When the Money Stops: What LIV Golf’s Uncertainty Can Teach College Athletics About Risk

College athletics is entering a phase where outside capital is no longer hypothetical. Between rising roster costs, facility demands, and pressure to professionalize, schools, conferences, and adjacent commercial entities are all looking at new financing structures. That includes strategic capital, revenue partners, private investment, and other forms of outside money.

That is why the recent reporting around LIV Golf matters, even for leaders who have no interest in golf. LIV is now reportedly preparing for a future in which Saudi PIF funding ends after the 2026 season, while the league seeks new long-term investment partners.  The lesson is not “outside capital is bad.” The lesson is that dependence without protection is dangerous.

Even if LIV ultimately stabilizes, the current moment is a useful case study. A league can have a powerful backer, real brand momentum, top-end talent, rising commercial revenue, and still face existential questions when the capital provider’s priorities change. The fact that LIV has hired an investment banking advisor to pursue a broader, multi-partner funding model not only reinforces the point: the next phase is not just about whether the product has value, but whether the capital structure is durable. That is exactly the kind of scenario college athletics leaders should be planning for now.

The urgency is obvious. Under the post-House model, participating schools can directly share north of $20 million with student-athletes per year, and private-capital activity around college sports has continued to expand.

The real risk is not the deal. It is dependency.

Many investors and strategic revenue partners can help accelerate growth. But, what happens operationally if the money slows, stops or disappears earlier than expected?

Athlete commitments do not disappear just because a funding source does.

This is the first and most important lesson. If an athletics department, affiliated entity, NIL collective, or commercial partner helps create expectations around athlete payments, roster strategy, retention packages or NIL opportunities, those expectations tend to outlive the capital source that funded them. That is part of why the LIV moment resonates. The league’s uncertainty is about the human side of promised economics just as much as it is about the balance sheet. Players made career decisions based on a compensation system that may look very different if funding changes. Reporting around possible pathways back to the PGA Tour and DP World Tour underscores that fallback options will not be equal for every athlete. Some stars may have leverage or recognizable market value; others may face limited routes back, penalties, or no clean landing spot at all. This is an important consideration for athlete promises and roster planning.

College athletics should take that point seriously. If a school builds roster strategy around investor-backed assumptions, but the investor exits, the institution will still be left with recruiting representations, signed agreements, donor expectations and locker room consequences. That is why leaders should avoid building athlete-facing promises on funding that is not truly secured.

What should be addressed on the front end?

If there is one key takeaway from this moment it is this: exit is not a side issue. Exit is a core deal term.

Too many conversations focus on valuation, upside, branding, governance and speed to market. There is not enough focus on what happens if one side wants out. Here are the issues that need to be addressed before the first dollar is spent:

Committed capital versus hopeful capital

There is a major difference between signed, binding capital commitments and “we expect to raise more later.” College athletics leaders need to know which bucket they are in. If a partner’s future funding is discretionary, then athlete commitments and long-term operating plans should not be built as if that money is guaranteed. LIV’s recent scrutiny has centered in part on exactly this point: not whether money has been spent, but how long support is actually locked in. Reports that PIF support may end after 2026, followed by LIV’s move to seek new investment partners, are a useful reminder that past spending is not the same thing as future commitment.

Minimum funding term and runway

Every deal should answer, in plain language:

• How long is the partner obligated to fund?
• Is the money committed all at once or in tranches?
• What triggers a pause?
• What happens if performance targets are missed?
• How much advance notice is required before funding stops?
• Is there a transition period?

An athletic department should not be learning in April that the money only runs through June—or even through the next June for that matter.

Dedicated reserves

If athlete payments and commitments or core operating expenses depend on outside funding, there should be a reserve requirement. This might mean an escrow account, a debt service structure, a rolling liquidity covenant, or a letter of credit or other credit support. Without that, institutions may discover too late that “partner support” was really just periodic cash infusions with no durable backstop.

Clear allocation of payment responsibility

If money stops flowing, who is still on the hook? That answer should be explicit for:

• Athlete compensation commitments
• Third-party NIL arrangements
• Vendor agreements
• Coaching contracts
• Revenue guarantees
• Multimedia rights advances
• Facility obligations, and
• Any shared services agreements.

This matters because college athletics partnerships are rarely just about one payment stream. A strategic partner may sit inside a larger web of commitments: technology platforms, ticketing assumptions, premium seating sales, donor strategy, sponsorship inventory, etc. If one piece breaks, the disruption can spread.

Step-in and unwind rights

Every agreement should contemplate a “money stopped” scenario. Leadership changes should be part of that analysis too. LIV’s reported board transition shows how quickly capital, governance and operating strategy can shift at the same time. That includes:

• Step-in rights for the institution or conference
• The right to reclaim or reassign key commercial assets
• Assignment restrictions
• Intellectual property ownership
• Data portability
• Transition services
• Buyout mechanics
• Change of control provisions, and
• A defined unwind process.

If a partner exists and also controls data systems, sponsorship rights, payment rails, athlete-facing communications or donor infrastructure, the school may find itself rebuilding critical operations.

NIL promises create a special kind of risk

In today’s environment, not every “promise” will sit in a formal contract. Some are conveyed through recruiting conversations, donor-backed expectations, agent interpretations and market reputation. That makes the risk harder to control.

If outside resources are being used to support NIL-related activity, institutions and their partners need guardrails around: authority to make representations, what can be communicated before contracts are signed, how renewals are handled, what happens if the funding source changes and who owns the communication plan when a commitment cannot be fulfilled. The reputational damage from broken NIL expectations may be more immediate than the legal damage. Once its known that a program’s money is uncertain, the market will react quickly.

There are usually more commitments than leaders realize

One reason these situations become painful is that leaders often focus on the primary deal and miss the shadow commitments forming around it. When a new strategic partner enters the picture, programs often begin making secondary decisions based on that partnership, such as expanding budgets and taking on new contracts. That is where institutions can get “up the creek.” Economic dependency spreads across a dozen decisions made in reliance on it.

The practical question is not just, “Can the partner leave?” It is, “What else have we built assuming they won’t?”

A better framing for college athletics: plan for a clean exit while you’re still optimistic

Strategic partners are not inherently misaligned with college athletics. In some settings, they may help schools professionalize operations, unlock commercial value and smooth the transition into the revenue-sharing era. But good market participants should welcome disciplined exit planning. In fact, one sign of a serious deal is that both sides are willing to answer the uncomfortable “what happens if” questions early. What happens if projected revenue underperforms? Fundraising lags? Leadership changes? Regulation shifts again? The structure no longer fits its mission? Athlete compensation expectations outrun available cash?

These are responsible governance questions and asking them shouldn’t be seen as anti-commercialization.

The lesson from LIV is that outside capital, if necessary, should be governed with the same discipline as any other material institutional risk. College athletics is entering a period where new money is necessary, valuable and even transformative. But money that creates long-term expectations must be matched with long-term protections. Before schools build athlete commitments, operating plans or commercial strategies around a partner’s capital, they need to know what is committed, what is discretionary and what happens if the strategy changes. The institutions that do this well will not be the ones that avoid every risk. They will be the ones that understand the risk before they depend on it.

Outside capital can create opportunity, but only when it’s supported by thoughtful planning and sound governance. James Moore’s Collegiate Athletics CPAs and Consultants can help your institution evaluate risk, strengthen financial strategy, and prepare for the future. Contact our team to learn more.

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