That's not clear to me. Google tells me there are nearly 800 university football teams in America. Alabama is obviously top-tier and is doubtlessly profitable. But how many of the other hundreds are profitable?
Furthermore, don't many players, coaches, etc, transfer up from lower divisions when they demonstrate themselves to have exceptional merit? It's not clear to me that Division 1 wouldn't be impacted if the lower divisions were eliminated. If that's true, then lower divisions are effectively subsidizing higher divisions, so it's a mistake to consider the matter on a case by case basis rather than holistically.
https://www.forbes.com/sites/davidching/2018/04/17/big-tens-...
https://www.cbssports.com/college-football/news/espn-reaches...
On that latter deal with ESPN, note that the $470m/yr ESPN pays for the CFP games is relatively in the same ballpark as the NFL rights for Monday Night Football games ($600m/yr).
The most realistic potential improvement I can see is requiring public universities to reinvest some percentage of sports program profits (mostly coming from football/basketball in the US) back into academic programs and tuition assistance for non-athletes. Currently many unversities have academics and sports existing in separate financial universes.
Edit: The same universities do reinvest football/basketball profits back into other sports programs, which is great. Athleticism in general is IMO an essential part of education. But universities need to remember their core mission is education, and everything that a university does needs to feed that mission somehow.