This is a lever guardrails could govern,” suggests the board presentation.

UNC and NC State, which collect tens of millions from its conference media rights and other revenue, charged $279 and $232, respectively, per student for an athletics fee for the 2026-27 academic year. The other 13 schools charged between $773 (East Carolina) and $906 (UNC-Asheville) per student in athletics fees. Those rates were the same as in 2025-26 except for slight increases at Appalachian State and UNC-Pembroke.

Athletics spending at North Carolina has gone up about $50 million since 2023 and is expected to exceed $200 million in total spending for the current academic year. The Tar Heels have spent big on football and men’s basketball, while adding nearly 200 scholarships across its 26 other sports, many of which are successful nationally. At NC State, spending is up $16 million since 2023. Both athletics departments are seeking ways to generate additional revenue by selling naming rights to their football stadiums, adding more corporate sponsors and holding events, including concerts and entertainment.

The ACC lags behind the Southeastern and the Big Ten conferences in revenue generation and distribution to its members. UNC and NC State received about $30 million less in conference distribution from the ACC than Big Ten members did from its league office for the 2024-25 year. That gap is expected to grow.

“Rapid expense growth like this is now the norm across major college athletics but normal is not the same as sustainable,” the board notes in its presentation. “The governance question: Which funding sources absorb it – reserves, campus funds, debt – and with what board oversight?”

North Carolina lawmakers recently changed the distribution formula for money from legal online sports betting in the state in its most recent budget. All campuses can receive up to $2.9 million, while the 11 Division I schools can receive an additional $400,000 and, beginning in July 2027, the five Football Bowl Subdivision schools can receive an additional $2.5 million. UNC System guidance provides that the money goes first to athletics deficits and then to reducing reliance on fees. Previously, UNC and NC State didn't receive any money from sports betting revenue.

The U.S. Senate is considering extensive legislation to re-write the rules governing college athletics. The bill could be voted on as soon as this week and faces uncertain prospects in the U.S. House. That legislation still leaves several issues unsettled, including ongoing litigation, employment for athletes and potential collective bargaining. 

“The rules will keep moving underneath any policy the Board writes,” the presentation notes.