"If hedge funds could buy universities and then split them up so that the HF keeps the sports programs and they sell off the academic departments, they would most definitely do that"
Universities are already doing this. Those with modestly large endowments are functionally private equity firms whose job is to generate enough cash flow to pay themselves, top admins, sports coaches and profs.
Academics, research, govt grants etc. are all means to that end.
In my opinion, this is like complaining that the US Postal Service isn't profitable. It isn't a business, framing it in terms of profitability is missing the whole reason it exists. No one expects a middle school soccer team or a university's drama department to be profitable, but we still invest in those things because we as a society think it is valuable for students. College sports has value beyond the money people pay to watch it.
Maybe but most endowments actually have "legally?" bound or otherwise contracted uses in universities. Thats why Harvard can't just tap it's endowment to fund research the current Admin has cut. So I'm doubting that endowments are being used in this way to pay coaches.
Sure, but if an endowment is paying for, say, the football coaching staff, then that leaves that much more money free in the general fund to pay for other things.
If the endowment is paying for something that otherwise wouldn't be paid for generally, that's a different story.
This isn't really fair I think. Academic money is actually not fungible - it can't be used to fund athletics, and vice versa. Just because both pots are relatively large doesn't mean that the money itself is fungible.
How are college endowments similar to hedge funds?
For one, they put money into hedge funds as investors. And broadly, they're long on illiquid investments but have short term obligations for salaries, pensions etc. That's a hedge fund with a slightly different time horizon and intent.
Some of those short term obligations are covered thru grants, fed money. But when that dries up (eg, Harvard and Trump), you're squeezed.
Some universities with large endowments used to be referred to as hedge funds that happened to have professors. Now they happen to have pro sports teams too.
Honestly, even from a non-financial perspective, splitting them up just makes sense to me. It's baffling to me that we've come up with a system that essentially combines minor league sports teams with academic institutions of higher learning.
Except it's sort of a poor correlation. Without making a study of it the best US collegiate football programs at least tend to be large state universities--which, don't get me wrong, are often good schools if you want them to be for you--but tend not to be the schools that come up in discussions of large endowments and the like. Basketball is more of a mixed bag in that it can rely on one or two star players and hockey, as I wrote elsewhere, is very regional and relatively small schools in the North have very good teams from time to time.
The GP says it's baffling to combine sports teams with academic institutions, and you're saying it's not because those that do tend to have smaller endowments? Talk about a non sequitur
I do think that sports are part of the college/university experience which you are of course free to disagree with. There are, of course, smaller schools that have relatively minimal athletic programs. Without making a scientific study of it, I also don't think the biggest endowments really correlate to the biggest and most successful sports programs, especially in football.
You're not thinking things through. Splitting off sports from academics would wreck alumni fundraising for a lot of schools. For better or worse, when the team wins the alumni open their wallets. And the less lucrative sports would essentially disappear (especially for women).
My son is a big kid and is playing high school football. It was not on our radar, so we have begun to navigate these kinds of questions. Like - do you want to play at the next level? What do you even need to do if you would like to? But also the realization of how much money is made off of these kids and how cruel and unforgiving it can be.
The ball for soccer/association football is fairly pliable and headers are not that common. You also don't see players obviously dazed or knocked out after heading the ball. I have to think the damage from soccer headers, if any, is orders of magnitude below that of American Football.
My understanding is the baseball program at my Uni is carried by a single rich donor. I used to have a view of the baseball field out my office window but it got evicted to build a computer science building which is almost done. The new field is off campus and beautiful and fan friendly. It had one small set of bleachers before but now they fill the parking lot and set up a shuttle bus to ferry people in from a nearby shopping center.
Most of our sports teams play teams that are a bus ride away, but the baseball season starts early when it is too cold to play or spectate in upstate NY so they spend a lot on airplane tickets to play teams down south.
This was my thought as well, at least for college sports.
That said, based on the article, I imagine that the author is referring to the big revenue professional sports (“the IPO” outcome). Assuming that’s the case, these four are definitely the largest in the US by a lot.
As far as I know US collegiate baseball may be bigger at some schools but is mostly a marginal spectator thing overall. Hockey is certainly very regional but, in my experience, is a fairly big thing in the North especially at schools with good teams. In fact, I went to a school where hockey almost certainly had larger paid crowds than basketball.
There are 4x as many teams in the NCAA Div I national championships for basketball than there are for hockey.
That being said, hockey is extremely popular at some schools; Gopher hockey is more popular (with both students and alumni) than Gopher basketball at the University of Minnesota.
I always went to northern schools so my perception is probably skewed. Played intramurals in grad school with someone who went to Minnesota. I've just never gone anywhere that basketball was a particularly big deal (and was never into it myself). Hockey was the thing for my grad school crowds. But obviously college basketball is a big deal more broadly. Final four and all that.
You were probably downvoted because the comment doesn't add much value to the convo, but I agree, it was a bit difficult to read. But still interesting.. :)
There is a great quote from Michael Lewis:
"If hedge funds could buy universities and then split them up so that the HF keeps the sports programs and they sell off the academic departments, they would most definitely do that"
Universities are already doing this. Those with modestly large endowments are functionally private equity firms whose job is to generate enough cash flow to pay themselves, top admins, sports coaches and profs.
Academics, research, govt grants etc. are all means to that end.
https://www.harvardmagazine.com/2025/05/harvard-salaries-top...
Sports programs don't always or even usually make a profit.
https://www.bestcolleges.com/news/analysis/2020/11/20/do-col...
They don't return a net gain to the university, perhaps, but the people running them and advocating them are profiting nicely.
In my opinion, this is like complaining that the US Postal Service isn't profitable. It isn't a business, framing it in terms of profitability is missing the whole reason it exists. No one expects a middle school soccer team or a university's drama department to be profitable, but we still invest in those things because we as a society think it is valuable for students. College sports has value beyond the money people pay to watch it.
Is there any evidence that universities with large endowments are paying coaches with them?
Money is fungible, doesn't really matter what source the money comes from other than optics.
Maybe but most endowments actually have "legally?" bound or otherwise contracted uses in universities. Thats why Harvard can't just tap it's endowment to fund research the current Admin has cut. So I'm doubting that endowments are being used in this way to pay coaches.
Sure, but if an endowment is paying for, say, the football coaching staff, then that leaves that much more money free in the general fund to pay for other things.
If the endowment is paying for something that otherwise wouldn't be paid for generally, that's a different story.
This isn't really fair I think. Academic money is actually not fungible - it can't be used to fund athletics, and vice versa. Just because both pots are relatively large doesn't mean that the money itself is fungible.
https://news.ycombinator.com/item?id=44328786 nailed it.
How is that the same thing?
How are college endowments similar to hedge funds?
For one, they put money into hedge funds as investors. And broadly, they're long on illiquid investments but have short term obligations for salaries, pensions etc. That's a hedge fund with a slightly different time horizon and intent.
Some of those short term obligations are covered thru grants, fed money. But when that dries up (eg, Harvard and Trump), you're squeezed.
Some universities with large endowments used to be referred to as hedge funds that happened to have professors. Now they happen to have pro sports teams too.
Honestly, even from a non-financial perspective, splitting them up just makes sense to me. It's baffling to me that we've come up with a system that essentially combines minor league sports teams with academic institutions of higher learning.
Except it's sort of a poor correlation. Without making a study of it the best US collegiate football programs at least tend to be large state universities--which, don't get me wrong, are often good schools if you want them to be for you--but tend not to be the schools that come up in discussions of large endowments and the like. Basketball is more of a mixed bag in that it can rely on one or two star players and hockey, as I wrote elsewhere, is very regional and relatively small schools in the North have very good teams from time to time.
The GP says it's baffling to combine sports teams with academic institutions, and you're saying it's not because those that do tend to have smaller endowments? Talk about a non sequitur
I do think that sports are part of the college/university experience which you are of course free to disagree with. There are, of course, smaller schools that have relatively minimal athletic programs. Without making a scientific study of it, I also don't think the biggest endowments really correlate to the biggest and most successful sports programs, especially in football.
At Caltech when I attended, the football team was known to proudly lose every game.
You're not thinking things through. Splitting off sports from academics would wreck alumni fundraising for a lot of schools. For better or worse, when the team wins the alumni open their wallets. And the less lucrative sports would essentially disappear (especially for women).
The latest Oxide and Friends podcast episode is - as one may expect - a great pairing if you enjoyed reading this.
https://youtu.be/3z_TQxe9jx4
A profoundly wise and great article.
My son is a big kid and is playing high school football. It was not on our radar, so we have begun to navigate these kinds of questions. Like - do you want to play at the next level? What do you even need to do if you would like to? But also the realization of how much money is made off of these kids and how cruel and unforgiving it can be.
Have you heard of CTE?
https://www.bu.edu/articles/2017/cte-former-nfl-players/
I've always suspected that to be true, even as a kid. I wonder about the soccer players "heading" the ball. No thanks.
The ball for soccer/association football is fairly pliable and headers are not that common. You also don't see players obviously dazed or knocked out after heading the ball. I have to think the damage from soccer headers, if any, is orders of magnitude below that of American Football.
I didn't spend much time researching but here is one article backing up my assertion: https://www.orthocarolina.com/blog/heading-the-ball-in-socce...
Not the first time i see such comparison being made, but it is the first time I see someone go into so much detail about it — great read.
> but for the revenue sports (football, basketball, hockey, baseball)
I think that list is two items too long.
My understanding is the baseball program at my Uni is carried by a single rich donor. I used to have a view of the baseball field out my office window but it got evicted to build a computer science building which is almost done. The new field is off campus and beautiful and fan friendly. It had one small set of bleachers before but now they fill the parking lot and set up a shuttle bus to ferry people in from a nearby shopping center.
Most of our sports teams play teams that are a bus ride away, but the baseball season starts early when it is too cold to play or spectate in upstate NY so they spend a lot on airplane tickets to play teams down south.
Let’s go red :)
> I think that list is two items too long.
This was my thought as well, at least for college sports.
That said, based on the article, I imagine that the author is referring to the big revenue professional sports (“the IPO” outcome). Assuming that’s the case, these four are definitely the largest in the US by a lot.
Here are more details on this: https://augustafreepress.com/news/public-records-request-is-...
UVA baseball lost >$3 million in 2023 off of $1.7 million revenue. UVA football (a middling program) meanwhile is making a profit of over $20 million.
Baseball is nowhere close to football. I'd be surprised if college baseball was making more revenue than minor league baseball.
Adding the college men's basketball numbers, from [1]:
1. Duke University $45.1M
2. Syracuse University $34.2M
3. University of North Carolina at Chapel Hill $32.0M
[1] https://www.2adays.com/blog/top-10-division-i-basketball-pro...
As far as I know US collegiate baseball may be bigger at some schools but is mostly a marginal spectator thing overall. Hockey is certainly very regional but, in my experience, is a fairly big thing in the North especially at schools with good teams. In fact, I went to a school where hockey almost certainly had larger paid crowds than basketball.
There are 4x as many teams in the NCAA Div I national championships for basketball than there are for hockey.
That being said, hockey is extremely popular at some schools; Gopher hockey is more popular (with both students and alumni) than Gopher basketball at the University of Minnesota.
I always went to northern schools so my perception is probably skewed. Played intramurals in grad school with someone who went to Minnesota. I've just never gone anywhere that basketball was a particularly big deal (and was never into it myself). Hockey was the thing for my grad school crowds. But obviously college basketball is a big deal more broadly. Final four and all that.
College baseball and hockey are 'only' good for a couple million a year in the best cases, but it's still revenue.
I thoroughly enjoyed this read
I was surprised at how much sense this made
This reads as if it were written by a LLM.
You were probably downvoted because the comment doesn't add much value to the convo, but I agree, it was a bit difficult to read. But still interesting.. :)