Louisiana College Sports Are Bleeding Millions — Could Taxpayers Be Asked to Help?

Louisiana College Sports Are Bleeding Millions — Could Taxpayers Be Asked to Help?

BATON ROUGE, La. — College sports are big business in Louisiana, but behind the packed stadiums, television contracts and passionate fan bases, many of the state’s public university athletic programs are struggling financially.

Recent financial reports show millions of dollars in deficits at several Louisiana universities, raising a controversial question as the cost of college athletics continues to climb: could taxpayers increasingly be asked to help keep college sports afloat?

In some ways, that is already happening. Louisiana has begun directing millions of dollars generated from sports-betting taxes toward public university athletic departments, while LSU has gone even further with a special taxing district that allows additional sales and hotel taxes in an area surrounding portions of the university and its athletic facilities.

Financial problems are not isolated to one school. Louisiana Tech University’s athletic department reported approximately $36.7 million in expenses against less than $25 million in revenue for the fiscal year ending June 30, 2025, leaving a deficit of approximately $11.9 million. Grambling State University’s athletic department reported approximately $14.3 million in expenses and $9.2 million in revenue, producing a deficit of approximately $5.1 million. The University of Louisiana Monroe reported approximately $23.6 million in expenses against just under $22 million in revenue, leaving a deficit of approximately $1.6 million.

UL Lafayette has faced an even broader financial crisis. Its athletics deficit has been estimated at roughly $10 million and has been identified as one contributor to the university’s much larger budget problems. LSU, despite operating one of the most recognizable and lucrative athletic brands in the country, has also faced increasing financial pressure as the economics of college sports rapidly change.

Universities aren’t simply paying for coaches, stadiums, travel and scholarships anymore. Following major changes to college athletics, schools can now directly share revenue with athletes, and Division I universities that opted into the new system can potentially spend millions of dollars annually compensating athletes. That comes on top of existing costs for scholarships, medical care, facilities, recruiting, coaching staffs and increasingly expensive competition for athletes. Louisiana lawmakers have acknowledged that many athletic departments were already operating with structural deficits before those new expenses arrived.

In 2025, Louisiana lawmakers passed legislation increasing the state’s tax on online sports betting from 15% to 21.5%. The legislation created the Supporting Programs, Opportunities, Resources and Teams Fund, or SPORT Fund. Under the law, 25% of Louisiana’s online sports-wagering tax revenue is dedicated to the fund, which benefits eligible public university athletic departments. The money is distributed equally among qualifying NCAA Division I programs and can be used for specific student-athlete expenses, including scholarships, insurance, medical coverage, facility improvements, certain legal settlement costs and Alston awards. State fiscal analysts estimated the SPORT Fund could receive approximately $24.3 million annually under the final version of the legislation.

LSU provides an example of how sales taxes could potentially become part of the equation. An LSU Economic Development District Athletic Subdistrict has been established covering a specific area around portions of LSU’s campus and nearby businesses. Beginning in April 2026, purchases within the Athletic Subdistrict became subject to an additional 1% sales tax on top of taxes already imposed within the larger LSU Economic Development District, bringing the total sales-tax rate within the Athletic Subdistrict to 12.5% on purchases subject to all of the applicable taxes. A separate 1% hotel occupancy tax was also authorized within the district. Importantly, this is not a statewide tax on Louisiana residents to fund LSU sports — it applies only within the boundaries of the special taxing district.

Louisiana Tech, Grambling, ULM, UL Lafayette and other public universities don’t have the financial power of LSU Athletics. If athletic expenses continue rising while ticket sales, donations and other traditional revenues fail to keep pace, universities and state officials could face difficult decisions: reduce athletic spending, increase student fees, rely more heavily on university subsidies, seek additional private donations or find new sources of public revenue. Special taxing districts could potentially become one option.

Supporters could argue major college athletic programs generate tourism, jobs, economic activity and national exposure for their communities and therefore justify public investment. Critics could make the opposite argument: taxpayers shouldn’t be responsible for subsidizing athletic departments that spend more money than they generate, particularly when universities are simultaneously struggling to fund academics, faculty and other core services.

Across the country, states are increasingly considering or approving public financial support for college athletic programs as universities confront the rapidly changing economics of college sports. Louisiana has already entered that territory through its sports-betting tax, and LSU’s special taxing district demonstrates that sales taxes can also be part of the financial structure surrounding university athletics. Whether Louisiana eventually expands those ideas to help other struggling athletic departments remains to be seen, but with several public university sports programs already running multimillion-dollar deficits and the cost of competing continuing to rise, the debate over who should ultimately pay for college sports may only be beginning.

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