As revenue-sharing model nears, AAC has its eyes on salary floor

ARLINGTON, Texas – As power conference schools explore whether they will have the revenue to approach the salary cap of some $22 million to share with athletes as early as fall 2025, the American Athletic Conference has its sights set on the other end of the radically new financial model:

Establishing a salary floor – a table-stakes investment to compete in the league.

“I do think it’s important that we set a floor, so all our institutions are investing at a minimum level – it’s important just to create more competitive balance,” AAC Commissioner Tim Pernetti told On3 on Tuesday.

Pernetti, four months into the gig amidst unprecedented industry disruption, met with his football coaches until 11 p.m. Monday night. He said there is universal membership support for a salary floor. 

The rationale: Letting everyone invest at a baseline level and then giving schools the opportunity to go up from there signals a commitment across the conference that everyone is in it together.

“To be part of this conference, we expect you to invest at a minimum level,” Pernetti said. “Understanding what coaches need to have access to with NIL and on campus to invest, will give us a steer on maybe what the right floor is. But that’s the conversation we’re going to spend our time on.”

Is salary floor more important than salary cap?

The revenue-sharing model that will take hold from the House v. NCAA settlement is considered permissive legislation – meaning schools don’t have to take part. But Pernetti knows that’s “not the real world.” To compete in the cutthroat world of player recruiting and retention, sharing some revenue will be mandatory.

New business enterprise strategies that the league is exploring, he said, are all about enabling schools to be able to compete and share more revenue. Pernetti said he does not yet know how many, if any, AAC schools will even come close to sharing as much as $22 million with athletes. 

UAB coach Trent Dilfer told On3 that his school will not be coming close to that cap figure – “No, God, no” – and that maybe only a couple of teams in the conference would come somewhat close to that but “we’re not even in the stratosphere.”

Dilfer thinks a salary floor is more important than a salary cap to “get everyone playing the same game.”

“You’re going to a Blackjack table and some are going to the $5,000 minimum hand and some are going to the $5 hand table,” Dilfer said. “We all need to be playing at least the $100 hand. And if someone can go play $5,000 [table], good for them. Every institution at least has to be committed to at least getting to a floor. 

“We all have to be in the game. If you want to be the Yankees, more power to you. But at least be the Royals.”

AAC leaders say now is time to figure it out

Jeff Traylor, UTSA‘s coach, said he’s excited about the coming revenue-sharing model because it will alleviate some pressure on coaches so they won’t have to fundraise “around the clock.”

Echoing Dilfer’s sentiments about a floor, Traylor believes there should be a baseline institutional revenue-sharing investment that is required.

“If not, it’s not fair just to ride on the coattails of a few other programs,” Traylor told On3.

Like the rest of the industry, the AAC has a year to figure out how best to navigate a historic paradigm shift. 

“Most people would say, ‘Oh, we’ve got a year – a year is plenty of time,'” Pernetti said. “A year is not plenty of time. Like, a year is now.”