UK Athletics moving into new corporate entity
- Thread starter RoyKent
- Start date
Very interesting. I also see other schools following suite with doing something similar. It only makes sense with the new landscape.
Are we gonna set a trend and actually do something creative? Hopefully this helps Football be able to compete as well.
Hahahaha
So the NCAA is paying fines for their own little violations , huh?
TWO YEAR TELEVISION BAN FOR NCAA EXEC'S PLZ!!!
Hahaha - i DO entertain easily
So the NCAA is paying fines for their own little violations , huh?
TWO YEAR TELEVISION BAN FOR NCAA EXEC'S PLZ!!!
Hahaha - i DO entertain easily
For those that don't read the article, here is the most important part:
Barnhart and Kentucky spokesman Jay Blanton said the estimated $50 million increase in expenses comes from its expected NIL payments to athletes (likely $20 million to $23 million), an increase in the number of athletic scholarships it awards ($4 million to $5 million), inflation, spending by the school in connection with efforts it can make to assist athletes with outside NIL deal and an expected loss of sponsorship revenue from companies that instead choose to make NIL deals with athletes.
Humble brag here, but I posted this on Friday (I actually know what I'm talking about sometimes):
There is no way that Kentucky can direct $10 million from donors to basketball NIL, another $10 million from donors for football, another $22 million of their annual revenue to revenue sharing and an additional $5 million to the increased scholarship limits and keep their head above water.
In FY24, UK's projected revenue from the K Fund was $32 million. A majority of that $20 million combined NIL is coming from people that usually give that money to the K Fund but are giving to NIL instead, or giving less to K fund than they normally would. Add all of that together and and you're all of a sudden in the hole by $40 to $50 million as an athletic department.
The financial ramifications on big time athletic programs is going to be massive.
Barnhart and Kentucky spokesman Jay Blanton said the estimated $50 million increase in expenses comes from its expected NIL payments to athletes (likely $20 million to $23 million), an increase in the number of athletic scholarships it awards ($4 million to $5 million), inflation, spending by the school in connection with efforts it can make to assist athletes with outside NIL deal and an expected loss of sponsorship revenue from companies that instead choose to make NIL deals with athletes.
Humble brag here, but I posted this on Friday (I actually know what I'm talking about sometimes):
There is no way that Kentucky can direct $10 million from donors to basketball NIL, another $10 million from donors for football, another $22 million of their annual revenue to revenue sharing and an additional $5 million to the increased scholarship limits and keep their head above water.
In FY24, UK's projected revenue from the K Fund was $32 million. A majority of that $20 million combined NIL is coming from people that usually give that money to the K Fund but are giving to NIL instead, or giving less to K fund than they normally would. Add all of that together and and you're all of a sudden in the hole by $40 to $50 million as an athletic department.
The financial ramifications on big time athletic programs is going to be massive.
Well I’m glad we’re taking what seems to be unprecedented steps to head it off in some ways and get it under control. Hopefully it ends up being a better positive and a boon for our NIL and recruiting efforts.
Our athletic department made a creative move. Nice.
I'd also call hiring Pope,when he wasn't one of the top picks, as creative too. And its obviously working out. Mitch has been on a roll.
I'd also call hiring Pope,when he wasn't one of the top picks, as creative too. And its obviously working out. Mitch has been on a roll.
If all of this moves Universities to move into a Pro model, then wait for it, Lexington Center will raise the rent, also to concessions vendors, they prices will skyrocket out of control and such.
This first move is going to be the tip of the iceberg. Average fans more than ever in a few years will not be able to smell the inside of Rupp.
This first move is going to be the tip of the iceberg. Average fans more than ever in a few years will not be able to smell the inside of Rupp.
OK, all that makes sense. The immediate question I have is it does nothing to change the conversation folks have engaged in the last several years, that we are headed towards a time of "haves and have nots" - and if anything, would seem to emphasize and accelerate that notion. Some schools may be able to find an extra $50 million laying around - many won't. And yes, I know we are already in and have been for some time a period of haves vs have nots, but it feels like we are heading for something more formal, like teams breaking off into their own divisions or something......
Bud, they’re already charging as much as they can get away with. That’s capitalism. They’re going to maximize revenue either way. This way the athletes get some of it instead of the house swallowing it all. It will all balance out, I promise.
Very, very few imo. I just cannot see a university president and BOT agreeing to take General university funds to pay athletes. Maybe they will subsidize some to get started and then back off to nothing a few years later, but even that would be a stretch for most universities.
Trev Albert’s, Texas A&M AD, said it best…College athletics doesn’t have a revenue problem, it has a spending problem.
I think you will see something similar to the late 70’s when Division I split into IAA (now FCS) and IA (now FBS).
Going to be interesting how schools disperse 22 million alloted to them for nil sports . Alot of programs will fall by the wayside . This may explain why there was so much money poured into this season for nil . That's if the courts indeed make this a law .
So Champions Blue LLC.... I like it I always give Mitch a lot of crap but it seems like he's trying to be out ahead on this.
www.espn.com
Kentucky looks to make athletic department LLC
Kentucky will ask its board of trustees on Friday to approve a plan to convert its entire athletic department into an LLC, a move the school says will position it to adapt to the new climate of collegiate sports.
www.espn.com
Also look for the same thing AR is doing raise your donation level for your season ticks.
There was an article about Ohio St winning the
Football title but showing debt or financial loss as an Ath Dept
Is this the same type thing you're noting here?
Makes sense/.hadn't occurred to me
University funding is very hard for me to understand
The Ohio State situation is that they went into the red $38 million. I'm assuming they will cover all of that in reserves, but you can only do that so many times before you drain the bank.
What UK is doing is making sure that doesn't happen, knowing if they maintained the status quo, they would be in the red significantly, so they are rolling out this new model that let's them operate completely different from a financial perspective.
I think UKAD has actually helped pay University bills.
However, most ADs probably are not in that kind of position.
Not going to argue that the Uni side should pay athletic bills, but we all know they blow a lot of money on all sorts of BS.
UK currently pays the following to the university:
$3.5 million annually to help pay off the Science Building
$1.1 million annually to the president's office for scholarships
$22 million annually for scholarships/academic awards
The $22 million works differently on all campuses, but I believe UK has one of the highest scholarship payments to a university. I just looked up the University of Georgia as an example and their athletic department pays $12.5 million back to the school for scholarships/academic awards.
… I understand the need to protect the university of Kentucky and all universities as a matter of fact, from the nightmare of lawsuits that are probable to follow with this revenue sharing deal …..
It is not a new concept what Mitch is proposing: still use the nonprofit umbrella of University of Kentucky for tax benefits and revenue raising name recognition , to perform an activity that you are saying is related to university programs : college athletics, for which you don’t want to pay UBIT ( exclude from tax on unrelated business income ) , when you generated revenues that among other things include:
There are already efforts in Congress that are looking to increase the tax on university endowments, and revoke government exempt status to certain universities and hospitals for different reasons….
This type of efforts could muddy the waters even more…but is a good thing what Mitch is trying, Would hold water, in court of law, if someone tries to break the corporate veil, I have no idea , as I am not a tax lawyer, and these things tend to get complicated very easily….
At least , Mitch is trying to stay ahead of the game…. This is another example how NCAA failed its members, by not creating or updating its legal framework of operating to todays realities….Instead NCAA is happy to collect 40% of the 1 billion March madness revenue for their own use…..
It is not a new concept what Mitch is proposing: still use the nonprofit umbrella of University of Kentucky for tax benefits and revenue raising name recognition , to perform an activity that you are saying is related to university programs : college athletics, for which you don’t want to pay UBIT ( exclude from tax on unrelated business income ) , when you generated revenues that among other things include:
- Admission fee revenue from athletic events.
- Admission fee revenue from performances of students
- Businesses provided for the convenience of students, faculty, and staff.
- Annual fundraising events
There are already efforts in Congress that are looking to increase the tax on university endowments, and revoke government exempt status to certain universities and hospitals for different reasons….
This type of efforts could muddy the waters even more…but is a good thing what Mitch is trying, Would hold water, in court of law, if someone tries to break the corporate veil, I have no idea , as I am not a tax lawyer, and these things tend to get complicated very easily….
At least , Mitch is trying to stay ahead of the game…. This is another example how NCAA failed its members, by not creating or updating its legal framework of operating to todays realities….Instead NCAA is happy to collect 40% of the 1 billion March madness revenue for their own use…..
Getting ahead of what's to come. UK is one of the few schools that will be able to do this and do it well.