I recently talked to Gaul about the intricacies and implications of the college-football business model, which can be problematic because there is a lack of incentive for big schools to reel in their spending, and the example that sends to smaller, less-accomplished programs to try to overspend their way to success. We talked about what a football team can—and can’t—do for a university, as well as how a number of schools are spending massively in order to keep up with the programs, such as Michigan and Texas, that comprise college football’s 1 percent. The interview that follows has been edited and condensed for clarity.

Adrienne Green: In your book, you talk about the elite football programs working off of a “new financial model” that has changed how universities interact with their football programs. Could you explain this new model?

Gilbert M. Gaul: College presidents are uncomfortable with what's happening, particularly with their football programs, and to an extent with their men's basketball programs. So they came up with this idea. They would tell their athletic departments, ‘Okay, if you want to grow bigger and richer, fine, but we don't want to use university money. We don't want to use general revenues. We want you to go off and raise this money on your own.’ Basically, setting them up as stand-alone businesses in a corner of the campus. And the schools I'm talking about are the 65 members of the five so-called “super conferences.” And then you have these 60 other schools trying to play Division I football, like Akron and Eastern Michigan and New Mexico State, where the model doesn't work for them. They're really not making money.

One of the things they came up with was this whole notion that you can charge your best fans a mandatory fee or payment—call it a “seat donation”—so in order to get a seat at the stadium, you have to pay above and beyond the face value of the tickets. You can charge them thousands of dollars—in some cases it's $10,000 or $20,000. There's a waiting list at Alabama of 26,000 fans waiting to get a seat. And then you have the television contracts. The cable companies and particularly ESPN have been willing to pay more and more over the years because they get live content.

The third piece of this business model is the corporate money—the money from Nike, Under Armour, Adidas that comes into the programs, the apparel deals and the licensing and marketing arrangements. And then the fourth prong is season tickets, which have been escalating in price.

Just the top 10 football teams had revenues of about $229 million in 1999 and by 2012 it had gone up to nearly $800 million. And they've just continued to go up in the last two years. The amount of money coming in is extraordinary, and that explains why you see the salaries for football coaches go through the roof; it helps to explains why you see the schools building these gigantic new stadiums; it helps explain why the schools invest all this money in these academic support programs to keep the players eligible and on the field; it helps explain why you see the side of the athletic department explode during this time, going from 100 employees to maybe 400 employees. All of this stuff is tied together.