UNC’s Risky Belichick Math 

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This story is published in partnership with Axios Raleigh.

When the University of North Carolina at Chapel Hill hired Bill Belichick as head football coach in December, everyone seemed to notice his $10 million salary.

Add $3.5 million in potential bonuses, $10 million to hire assistant coaches, $1 million for strength and conditioning staff, and $5.3 million for other support staff, and UNC-CH was declaring a new era for football. 

The team’s $40 million budget will increase by at least $8 million, not including the $13 million that’s been pledged to compensate football players or the $7 million the school budgeted in severance pay to outgoing coach Mack Brown and his staff over the next two years. 

But even before it ramped up its football ambitions, the university had already been shoring up its athletics budget by transferring millions of dollars from other institutional funds to support varsity sports. 

UNC-CH provided $21.4 million to support athletics last year between direct payments, services, debt payments, and rental fees, according to its annual financial report to the NCAA. That figure doesn’t include student fees that go to athletics, which totaled more than $8 million last year.

Such transfer payments are the norm at many universities, but not in Chapel Hill. Between 2011 and 2022, the university provided less than $2 million a year in services to athletics, but no direct payments or facilities payments.

UNC-CH transferred the money as a new economic model for college athletics has taken root. Players can more easily move between schools and can sign licensing deals to monetize their name, image, and likeness (NIL) rights. When a series of lawsuits are settled, as soon as next month, universities will begin paying athletes directly. 

UNC-CH Athletics Director Bubba Cunningham acknowledged that his department had begun receiving university funding in a public letter last November, saying the university’s increased financial support of athletics began during the COVID-19 pandemic.

“With the changing financial model in college athletics, the University has committed to supporting our mission and providing some of the funds needed for the new revenue share,” he wrote.

But UNC-CH’s new financial model for sports goes beyond transferring money to its athletic department. It once prided itself on operating differently than universities in the football-crazy Southeastern Conference. 

When then-chancellor Holden Thorp fired coach Butch Davis in 2011 after a scandal involving improper benefits and academic misconduct and bought out Davis’ contract for $2.7 million, Thorp emphasized that the money would not come from the academic side of the university. 

“We thought we were different from Auburn,” he told The Charlotte Observer, “but now we know that we’re not. That’s a hard thing for some people to absorb.”

Now, many at UNC-CH are looking at Auburn University and other SEC schools as a model to emulate. They see the increased investment in football as a necessity if UNC-CH is to maintain its all-around athletic excellence; after the fall sports semester, the Tar Heels took the lead in the Learfield Directors’ Cup, a nationwide competition of overall sporting success.

“We’re investing more in football with the hope and ambition that the return is going to significantly outweigh the investment.”

Bubba Cunningham, UNC-CH athletic director

“Consistent with our peer institutions, the University is investing some institutional funds to the athletic department on an annual basis,” UNC-CH spokesperson Kevin Best said in an email, emphasizing that the funds do not come from state appropriations or tuition dollars. “This reflects the evolving business model nationwide and highlights the importance of athletics to our institution, our brand and our overall success.”

UNC-CH’s athletic department had $164 million in revenue in 2024, but the increase in football spending as well as expected new payments to players add significant new costs. If it wants to maintain its increased spending without additional institutional support, UNC-CH would need to increase athletic revenue by about $50 million next year. 

“This institutional support of Athletics has particularly benefited Olympic Sports as the college athletics funding model continues to evolve,” Best wrote.

If UNC-CH can’t generate enough new revenue, the university will have to continue diverting other funds to athletics, or some of the Tar Heels’ prized nonrevenue sports may be on the chopping block.

“We’re taking a risk,” Cunningham told Inside Carolina. “We’re investing more in football with the hope and ambition that the return is going to significantly outweigh the investment.”

That risk is too high for some in the university, who see the investment as a shift in priorities. 

Athletics should remain a “side story of the university,” Conghe Song, chair of the geography department, told UNC-CH Chancellor Lee Roberts at a January faculty council meeting. Song noted the low salaries paid to grad students ($20,600 per school year) and that offices in Carolina Hall had minimal heating during the winter. 

“If you go all over the world, and I’m sure most of you have seen this firsthand, you’ll see people wearing our colors and our logo, and they’re doing that mostly because of our sports teams, not because of our political science department,” Roberts responded. 

Making Cents

While it’s true that other universities are supporting athletics with institutional funds, UNC-CH’s level of support already outstrips some football powerhouses. 

The $21.4 million that Tar Heel teams received from the university last year nearly doubled the $11 million Auburn spent in direct and indirect support on its athletics programs, though it hasn’t quite reached the $28 million Auburn paid in 2023. 

Clemson University, a football juggernaut in recent years, transferred $13 million in 2024. The most successful football school of modern times, the University of Alabama, moved just $3 million to its sports department. 

The “public Ivies” that UNC-CH has traditionally measured itself against show diverging trends. The University of California, Los Angeles has boosted athletics at even higher levels than the Tar Heels, putting in $30 million last year. The University of Virginia, on the other hand, spent $9.5 million, “almost entirely due to a one-time non-operating contribution” made to its endowment, the school explained in a statement. The University of Michigan contributed less than $200,000.

North Carolina’s other flagship school, N.C. State University, provided $14.5 million in indirect support to its athletic department, but it explained in a statement that those were internal loans for capital projects. Without them, N.C. State’s support was only $3,768.

In his letter last November, Cunningham told Tar Heel fans that his department would have to “adjust the way we have operated in order to generate more revenue” to create a solid financial footing in the new world of college sports. 

The historic NCAA settlement will transform the economics of athletics. The three lawsuits leading to it have already enabled players to sign endorsement deals with private companies. 

Universities are expected to pay damages to former athletes who weren’t allowed to sign similar deals, which Cunningham estimated would cost UNC-CH between $1 million and $2 million a year. Schools will also be able to pay athletes a portion of their revenues. The initial revenue-sharing pool will be up to $20.5 million per school.

“We thought we were different from Auburn.”

Holden Thorp, former UNC-CH chancellor

In addition to cutting nonessential costs and increasing university funding, Cunningham listed five new revenue streams to offset the cost of paying UNC-CH athletes.

For example, Cunningham said UNC-CH would introduce alcohol sales at indoor events. (It began selling alcohol at outdoor events in 2019.) But a December 2023 audit showed that the university earned $125,000 from alcohol sales at a 2023 football game against the University of Minnesota. If UNC-CH earned the same revenue per visitor with sold-out crowds at each of the men’s basketball team’s 15 home games this year, it would earn only an additional $907,000.

Cunningham also mentioned hosting special events, like the soccer match between U.K. teams Wrexham and Chelsea that brought a sold-out crowd to the 50,500-seat Kenan Stadium in 2023. But an athletics official told Triangle Business Journal the school made “well below $500,000” from the event.

UNC-CH will also increase ticket prices. If the school follows the University of Tennessee, which added a 10 percent talent fee to ticket sales in addition to a general price increase of 4.5 percent, for all athletics tickets, it would net an additional $4.5 million. (Tennessee only added the talent fee to football season tickets.) UNC-CH removed about 10,000 seats from Kenan Stadium in 2018, and it won’t be able to sell dramatically more tickets than it’s sold in recent seasons.

Those revenues leave the Tar Heels well short of the $20.5 million they would need to fund revenue sharing, much less the additional cost of Belichick and his staff or returning to a self-sustaining athletics program. 

Ultimately, the Belichick bet will turn on the last two options Cunningham identified: donations and corporate sponsorships. UNC-CH leaders’ hope is that the excitement around Belichick, who won six Super Bowls as head coach of the New England Patriots, will boost both. 

“Football plays an increasingly significant role in college athletics, with all of our peer institutions making substantial investments in the sport,” Roberts said in a statement. “To compete at the highest level, we brought in one of the greatest coaches of all time, Bill Belichick, to lead our team. There is tremendous excitement within our program, across the state and throughout the country about Coach Belichick and Carolina football.”

Both Belichick and his general manager Michael Lombardi have been frequent guests on national sports media, and the hype has grown enough that ESPN has already committed to airing UNC-CH’s 2025 season opener in primetime.

Media rights are the key economic driver of college athletics, and football dwarfs every other sport. 

With a recent Atlantic Coast Conference settlement changing the payment structure next year to further reward schools with big media footprints, the increased viewership will pay off even more. ESPN reported that top-earning ACC programs could see an additional $15 million a year.

Lombardi also publicly discussed plans to feature UNC-CH’s football team on HBO’s documentary series Hard Knocks. Though that deal fell apart, CBS Sports reported that the team is exploring other options. In addition to any direct revenue from those deals, the exposure makes UNC-CH more attractive for advertisers who Cunningham said will begin placing their logos on UNC-CH’s fields, courts, and uniforms.

However those deals work out, though, UNC-CH will still heavily depend on the Rams Club, its official athletics booster. The organization received $76 million in contributions and paid out $61 million in scholarships and other financial assistance to UNC-CH in 2022, the last year for which tax information is available.

“Through The Rams Club, we plan to increase the number of full scholarships we offer next year,” Cunningham said in an emailed statement.

But the Rams Club and its donors will also have to contribute heavily to any increase in NIL funding. Though UNC-CH helps facilitate those deals, they officially are organized through a private company, Old Well Management, which works with the Rams Club to fund them.

Cut From the Team

The focus on bringing in more athletics revenue places a burden on UNC-CH’s 26 nonrevenue sports. 

Some inside the university worry that investing heavily in football and basketball could harm the long-standing pride in and funding for acclaimed Tar Heel programs like women’s soccer, field hockey, and other Olympic sports, like track and field and wrestling. 

Once final, the revenue-sharing settlement will bring big changes to nonrevenue sports. The NCAA currently limits the number of scholarships that each school can award, but not the number of athletes each team can have. The settlement will instead include roster limits, which many believe will reduce the number of walk-ons and partial scholarship spots—something that could hurt Olympic sports more, Yahoo reported. 

Cunningham said last year that UNC-CH offers the equivalent of 330 scholarships to 530 of its 850 athletes. (Some students receive partial scholarships.) Under the settlement, UNC’s number of athletes would fall to 735. 

Cunningham said he’s committed to protecting the 28 sports programs at UNC-CH and to increasing the number of athletes covered by athletic scholarships. That’s the third-highest number of varsity sports in the ACC behind newcomers Stanford (36) and the University of California, Berkeley (30). 

“Carolina has long been committed to providing opportunities through a broad-based athletics program, and continuing to support as many championship opportunities as possible is important not only to our Department of Athletics but also to our University,” Cunningham said in a statement, noting sports attract more than a million visitors to Chapel Hill every year. 

But UNC-CH’s 26 nonrevenue sports lost $23.2 million last year. That’s one reason most major football schools maintain far fewer teams than the Tar Heels. Michigan is comparable, but Texas and Auburn have only 17 varsity teams, Clemson 19, and Alabama 16.

And the cost of nonrevenue sports will only grow. As realignment has brought teams from Texas and California into the ACC, conference competitions mean flying the 101 members of the Tar Heel men’s and women’s track and field teams across the country instead of busing them around the southeast. 

“I’m a big supporter of athletics, and I think you would lose a great deal if you diminish opportunities,” said Art Padilla, a former UNC System vice president who worked for President William Friday, co-founder of the Knight Commission on Intercollegiate Athletics. “It’s a question of the scale of it. If you have an intramural swim club or an extramural swim club, many of the same benefits would be there.”

Football isn’t the only sport for which alumni and trustees have called for UNC-CH to increase its investment. The basketball team’s relative struggles on the court this season and up-and-down roster construction during the NIL era have led to growing concerns that the historically elite program is on the decline. 

“The old model for Carolina basketball just doesn’t work,” coach Hubert Davis said on his radio show in early February. “It’s not sustainable. It has to build out because there’s so many things in play with NIL, the transfer portal, agents, international players. You just need a bigger staff to be able to maintain things.”

Since then, the university has also pledged to increase its investment in that team, hiring Jim Tanner, a UNC-CH alum and a sports agent for NBA players, to be the basketball program’s first general manager. His salary is reportedly more than $1 million, and he is expected to hire several staff members. 

“If you go all over the world…you’ll see people wearing our colors and our logo, and they’re doing that mostly because of our sports teams.”

Lee Roberts, UNC-CH chancellor

Many people have pointed to the SEC’s dominance of this year’s college basketball season as proof that a rising tide in football will lift other sports as well. But there are concerns that basketball could suffer at UNC-CH if football gets more institutional support. 

Internal tensions between basketball and football supporters occur “at every school,” Thorp, the former chancellor, told Axios and The Assembly. “But it’s much more acute at a basketball school, and probably more so at North Carolina than almost anywhere I can think of.”

At the same time, the university is contemplating the future of the Dean E. Smith Center, the 21,750-seat basketball arena that opened in 1986 and is showing its age. The university is considering several options, from extensive renovations to building a new arena, potentially on property near the old Chapel Hill airport, which has room to build a mixed-use development much like what’s planned around the Lenovo Center in Raleigh. 

Roberts told the Triangle Business Journal in February that renovating the existing building might be too expensive, with a replacement roof alone costing somewhere between $80 million and $100 million. 

“So, you start looking at what it would cost to address those issues in the existing building versus what it would cost to build something new,” Roberts told the outlet. A new arena could cost around $375 million, the price tag for the University of Texas’ Moody Center, which was built in 2022.

But not everyone believes now is the time for the school to invest a huge sum in creating a new basketball complex off campus, including former basketball head coach Roy Williams. 

“I love the Smith Center. It’s on campus where I think it should be, and we can make it better, so let’s make it better,” Williams told Axios in February. “We’ve got enough problems financially in college athletics. Let’s not be looking for other ways to need money.”

Looking South

While Thorp may have once wanted to distance his university from any comparison to Auburn, the SEC has become an attractive goal for many within the UNC-CH community. 

The conference has leveraged its dominance in football into financial windfalls for its members and an increasing number of applicants. 

It’s not among the schools to which UNC-CH typically compares itself, but many in Chapel Hill point to the University of Alabama as an example of how football can boost a campus.

The school’s football success has not only increased applications to the university but also attracted students with a higher academic profile. That has come from a surge in out-of-state students—a segment that UNC-CH caps at 18 percent of the student population, though there are discussions about raising it. Around 55 percent of Alabama’s students are not state residents. 

“There’s a virtuous circle for these top-tier universities,” Brad Briner, a former UNC-CH Board of Trustees member and current state treasurer, said of football’s impact across the South. 

He said he and his daughter, a high school senior, had recently taken stock of schools she might apply to. “I hadn’t done that in 30 years,” he told Axios and The Assembly. “It is unbelievable how some of the flagship universities in the South have changed their stature.” 

“And you have to ask yourself the question, ‘Why is that?’” he added. “There’s a virtuous circle that honestly starts with football, that leads to more applications, that leads to higher quality students, it leads to better professors, it leads to more money to the university, which leads back to better football. And I would love if that weren’t exactly the case, but I think there’s no denying that it is the case.” 

If that investment has worked out so well for those schools, “I don’t know why it wouldn’t for UNC,” he said. 

Football is an excellent way to engage alumni for donations, current UNC-CH trustee Jennifer Lloyd argues. 

“What we know is, in order to fundraise, you need engagement, and you need alums who have a vested interest in what’s happening here at the university,” Lloyd said after Belichick’s first press conference. “And we know that our sports programs are the front door of that. So, it all works together.”

However, several academic studies have shown the return on athletics to be fleeting, including one from Smith College that concluded, “Investing in creating a national championship basketball or football team entails very high risk for rather ordinary returns.”

In addition, unlike many of those flagship schools that have seen success in conferences like the SEC and Big Ten, UNC-CH’s student body and alumni base are smaller. 

The university has 20,681 undergraduate students. That’s thousands of students fewer than schools like Alabama (33,400 undergrads), Michigan (33,700), Florida (34,900), and UCLA (33,000). 

UNC-CH is trying to close that gap. Roberts has noted that the school used to enroll around 5 percent of North Carolina’s graduating high school students. That number has fallen to around 3.5 percent. 

He’s put forward a proposal to increase UNC’s undergraduate population by 5,000 over the next decade. 

But even if UNC were to expand its alumni base, it remains disadvantaged financially to some competitors because the ACC’s television deal is worth less than the SEC’s and Big Ten’s. 

The average SEC school received a distribution of $52.5 million last year, mainly fueled by its television contract with ESPN. In comparison, the ACC’s average distribution came in around $44.8 million—though its distribution model is changing. 

Of the school finances tracked by USA Today, UNC-CH’s revenue from athletics trails every SEC school but one: Mississippi State. 

While Florida State and Clemson were public with their attempts to leave the conference, UNC-CH has been more muted. But the school was also exploring its options, The Athletic reported, and it hired the powerful law firm Skadden, Arps, Slate, Meagher & Flom LLP to advise it. 

“There’s a virtuous circle that honestly starts with football, that leads to more applications, that leads to higher quality students, it leads to better professors.”

Brad Briner, former UNC-CH trustee

Many believe that UNC-CH will be an attractive recruitment option for either the Big Ten or the SEC despite its smaller alumni base, primarily because of its presence in one of the country’s largest and fastest-growing states, its national brand, and its academic reputation. Despite all of its growth, for instance, Alabama sits 144 spots below UNC-CH in U.S. News’ annual rankings of universities. 

And UNC-CH is likely motivated by a fear that if it doesn’t join one of those two leagues, it could be left behind financially, said Charles Clotfelter, an emeritus professor at Duke University who wrote the book Big-Time Sports in American Universities. 

“There has been a jump in the degree to which the major conferences have consolidated,” Clotfelter said, noting the moves have been driven by television contracts and a desire to create a “mini-NFL.”

“It’s like, if you’re not a member of one of the two dominant leagues, you’re going to fall by the wayside,” he added. “Those forces might pull UNC into one of the other mega conferences.”

But the long-term success of UNC-CH’s investment into football might still depend on Belichick turning the football team into a national contender. SEC football’s finances might help Alabama; it’s less clear that it helps Mississippi State (2024 record: 2-10). High ratings and excited donors tend to follow success. 

“Part of football success is winning games, which is a zero sum game by definition,” Briner said. “Not everybody can be Alabama, it turns out.” 

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Zachery Eanes is a reporter with Axios Raleigh, where he covers everything from statewide business and economic trends to local politics.