Bravo to the posters who correctly pointed out that the reason athletic departments "lose money" and major colleges "break even" is because of how they choose to spend the massive buckets of cash raining down on them. The administrative and facilities bloat at Wake Forest even since I was there 20 years ago is almost comical, on both the athletic and academic sides. I'm sure it's the same at every other major school, if not worse.
Also I'm not sure what Adam Smith's invisible hand has to do with this. There is very clearly not a free market in college athletic services. There is a massive cartel called the NCAA that strictly prohibits a free market from operating. Booster clubs around the country would be happy to pay for top talent to win on Saturdays if the opportunity was available - hell, they already do in every legal way (the aforementioned waterslides and other ridiculous facilities) and in many prohibited ways.
We are not choosing between Adam Smith and Karl Marx. In the current system the people reaping all the cash benefits (coaches, college presidents, ADs, the NCAA execs) do all they can to make sure the labor doesn't get paid anything close to fair market value. Allowing the labor to negotiate for fair payment for services is not Marx, it's basic free market economics.