After House settlement, schools confront financial reckoning

With the landmark House settlement reached the spotlight has shifted squarely to schools now confronting a financial reckoning as they prepare for the coming revenue-sharing model.

They have a rough sense of what the financial road ahead looks like. But each institution must navigate it differently based on its own interests, resources and priorities.

There is no blueprint.

There’s no widely dispersed binder full of best practices.

“We all have to be open to realizing it’s a new day,” Alabama Athletic Director Greg Byrne told reporters during SEC spring meetings.

Byrne began more than a year ago talking with Alabama coaches about the state of play with the House case. Last fall, that evolved to a “heart-to-heart” discussion about a potential outcome and wide-ranging implications. 

Now, on the heels of the settlement agreement, we know the contours of the new financial model: Schools, at their discretion, can share as much as $22 million annually with athletes. 

That marks a sea change for college sports administrative class.

Schools will need to tap into new revenue streams – likely with on-field corporate logos and beyond – and cut expenses. Byrne conceded that the new financial model means marked adjustments – even for most at the high end of the industry’s food chain. 

“As much as people think there’s unlimited money, there’s not,” Byrne said. “I think we all have to be thoughtful in how we spend, and where we spend. We can’t be top of the market in everything. And I’m at Alabama. Think about that, right?”

How will schools divvy up funds?

There are myriad questions regarding how many schools will be willing and able to share dollars with athletes and how they will choose to divvy up those dollars between male and female athletes. 

How the $2.8 billion in damages is divided among thousands of athletes, dating back to those who competed in 2016, could provide an indication of how some schools will choose to share revenue between athletes in revenue-driving and non-revenue-driving sports. 

Craig Sloan, president of Playfly Sports, told On3 the biggest question the company is hearing from schools is: “How do we make this sustainable? Meaning that it’s not just a one-time fundraise, it’s not just a one-time event to try to find new use of inventory. But how does this become something that each and every year is in their budget process? And that they’re able to sustain a different model?”

Baylor President Linda Livingstone said, in some ways, “You’re working on models without understanding the complete playing field yet, and so I think these next probably six to eight months will be really, really important. Hopefully, we’ll get some clarification on all the questions that will really help us understand better how to do the allocations.”

House settlement creates Title IX questions

There’s not a soul in an athletic department position at a power conference school who isn’t weighing the Title IX question: Does revenue need to be shared proportionally among male and female athletes to satisfy Title IX requirements? 

There is no consensus among legal experts, and the question is unlikely to be answered before courts or the U.S. Department of Education offers guidance. 

What is certain is that the clock is ticking. Schools need to solve the revenue-sharing questions before the model takes hold as early as fall 2025.

“We’re going to have to figure out how to pay for the new line item in our budget,” said Byrne, later stressing, “This is a big deal.”