The following is a guest article by Jason Hershman, founder and part-time CFO of Point. The views expressed are solely those of the author.

On January 19, the Indiana University Hoosiers will face the Miami Hurricanes for the College Football Playoff national championship. Saying that still sounds surreal. Until recently, Indiana was a program known for losing—they indeed hold the record for the most losses in college football history.

Now, they are 15-0, their star player has won the sport's most prestigious award, their head coach has become an internet sensation, and Indiana alum Mark Cuban is pouring money into the program like a project on Shark Tank. Cuban himself told CBS Sports that he views Indiana's Name, Image, and Likeness (NIL) budget the same way he managed the NBA salary cap in the past.

However, what really caught my attention isn't the sports angle—after all, I'm a CFO. It's that Cuban never donated a cent to Indiana athletics before December 2024, and 14 months later, with the team heading into the championship undefeated, he talks about roster construction and player acquisition like a general manager.

Honestly, he should. College sports are undergoing a transformation; athletic departments are no longer sleepy university branches but operating entities with real payrolls, transfer market strategies, and billionaire investors expecting returns on capital.

Throughout my career, I've seen this scenario play out countless times in other industries: growth outpaces structure, and the environment becomes like the Wild West. As CFOs, it's our responsibility to step in, build the financial pillars, and introduce discipline before opportunities collapse under their own weight. This is why I've concluded that athletic departments need to be spun off as independent entities, and why CFOs will be at the center of it.

1. NIL and Revenue Sharing

The amateur model is dead. Formally, legally dead.

The House v. NCAA settlement now allows Power Conference programs to distribute up to $20.5 million annually directly to athletes. This cap increases each year, Power Five schools must participate, and over 300 programs have voluntarily joined. We're talking about institutional player compensation that didn't exist 18 months ago.

That doesn't even include donor-funded NIL, which constitutes a second payroll running parallel to official compensation. Cuban's "salary cap" approach at Indiana isn't unique. Their championship opponent, Miami, spent $4 million through the transfer portal to bring in quarterback Carson Beck. A few weeks ago, Ole Miss "re-signed" running back Kevontae' Russell to a "new contract."

Recruiting has become a free agency market, and these programs have become franchise entities, whether they admit it or not.

Once athletes become paid assets, financial infrastructure is needed to support that reality. That's where we come in. CFOs now budget for player compensation like professional teams. We track fair value assessments of NIL deals, tie spending to performance, and ensure donor funds are deployed strategically rather than recklessly.

Not to mention, we haven't even discussed multi-year contracts and commitments. Contract incentives for retaining players, on-field performance, and recruiting high school stars will all drive liabilities on the football balance sheet (if one existed today) through the roof. CFOs will be responsible for tracking and managing these liabilities while communicating the equity value created to offset them.

2. Protecting the University's Tax-Exempt Status and Limiting Liability

All this new money brings new problems: the IRS is watching.

Universities are tax-exempt nonprofits. Yet, their athletic departments generate billions in revenue through television deals, corporate sponsorships, and ticket sales. This is commercial activity in a gray area, and regulators have begun asking uncomfortable questions. Add direct revenue sharing, and it could constitute "private benefit," conflicting with the "charitable mission."

So, how do you protect the main entity—the university? The answer is "ring-fencing" the sports business. This means spinning off the athletic department into a separate LLC, isolating commercial sports revenue from the academic core.

In April 2025, the University of Kentucky transferred its entire athletics program to a wholly owned entity, Champions Blue, LLC. Media rights, sponsorships, and ticket revenue now flow through that structure rather than directly through the university.

As CFOs, we are the architects designing these structures. We work with tax attorneys to navigate unrelated business income triggers, structure compliant fund flows between foundations and athletic entities, and establish firewalls to limit liabilities like injury lawsuits or contract disputes within the subsidiary, away from the university's balance sheet.

3. The Need for Agility and Operational Speed

University bureaucracy wasn't built for the transfer portal.

When a star quarterback hits the market, programs have days to make decisions, sometimes only hours. The traditional campus governance pace is entirely different: state procurement rules, oversight committees, slow budget processes. This friction costs wins and money.

The LLC structure solves this. A sports entity owned by the university but operating with business autonomy can hire staff, negotiate contracts, and close deals without seeking main campus approval for every dollar. Kentucky explicitly cited this reason when spinning off its athletic department.

CFOs are the quarterbacks here. We need to build real-time financial monitoring systems to track the impact of a wave of transfer signings on the NIL budget. We set guardrails that allow quick action without reckless spending. We draw on professional sports experience, using data analytics to measure which player investments yield the best ROI.

4. New Funding Sources from Big Donors to Private Equity

Wealthy alumni writing checks isn't new. What's changed is the mindset.

These donors now act like venture capitalists, putting real money on the line. Mark Cuban isn't the only one leveraging influence and funds. Look at Texas A&M's donors: they poured $51 million into NIL deals in one year, not out of charity, but for on-field results and off-field pride.

Private equity has also entered the game. Just last month, the University of Utah approved a partnership with Otro Capital to raise approximately $500 million through a new sports LLC. This is the first deal of its kind, and you can bet other cash-strapped programs (and institutional investors) are watching closely.

Without a CFO, who structures these arrangements? We are the ones reviewing terms, protecting university control, and ensuring external capital doesn't come with strings attached that strangle the mission. Once funds are in, we're also responsible for deploying capital wisely and providing the reporting sophisticated investors demand.

Big money brings high expectations. Someone has to manage both.

5. Rising Costs and Sustainability Pressures

Most athletic departments were already wasting money. Nearly every program nationwide runs an annual deficit. Coaching salaries set new records each year, and the facilities arms race shows no signs of slowing. Now add player compensation.

Utah's 2024 numbers say it all: $126.8 million in expenses, $109.8 million in revenue. The football program alone turned a $26 million profit, but the department still ran a deficit because Olympic sports and administrative costs ate up all the profits. ESPN's Dan Wetzel hit the nail on the head: college sports doesn't have a revenue problem, it has a spending problem. No wonder Utah made the Otro Capital deal.

This brings me back to the fundamental reason why all this matters. New structures, external investors, faster operations—none of it works if the underlying math remains broken. An independent entity can't rely indefinitely on university bailouts or student fees. Eventually, it must stand on its own.

That's where CFOs prove their value. We're the ones doing cost-benefit analyses before the next $100 million facility breaks ground. We build reserves so one bad season doesn't sink the whole ship. Most importantly, when no one else will say it, we look at the books and tell everyone: you can't keep spending $1.10 for every $1 of revenue.

The Scoreboard Changed, But the Job Description Didn't

This matters for financial leaders because titans like Cuban are treating college football programs as franchise investments. Indiana's football program was a laughingstock, and now it's one step from a championship.

As CFOs, we can connect the dots. This is where college sports is headed. Some programs will figure it out: they'll spin off, professionalize, bring in real financial leadership, and compete. Others will continue running deficits, relying on student fees, and then wonder why they can't recruit five-star prospects.

I've seen this movie in other industries: growth explodes, old structures crumble, and the organizations that survive are those that build financial functions capable of handling the chaos. College sports is living through that story now.