Kentucky is Spending Money to Make Money in the Revenue-Sharing Era

Mitch Barnhart was not willing to give up the competitive advantage that comes with staying silent on Kentucky‘s revenue-sharing plans. He said six programs will split the $18.5 million — down from $20.5 million after accounting for scholarships — in a group that includes football, men’s basketball, women’s basketball, baseball, softball and volleyball. The UK AD also confirmed that his coaches are all happy with the plan, namely Mark Stoops, Mark Pope and Kenny Brooks.

“The speculation is wonderful,” Barnhart joked. “I think that not only do the fans want to know, but our opponents want to know. And so I think we’re going to sort of keep it fluid with us and keep it inside our framework.”

Between sit-downs with KSR and at the podium for UK Media Day, Barnhart also confirmed Kentucky would not cut any sports and the school would be able to fund maximum rev-share budgets. To do those things, though, they have to figure out how to make a lot of money — and do it quickly.

The sport-by-sport breakdown is privately confirmed, but how will they come up with the $20.5 million? By investing up to $110 million in facility upgrades, spending money to make it.

Some of it is simple upkeep and staying with the times with things like Wi-Fi and club space expansion.

“I think you have to find things — the things that you’re going to spend money on have an ability to produce revenue, and so we think the west end zone expansion for our club spaces has a chance to do that,” Barnhart told KSR at UK Media Day. “Wi-Fi has a chance to help us with that. There are some things you have to do because you can’t afford just to sit here and let things deteriorate.

“If I let the steel structure in our stadium deteriorate, that’s a problem. We don’t want to do that. That’s a safety issue. We have to make sure we maintain our stadium. You don’t want things to deteriorate to a spot where all of a sudden the expense to fix them has become so great it becomes not smart. So, we’re going to work really hard at that.”

Then you have swing-for-the-fences ideas to potentially move the needle, starting with the department’s transition to Champions Blue LLC to pursue new business ventures and unlock revenue streams — including the development of an entertainment district on campus with restaurants, hotels and other fan amenities.

“All the decisions we’re going to try and make, you have to weigh them in terms of ongoing maintenance and operation,” Barnhart continued. “Does it function, and does it produce revenue for you on the other side? We’ve got some really cool thoughts in terms of the way we want to produce some revenue.”

Up to this point, UK Athletics has been able to lean on typical money-making resources like sponsors, media rights partners and ticket sales. Now, it’s Barnhart’s mission to “find new buckets.”

“We also want to find new buckets. Most athletic departments have five buckets,” he said. “They have tickets. They have fundraising. They have concessions and souvenirs, contracts, your Nikes and Gatorades and things like that, your JMIs, those contracts. Then the last one is your conference revenue sharing from your television. Those are the five buckets that have generally occurred for most schools.

“How can you add three or four more buckets as you go forward? That’s our goal.”

How about concerts and shows? Tyler Childers’ event at Kroger Field was a massive success this year — expect more of that. What other unique experiences can the department come up with? Kentucky’s got the most passionate fan base in all of college athletics, so find different ways to keep bringing them in. If you build it, Big Blue Nation will come.

“Let’s put two or three more buckets out there and fill those up and that’s where the LLC comes alongside us and helps us with some new thoughts,” Barnhart said. “Maybe gives us some flexibility and some things, some areas that we can get into that might not be specifically athletics-related, but give us the ability to create revenue to do that differently without straining the folks that have been so good to us and showing up in our stadiums and our arenas.

“We’re trying to keep those as best we can at a reasonable rate.”

When many programs are struggling to simply stay above water financially, Kentucky is learning new ways to swim.