With House settlement looming, schools try to answer the '$20 million question' 

With a landscape-shifting settlement in the House v. NCAA case in sight, power conference schools are providing glimpses into how they must operate in a world where they will be sharing as much as $20 million annually with athletes.

What is entering the college sports world via the expected settlement is permissive legislation in which schools can essentially opt-in to a revenue-sharing model at their discretion. But everyone knows the reality: Failing to opt-in almost certainly means failing to remain competitive in an increasingly cutthroat, high-dollar ecosystem.

And thus, schools and conferences are convening to discuss university-specific playbooks for financial viability in a new world order.

“That is certainly the highest priority conversation right now,” a prominent industry source told On3.

Late last month, Texas A&M Athletic Director Trev Alberts announced cuts of more than 12 staff members in a “reorganization related to existing and emerging threats to our business model.”

At Missouri, the contract for new athletic director Laird Veatch includes a force majeure provision related to “potential changes to the financial model for collegiate athletics given pending litigation and legislation.” Such changes to the collegiate model would prompt compensation to be renegotiated.

Iowa State delays projects due to looming costs

And then there is Jamie Pollard, the Iowa State athletic director who last week said all of the quiet parts out loud.

Eith college sports on the cusp of a revenue-sharing model, Pollard said plans for a new wrestling facility have been halted. There are no next steps looming.

“With this lawsuit getting ready to be settled, you just can’t go forward with projects like that,” Pollard told reporters. “That’s the same reason we didn’t go forward with Hilton [Coliseum]. You just can’t bond for them.”

Opening the door to schools sharing revenue with athletes will mark a “drastic change,” Pollard said. With permissive legislation, Pollard acknowledged “you don’t have to do it, and, quite frankly, from talking to most of my peers, most of us have no idea how we will do it.”

Pollard knows he has a $100 million budget and can see the only way to give $20 million to athletes is only to spend $80 million. 

“I don’t know where we’d get rid of the $20 – at least overnight,” he said. “That’s the million-dollar question or the $20 million question for all of us.”

Athletic leaders working with new math

The industry source said, “Most ADs are like, ‘OK, we know it’s coming. How do I practically apply that to my day-to-day budgeting? How many years is it spread out? What are the requirements for spending? Can it be paid through a third-party group? Do I have to cut sports?’ Everyone is discussing that.”

Eventually, monumental change is coming. Everyone knows it. And athletic directors must run their departments in a new fashion to accommodate a substantially new business model. 

“I’m guarantee that you’re going to see a lot of athletic directors hired who are businessmen and women. Not just educators,” Parker Graham, co-founder of Vestible, told On3. “Not just folks who have been in academia forever. Business leaders who are going to bring the Fortune 500 mindset to these institutions. Let’s do things that are radically different.”