I see lot's of schools are supposedly in the red, but they can find millions to pay coaches that aren't particularly good at winning sometimes.
The schools may not be making a profit off the current system, but the coaches and administrators sure the heck are. Gary Barta gets > $500k (for what?). Kirk makes how many million?
In some ways, schools run athletics like a non-profit. They are not incentivized to return money to anyone, so anything they take in will go back to administration and coaching salaries, facilities, etc. Saying most athletic depts don't make money is really kind of a given. There is no profit motive for the department as a whole (especially if they can use that as an excuse to get more money from student fees). (The people working in it certainly get paid though. How many schools with athletic programs in the red were able to find several million for a football coach?)
I don't know what the answer is, but I feel like we have lost the old ideal of the amateur athlete (and it isn't coming back.). With so much money floating around, the current system puts all the power in the hands of the administrators and coaches. In a free market system, the players (at least for revenue sports) would certainly be getting more.
If you want amateur football, go watch FCS, Div 2, Div 3. Big time football is basically a professional sport with the amount of money floating around it (but the player's are stuck like baseball players were before free agency in the 50's and 60's and the owners had all the power.)
Yes, they get a lot for their scholarship. Do they get what they could in a free market? Or are we all socialists here?
"From each according to his ability, to each according to his needs." Sounds like college athletics. Everybody gets the same. (At least the players.)
We've got athletic directors, administrators and some coaches with (sometimes) very low ability and a lot of needs, I guess.