1. The commercial reality of the amateur ideal

American college athletics developed alongside amateur ideals imported from Britain. Rooted in nineteenth-century British class culture, amateurism reflected the belief that sport should be pursued for character development and recreation rather than financial reward. American universities adopted this philosophy as college sports began to take shape in the mid-1800s.Footnote ⁵ However, this philosophy has always been at odds with two of the primary forces that have sustained college athletics: competitiveness and public interest in sports.

As intercollegiate competition intensified, universities increasingly invested in coaches, facilities, and other resources designed to improve athletic performance. In turn, as college athletics became increasingly commercial, amateurism helped universities reconcile athletics with their educational missions by providing what organizational theorist Mark Suchman calls pragmatic, moral, and cognitive “legitimacy”: the model could be presented as beneficial to students, consistent with the values of higher education, and distinct from professional sport.Footnote ⁶ However, despite the role of amateurism in the framing of how college athletics was presented, the enterprise was a commercial endeavor from the beginning.

The first intercollegiate athletics event was a rowing regatta sponsored by a railroad company.Footnote ⁷ The idea of the athletics scholarship was considered as pay-for-play dating back to the 1950s, as was the creation of the term student-athlete to avoid the legal ramifications of athletes being deemed employees.Footnote ⁸ Amateurism should therefore not be understood as the absence of commercialism in college athletics. Rather, it provided a framework through which universities could engage in commercial activity while maintaining a distinction between college and professional sport based largely on the status and compensation of the athletes.

Maintaining this distinction required preserving the separation of student-athletes and professional athletes. To do so, universities prohibited compensation of athletes beyond a scholarship. Traditionally, athletics revenues were generated and managed within the university or its athletics department, with the institution itself serving as the primary organizational home for those transactions. The rhetorical strategy in justifying this model revolved around the idea that the athletes were students who also happened to participate in sports.Footnote ⁹ It was often said that the value of the education being received by athletes was more than enough to compensate them for their efforts. Emphasizing education allowed universities to frame athletic participation as part of the educational experience even as media contracts, coaching salaries, and athletic facilities increasingly reflected the economic significance of college sport. The language of education helped sustain the legitimacy of college athletics for much of the twentieth century, but that framework would face growing challenges in the decades that followed.

The defense of the amateurism model began in earnest in 2009 when Ed O’Bannon, a former basketball player at UCLA, sued the NCAA for antitrust violations in the use of college athletes’ name, image, and likeness.Footnote ¹⁰ This was followed by Alston challenging the restriction of academic-related compensation in 2021 and House opening the door to direct payment of money to college athletes in 2025.Footnote ¹¹ Collectively, these developments did more than alter NCAA policy. They undermined the moral logic that had long justified the distinction between college and professional sports. By the time universities began creating athletics-affiliated LLCs, the central question was no longer whether college athletics had become commercialized. The question was how universities would explain and justify that reality. Suchman notes that legitimacy becomes especially consequential when established practices can no longer be taken for granted; in college athletics, legal challenges to amateurism made previously accepted distinctions between collegiate and professional sport increasingly difficult to sustain.Footnote ¹²

2. The rise of the LLC in college athletics

As the legal foundations of amateurism weakened, athletics departments faced a new challenge. They needed additional revenue to remain competitive while also explaining to stakeholders how increasingly commercial structures remained consistent with university values. The response for some departments has been the creation of an LLC. A limited liability company is a separate legal entity that can enter contracts, receive revenue, and conduct business activities apart from the university itself. Universities and athletic departments find LLCs useful because they provide a more flexible structure for commercial activities such as sponsorships, licensing, media, and revenue generation while creating some organizational separation from the university’s traditional academic and administrative operations. Examples include Clemson, Kentucky, Virginia Tech, Utah, Rutgers, and Michigan State, among others. Clemson created their LLC to focus on “maximizing revenue-generation strategies in the evolving college athletics landscape.”Footnote ¹³ The other institutions that formed LLCs cited similar reasons. The rationale communicated by these athletics departments is to (1) innovate to adjust to the evolving landscape, (2) support athletes, (3) stay competitive, and (4) separate the commercial operations of the athletics department from the university.

When using the innovation rhetoric, universities reference the need for modernization, adaptation, and the evolving landscape of intercollegiate athletics. In announcing the creation of Spartan Ventures, Michigan State University said, “The establishment of Spartan Ventures modernizes Michigan State Athletics and demonstrates the department’s commitment to operating on the leading edge of the new landscape of college athletics.”Footnote ¹⁴ This language frames organizational change as a response to external pressures rather than as a discretionary strategic choice combining cognitive and moral legitimacy from Suchman’s model.Footnote ¹⁵

Another theme that arises is student-athlete support. When Rutgers University announced the creation of Scarlet Knight Enterprises, Inc., part of the rationale, as outlined by the director of athletics, was to “generate new resources that directly benefit our student-athletes.”Footnote ¹⁶ Framing the creation of these LLCs as another way to support student-athletes combines moral and pragmatic legitimacy from Suchman’s model.Footnote ¹⁷ By invoking student-athletes in the rationale, universities are using this framing to connect these new corporate structures to the longstanding educational mission of the university. The emphasis on athlete benefits allows institutions to present a commercial approach to athletics as an extension of student support rather than a departure from traditional collegiate values.

A third theme that emerges is staying competitive. The director of athletics at Virginia Tech said the creation of Hokie Ventures “reflects our commitment to building a sustainable model for success at the highest level of college athletics.”Footnote ¹⁸ This is an isomorphic tendency that is especially prevalent in college athletics. For more than a century, universities have justified investments in coaches, facilities, and athletic infrastructure as necessary to remain competitive.Footnote ¹⁹ LLCs extend this logic into a new era, presenting the structure as necessary to achieve a valued outcome, demonstrating a combination of pragmatic and cognitive legitimacy.Footnote ²⁰

Finally, the creation of separate LLCs symbolically and organizationally distinguishes commercial activities from the academic institution. The LLC structure creates organizational distance between the university and its most overtly commercial activities. When the University of Utah announced the creation of its LLC, Utah Brands & Entertainment, it stated, “As a part of this transition, the university will transfer select core revenue-generating operations from athletics and auxiliary services to Utah Brands & Entertainment.”Footnote ²¹ Not only is the acknowledgement of the need for revenue generation a departure from the rhetoric used during the height of the amateur era, but it is also a departure from the non-profit and academic pursuits of higher education institutions. As an example of moral legitimacy, the separation of the commercial pursuits of the athletics department from the university helps manage the tension between the credibility of the academic mission and the increasingly revenue-driven realities of major college athletics.Footnote ²²

Across these cases, universities consistently describe LLCs as innovative, student-centered, competitive, and strategically necessary. What is noticeably absent are mentions of professionalization, employment of athletes, or the abandonment of amateurism. Instead, universities are framing the LLC as necessary innovation that supports, rather than detracts from, the mission of educating students. In this way, LLCs function not only as administrative structures but also as tools for maintaining legitimacy in an era when the use of amateurism as evidence of moral authority has evolved.

3. From amateurism to commercial legitimacy

The emergence of limited liability corporations in college athletics reveals a broader shift in how sport is situated within American higher education. For much of the twentieth century, universities relied on amateurism as the primary framework through which intercollegiate athletics could be understood as an educational activity rather than a commercial enterprise. This narrative persisted even as coaching salaries reached millions of dollars, conference media agreements generated billions in revenue, and athletics departments invested heavily in facilities and infrastructure.Footnote ²³ Amateurism provided a language through which institutions could reconcile these realities with their educational missions.

The rise of athletics LLCs reflects changing cultural assumptions about athlete labor and the purpose of college sports. The student-athlete remains a central figure in university communications, but that identity now exists alongside a growing recognition of athletes as economic contributors within a highly visible entertainment industry. LLCs therefore represent more than an administrative innovation. They are cultural artifacts that reveal how universities are renegotiating the relationship between education, commerce, and sport in the twenty-first century.

Despite commercialism and amateurism having long coexisted in college athletics, the creation of athletics-affiliated LLCs suggests that this framework is changing. Universities are increasingly acknowledging that major college athletics operates within a commercial environment that requires specialized strategies for revenue generation, brand management, and athlete compensation. Although the economic architecture of amateurism is eroding, institutions continue to use its legitimating language. The rhetoric surrounding athletics-affiliated LLCs demonstrates how familiar educational and athlete-centered values are being adapted to legitimate a new economic structure. Suchman’s framework helps explain this continuity: organizations often preserve legitimacy by linking new practices to values and understandings that stakeholders already regard as appropriate.Footnote ²⁴ In this case, new commercial structures are repeatedly connected to familiar ideas of education, athlete welfare, and institutional competitiveness. As universities adopt LLCs designed explicitly for revenue generation, they continue to explain these structures through familiar appeals to education, student-athlete support, and competitive necessity, while adding a new rhetoric of innovation and organizational adaptation. The result is not the abandonment of amateurism’s legitimating logic, but its reconstruction for a more openly commercial era of college sport.