House revenue sharing negotiations nearing an end

[nelsonmuntz]

As college athletics prepares for revenue-sharing fallout, leaders wonder: is a breakaway from the NCAA next?

Preliminary approval of the House v. NCAA settlement is expected Thursday, opening the door for historic revenue-sharing

www.cbssports.com

College football is about to get a lot more expensive, and a lot more complicated, for everyone. 22% of AD revenue, or $22 million, is a boatload of money for a lot of these programs, even in the major conferences. Some schools (Florida, Georgia, Alabama, Michigan, Ohio State) will have no problem covering it, but some of the schools in the Big 10 and SEC are going to struggle with this, and several of the ACC and Big 12 schools are going to struggle with this. And this revenue looks like it will be in addition to NIL revenue for the players, which will be distributed somewhat differently, but will exacerbate differences between the top programs and all others.

And this isn't just about doing the best you can as an athletic department. The big schools are going to have a major compensation advantage for players, which could make their second string better than most teams first string. The offer of playing time, which rising schools traditionally used to compete against the big boys, isn't going to be nearly as attractive when another school's backups are making twice a school's starters.

This will not just be a P2 vs. all others problem. Some schools within the P2 simply can't afford this. Football was fine when it was just revenue, but now there are a bucket load of expenses attached too. There are other implications about players clearly being employees, workers comp, and the tax implications. As I have said many times, the prestige privates have to be having discussions about whether they want anything to do with this system.

With the likely disparity between the top schools and bottom schools within conferences, you are going to see some unholy blowouts even within league play. Why would ESPN and Fox pay big dollars for that?

This is a huge shock to college athletics. I can see why the Big 12 could not make a decision on UConn. How can any league make a membership decision with this situation hanging out there? No one knows what their financial model will be.

I do think that a huge change is about to happen to college athletics. Maybe football breaks off. Maybe a bunch of schools waive the white flag and drop down. Maybe the prestige privates form their own league with their own rules. I don't know, but I would be surprised if college football looks the same in 4 years to what it looks like now.

 

[nelsonmuntz]

One thing I will add is that I think the G5 are gone. There is no reason to try to compete with the P4, because they can't afford it. Maybe pull up a few of the Top FCS leagues to form a new division, and do the best they can. There is no way for them to compete with the P4, even for backup players.

 

[UCFanInSC]

I've never been so disinterested in Big College Football.
Has anyone considered that the fans might not want to watch College Football turn into Semi-Pro Football.

 

[nelsonmuntz]

I've never been so disinterested in Big College Football.
Has anyone considered that the fans might not want to watch College Football turn into Semi-Pro Football.

I think a lot of network executives and university administrators are considering that right now.

 

[Slick]

I've never been so disinterested in Big College Football.
Has anyone considered that the fans might not want to watch College Football turn into Semi-Pro Football.

Its already Professional Football. Florida State has paid 15 MILLION for this years team which has been awful.

 

[Kolumbo]

Based on 22% of athletic revenue, Ohio State and Texas could spend $50 million in revenue sharing if they want to. The smaller P2 such as Nebraska, Oregon, Ole Miss, Miss State certainly won't be able to buy the players Texas and Ohio State get.

 

[BlueandOG]

As college athletics prepares for revenue-sharing fallout, leaders wonder: is a breakaway from the NCAA next?

Preliminary approval of the House v. NCAA settlement is expected Thursday, opening the door for historic revenue-sharing

www.cbssports.com

College football is about to get a lot more expensive, and a lot more complicated, for everyone. 22% of AD revenue, or $22 million, is a boatload of money for a lot of these programs, even in the major conferences. Some schools (Florida, Georgia, Alabama, Michigan, Ohio State) will have no problem covering it, but some of the schools in the Big 10 and SEC are going to struggle with this, and several of the ACC and Big 12 schools are going to struggle with this. And this revenue looks like it will be in addition to NIL revenue for the players, which will be distributed somewhat differently, but will exacerbate differences between the top programs and all others.

And this isn't just about doing the best you can as an athletic department. The big schools are going to have a major compensation advantage for players, which could make their second string better than most teams first string. The offer of playing time, which rising schools traditionally used to compete against the big boys, isn't going to be nearly as attractive when another school's backups are making twice a school's starters.

This will not just be a P2 vs. all others problem. Some schools within the P2 simply can't afford this. Football was fine when it was just revenue, but now there are a bucket load of expenses attached too. There are other implications about players clearly being employees, workers comp, and the tax implications. As I have said many times, the prestige privates have to be having discussions about whether they want anything to do with this system.

With the likely disparity between the top schools and bottom schools within conferences, you are going to see some unholy blowouts even within league play. Why would ESPN and Fox pay big dollars for that?

This is a huge shock to college athletics. I can see why the Big 12 could not make a decision on UConn. How can any league make a membership decision with this situation hanging out there? No one knows what their financial model will be.

I do think that a huge change is about to happen to college athletics. Maybe football breaks off. Maybe a bunch of schools waive the white flag and drop down. Maybe the prestige privates form their own league with their own rules. I don't know, but I would be surprised if college football looks the same in 4 years to what it looks like now.

I always enjoy your posts and appreciate your perspective.

 

[huskymedic]

Its already Professional Football. Florida State has paid 15 MILLION for this years team which has been awful.

… people aren’t going to be bashful. Sport is in a bad spot right now.

 

[nelsonmuntz]

Its already Professional Football. Florida State has paid 15 MILLION for this years team which has been awful.

The NFL has revenue sharing among the franchises and a salary cap. College football is a free for all, with no attempt to even try competitive balance. With the transfer portal, this sport could spiral quickly.

 

[nelsonmuntz]

Let's run some scenarios:

Good for UConn (in order of likelihood IMO):

Prestige Privates break off - I have no idea why Northwestern, Vanderbilt, or Stanford have anything to do with big time college sports. If they break off, Cal (not private, but definitely prestige), Rice, Wake, Duke, maybe BCU (barely prestige), Tulane probably want to join. Alumni and students would LOVE this, and it would get a decent broadcast deal. I could see U of Chicago and maybe even NYU upgrading to join this. This creates a lot of openings for UConn to step into.

Several schools simply bail - I don't think there is an appetite in some states to fund an athletic program that is going to lose money and still get its butt kicked, and there are going to be a lot of those in the next few years as that $20MM+ payroll kicks in but some schools are operating with almost unlimited payrolls. UConn may find an opening here.

Football breaks off - Football conferences are formed, ESPN, Fox, NBC, CBS and Warner let people know what they want, and UConn has a decent chance to find a home for football without blowing up hoops.

Streaming consolidation - If schools start to run into ceilings on streaming subscriptions, I could see an acquisition of a league like the Big East that has a lot of winter content in big cities as appealing to another league like the ACC or Big 10. This may give UConn some kind of partial membership for football in a P4 league.

Bad for UConn (in order of likelihood)

P2 breaks off, adds a few members - If SEC and Big 10 somehow take a few top programs from the ACC, the show is over for everyone not in the P2. I don't know why this would happen, because it would lose an anti-trust case while also shrinking the market and potentially putting all of college athletics into a doom loop as a major entertainment product, but industries have done stupider things in the past. It could also result in a P1, which any of the second tier schools in the SEC or Big 10 would figure out and therefore try to avoid this outcome.

P4 split off, create a salary cap, revenue share among P4 schools - This is the nightmare, show is over scenario for UConn athletics. I don't know how to handicap its likelihood. It would be a weird place for college athletics to stop, but it would meet the first rule of realignment.

Everything stops where it is - The P4 decide that any further predatory behavior is a bad idea legally, but they have such a huge financial advantage in football that they dominate that sport, and the top schools dominate within the P4. This feels like a slow motion doom loop for football, because fewer programs playing at the highest level means less fan interest in the sport, but who knows? UConn can still compete in basketball, but football is probably downgrade to whatever the G5 becomes.

Other ideas?

 

[nelsonmuntz]

While there are still some games left to play today, it is safe to say that the jury is in, and in an open, free-for-all world of NIL, the G5 can not compete. There is ONE win by a G5 school over a P4 school this season (UNLV over Houston), and I don't think there are any more candidates today. There may be a few schools that could compete with more even revenue sharing among schools, but as is, the verdict is in.

Other than the paycheck games from the P4 schools, there is no reason for the G5 to play P4 schools at this point. I see why they are setting up their own tournament. The problem for college football is this issue is going to show up within the P4 and within the G5, and within conferences. I don't know how you compete with unlimited, no salary cap, payrolls.

This will shrink the market for the sport. This is not good for college football.

 

[huskymedic]

While there are still some games left to play today, it is safe to say that the jury is in, and in an open, free-for-all world of NIL, the G5 can not compete. There is ONE win by a G5 school over a P4 school this season (UNLV over Houston), and I don't think there are any more candidates today. There may be a few schools that could compete with more even revenue sharing among schools, but as is, the verdict is in.

 

[Kolumbo]

I was gonna say our fellow NIU Huskies over ND but didn't want to jinx them. This is pure Gold! golden domer that is!

Now let's see App State over Clemson tonight.

 

[Kolumbo]

As someone on a message board pointed out, your visiting fans will now help pay your players.

Tennessee football ticket price hike in 2025 to help pay players in revenue sharing era

Tennessee announced a significant price increase on football tickets and attached donations in 2025 to fund its revenue sharing pool for players.

www.knoxnews.com

 

[Patman]

The NFL has revenue sharing among the franchises and a salary cap. College football is a free for all, with no attempt to even try competitive balance. With the transfer portal, this sport could spiral quickly.

they do that because they want all 32 teams to succeed. There is no such desire amongst college programs

 

[CJasmer]

they do that because they want all 32 teams to succeed. There is no such desire amongst college programs

Could be the same in college football. Have a league at the highest level of 40 teams. The NFL only has 32 teams so do not think it is unreasonable to think the top football league in football would have around 40 teams. There is really only 25 teams or more that compete for football championships so going to 40 seems like a good compromise. The rest of FBS can compete for G5 championship. Gives all teams something to compete for.

 

[noeynox]

Throwing this here to not start a new thread

https://twitter.com/On3sports/status/1838275613225857276?t=2NGet6x7ihKjWv9N-UqqVg&s=19

 

[Kolumbo]

$7-$9 million for a basketball player is just insane crazy talk. But I can see a program like Kentucky going large on its hoops payroll. Arkansas might be up there but it still wants to compete in football. Once we start tracking college basketball payrolls we'll find out where the Big East stands.

 

[shizzle787]

Keep in mind the Big East schools sans us don’t have football so they also don’t have the football expenses. With the BE TV deal giving every school in the league 2-3 million per year more than before, I think the league will be able to compete with the P4. Out of the 21.5 million the P4 gets to spend, I expect at least 70% at most schools to go to football.

 

[History Geek]

Keep in mind the Big East schools sans us don’t have football so they also don’t have the football expenses. With the BE TV deal giving every school in the league 2-3 million per year more than before, I think the league will be able to compete with the P4. Out of the 21.5 million the P4 gets to spend, I expect at least 70% at most schools to go to football.

Is this based on data Shiz or just a guess? I personally think the net revenue earned by P4 schools are/will be greater than the BE schools, even if they have the added expenses for football.

 

[shizzle787]

Is this based on data Shiz or just a guess? I personally think the net revenue earned by P4 schools are/will be greater than the BE schools, even if they have the added expenses for football.

21.5 million is the cap they can spend on revenue sharing. It's in the agreement.

 

[History Geek]

21.5 million is the cap they can spend on revenue sharing. It's in the agreement.

Ok. Thanks.

 

[king conn]

21 million the first year

It goes up annually

 

[Patman]

21.5 million is the cap they can spend on revenue sharing. It's in the agreement.

isnt it nice when the courts can collude with the schools against the player's interest