Big Pending NIL/Portal Reform

[pmvon]

Some people may be doing this but I am not.

What is the proper division of accounting here? If the football program is profitable but the athletic department as a whole is not which one should we look at when considering the value of a football player?

What value do we ascribe to the indirect benefits the school gets from high profile athletic programs (e.g. exposure)?

The answers aren't obvious.

Don’t mean to imply you re profit.

Why does there need to be a proper accounting of revenue and expenses and profit per sport at a college. This is not a corporation. It all goes into the mix of creating an academic and social structure that is a valuable US institutional framework. If you don’t like it, train on your own and work out for a pro team.

Yes, ancillary benefits accrue. However, it’s a rat race. All of it is to keep up with the rest.So absolute benefit yes, relative is questionable.

Agree hard to quantify. Many will question the value. The downside for RU for example of not keeping up is too great. So they have to continue to fund in the red.

 

[NickRU714]

They have value. Their value is the money they already receive. People keep conflating revenue with profit. All actors are moving revenue up so profit margins are the same. The people who work in the industry make money. Are they making money greater than the inflation adjusted amount they were making before? Outside of P5 head coaches no. Now players want more of the pie, so it will have to come from other sources since most schools have no profit to distribute. So expect other sports to be cut and/or tuition and fees to increase. Others don’t seem to care that lacrosse 🥍 layers will lose an opportunity, I do. I prefer the social construct that cast a wider net. All because some kids play one particular sport. Most of whom will never play pro and will rely on the degree they would have never earned on academic merit alone to have a living.

Players don't want more of the pie. They want an equitable piece of the pie.
Same as coaches should want an equital piece of the pie.

Imagine Rutgers told HC Schiano - sorry but the AD losing $10m a year. We can only offer you $500k/year.
Yes our revenue is 4x what it was a decade ago. But we're still losing money so.
If we paid you more, we would have to take opportunities away from lacrosse players.

 

[fluoxetine]

Don’t mean to imply you re profit.

Why does there need to be a proper accounting of revenue and expenses and profit per sport at a college.

There doesn't have to be. But if one team is highly profitable while the athletic program as a whole is unprofitable, it's not completely unreasonable for a member of the profitable team to claim they are generating revenue.

I know if my division of my employer knocked it out of the park while another one lost a lot of money I would still expect to be paid for my performance and would look elsewhere if I was not. "Well but this other division lost money" would not be an acceptable excuse

This is not a corporation. It all goes into the mix of creating an academic and social structure that is a valuable US institutional framework.

Right.. but it's more complicated than this right? Rightly or wrongly there are people willing to pour money into college athletics just for the joy of "winning" (i.e. being affiliated with the team that is winning). Do players who have market value for this reason only deserve to capture that value? Maybe? I'm not sure but I don't think it has an obviously correct answer.

If you don’t like it, train on your own and work out for a pro team.

Yes, ancillary benefits accrue. However, it’s a rat race. All of it is to keep up with the rest.So absolute benefit yes, relative is questionable.

Agree hard to quantify. Many will question the value. The downside for RU for example of not keeping up is too great. So they have to continue to fund in the red.

 

[fluoxetine]

Players don't want more of the pie. They want an equitable piece of the pie.
Same as coaches should want an equital piece of the pie.

If the department loses money pre-salaries the "pie" is essentially a negative number. What is an equitable piece of it?

 

[NickRU714]

If the department loses money pre-salaries the "pie" is essentially a negative number. What is an equitable piece of it?

Great question and proves my earlier point that people only care about fiscal responsibility regarding players.

What was the pie pre-raises for HC Schiano and staff?
Or HC Pike and staff?
Or before AD Hobbs got a raise?
Or before HC Schiano was even hired in 2019?

The pie was negative if I'm not mistaken.
The all got raises though right?
What's an equitable piece for coaching staffs of a negative pie?

 

[fluoxetine]

Great question and proves my earlier point that people only care about fiscal responsibility regarding players.

What was the pie pre-raises for HC Schiano and staff?
Or HC Pike and staff?
Or before AD Hobbs got a raise?
Or before HC Schiano was even hired in 2019?

The pie was negative if I'm not mistaken.
The all got raises though right?
What's an equitable piece for coaching staffs of a negative pie?

There's no such thing. Under the standard model the coaches are doing a job and the players are playing a game. What is the "equitable piece of the pie" for the football coach at your local high school? How about the players?

 

[NickRU714]

There's no such thing. Under the standard model the coaches are doing a job and the players are playing a game. What is the "equitable piece of the pie" for the football coach at your local high school? How about the players?

What standard model?
If the players provide no value, then why is so much time spent recruiting? Why the consternation over missing out ona player or one transferring?
Just hold open tryouts among the student body and field teams.

In HS the pie is incredibly small.
Revenue is nothing. Coaches get paid minimal for coaching.

It’s the same as the non-revenue sports. Which everyone agrees the players should get minimal of the pie (just like the coaches and staff are). Scholarship (getting paid in kind) seems to be an equitable part of the pie. Maybe even too much honestly?

As you are saying in your other posts, the pie for football/basketball is much different than the AD as a whole pie.

 

[fluoxetine]

What standard model?

The standard model of school sports, which includes basically all college sports outside of power conference football and men's basketball.

If the players provide no value, then why is so much time spent recruiting? Why the consternation over missing out ona player or one transferring?
Just hold open tryouts among the student body and field teams.

In HS the pie is incredibly small.
Revenue is nothing. Coaches get paid minimal for coaching.

It’s the same as the non-revenue sports. Which everyone agrees the players should get minimal of the pie (just like the coaches and staff are). Scholarship (getting paid in kind) seems to be an equitable part of the pie. Maybe even too much honestly?

As you are saying in your other posts, the pie for football/basketball is much different than the AD as a whole pie.

I think there is a conflation here of value from revenue generation vs value from other things.

The time is spent recruiting etc because people like to win and are willing to pay for it. It's fairly obvious to me that the aggregate boosters of Ohio State or Alabama would be perfectly happy to fund a permanently money losing operation (I'm not saying those teams lose money, but if they did) for the sake of winning. The players have value in that context; they are the tools that are needed to win. But this value is nebulous and can't be measured by revenue.

On the revenue side, spending more than $x to generate $x of revenue has no value. A salesman who generates $1,000,000 in sales but spends $1,500,000 on gas and flights and entertainment deserves $0 of "the pie", and if all your salesmen do that then.. well why are you doing that? If some outside entity is willing to donate the difference in order to win the sales contest or whatever, it's still not clear what the equitable price for that salesman is. It's not a number that is related to the $1,000,000 of sales in any obvious way.

 

[Eagleton96]

I don't really see this? I don't think anyone has argued that we can't pay players because it isn't fiscally responsible. The people who are pointing out that the AD loses money are presumably doing so because they are making an argument along the lines of:

Athletics is a money losing endeavor => the players do not have a positive $ market value

Most college departments lose money. The facilities, Human Resources, finance, student life, departments etc all lose money. And of course that’s the wrong way to think about them. These departments aren’t companies with a profit and loss. They are departments inside a larger entity. They are expenses that the parent entity chooses to pay.

The school choir and all the clubs dont make money. The field hockey team doesn’t make money. They are expenses that some colleges chose to incur because they think it’s worth it.

The only reason people think of athletics as having to make money is because in many cases it has. But the overriding reasons that schools do it are for school pride, prestige, recruiting, student life, and stuff like that.

The people in the human resources department get paid the going rate regardless of whether or not the corporation they work for is in the black. I did that corporation goes belly up and can’t afford them, they go somewhere else. They aren’t the shareholders.

That’s all that that is happening here with these athletes. The Supreme Court decided that the colleges were colluding unfairly to avoid paying players. Having all the employers get together and decide that they were only going to pay the employees a scholarship was deemed to be illegal, collusion and manipulation of the labor market, (in essence). So now there’s an actual market with market forces at work. And the schools aren’t allowed to collude to decide how much they’re gonna pay the players. So now if you wanna have a winning team and get the best players you have to pay market rate.

 

[fluoxetine]

And you could say "well let the free market figure that out" but all of the pro sports figured out a long time ago that that doesn't work.. you need at least SOME measure of competitive balance or else everyone will eventually get bored and the whole thing will end.

 

[pmvon]

The standard model of school sports, which includes basically all college sports outside of power conference football and men's basketball.

I think there is a conflation here of value from revenue generation vs value from other things.

The time is spent recruiting etc because people like to win and are willing to pay for it. It's fairly obvious to me that the aggregate boosters of Ohio State or Alabama would be perfectly happy to fund a permanently money losing operation (I'm not saying those teams lose money, but if they did) for the sake of winning. The players have value in that context; they are the tools that are needed to win. But this value is nebulous and can't be measured by revenue.

On the revenue side, spending more than $x to generate $x of revenue has no value. A salesman who generates $1,000,000 in sales but spends $1,500,000 on gas and flights and entertainment deserves $0 of "the pie", and if all your salesmen do that then.. well why are you doing that? If some outside entity is willing to donate the difference in order to win the sales contest or whatever, it's still not clear what the equitable price for that salesman is. It's not a number that is related to the $1,000,000 of sales in any obvious way.

This is a great point. Yet still they are paid 250k over 4 years.

 

[fluoxetine]

Most college departments lose money. The facilities, Human Resources, finance, student life, departments etc all lose money. And of course that’s the wrong way to think about them. These departments aren’t companies with a profit and loss. They are departments inside a larger entity. They are expenses that the parent entity chooses to pay.

The school choir and all the clubs dont make money. The field hockey team doesn’t make money. They are expenses that some colleges chose to incur because they think it’s worth it.

The only reason people think of athletics as having to make money is because in many cases it has. But the overriding reasons that schools do it are for school pride, prestige, recruiting, student life, and stuff like that.

The people in the human resources department get paid the going rate regardless of whether or not the corporation they work for is in the black. I did that corporation goes belly up and can’t afford them, they go somewhere else. They aren’t the shareholders.

That’s all that that is happening here with these athletes. The Supreme Court decided that the colleges were colluding unfairly to avoid paying players. Having all the employers get together and decide that they were only going to pay the employees a scholarship was deemed to be illegal, collusion and manipulation of the labor market, (in essence). So now there’s an actual market with market forces at work. And the schools aren’t allowed to collude to decide how much they’re gonna pay the players. So now if you wanna have a winning team and get the best players you have to pay market rate.

But they aren't employees any more than the band or the field hockey team or the clubs are. It is not obvious that it is relevant that the fact that one subset of them might make a net profit for the school is relevant at all.

There are almost no college athletes that have any market value to the school itself from a pure financial perspective imo, because as you correctly point out that schools are not businesses in the first place. All of the value is derived from PEOPLE WANTING TO WIN.

 

[Greene Rice FIG]

Is it your position that the football program on its own is not profitable? I doubt that.

All depends on how you allocate revenues and expenses.

 

[Eagleton96]

much were coaches making?
How has their payments changed?
How much were Athletic D

Head coaches making a lot at P5. So maybe 150 people.
It’s gone up
Nearly all AD lose money. Look at the data I just shared.
Revenue goes up along with cost. They still lose money. Maybe more now than ever.

Th reason they (we) do it is not to make money. It's an expense. Just like the library, the music department, the volleyball team, the glee club, and the HR departments are all expenses. If you want to have an HR department, you have to hire people at the going rate. Same with a P5 football team.

You can argue that universities shouldn't have pro sports teams. And in theory I'd agree with you. But regardless of the quirk of history that brought us here...here we are. And as long as people value it, universities will spend in this area. And if they value winning, they will compete for the best players. How much they spend is up to them. Do they only spend on it if they can make a profit (that's extremely rare for any university program to make a profit)? Do they spend to win and take huge losses? Most have settled into a range of being willing have expenses exceed revenue by a little.

But it makes no sense to suggest that, given the immense amounts of money being generated, the universities should be allowed to collude to keep the compensation of the players at the value of a scholarship. It makes no more sense than saying that universities should be able to collude to artificially control the wages of HR employees. They aren't just students at this point.

 

[Eagleton96]

But they aren't employees any more than the band or the field hockey team or the clubs are. It is not obvious that it is relevant that the fact that one subset of them might make a net profit for the school is relevant at all.

There are almost no college athletes that have any market value to the school itself from a pure financial perspective imo, because as you correctly point out that schools are not businesses in the first place. All of the value is derived from PEOPLE WANTING TO WIN.

Universities compete for the best most famous faculty. And if they want a competent HR department they have to pay the going rate which is set by what other places are willing to pay.

Like it or not, mens basketball and football players are no longer just students. They are ALSO students, so that makes the situation a little special. But you can't compare them to the band.

I'll also note that colleges are not allowed to coordinate in terms of who they admit for regular students. They can't restrict competition as this would violate antitrust laws. And colleges do compete in terms of price, aid offered, etc.

 

[BillyC80]

Unless the NBA allows players to be drafted right out of high school again, I’d like to see some type of limit on freshman NIL, which would de-emphasize NIL money as a recruiting tool.

Multi-year NIL contracts that are backloaded into sophomore, junior, and senior years would also help in that regard.

 

[RUsojo]

100%

Football, basketball and NIL have zero impact on the “death of non-revenue sports”.

If they die it’s because Schools (and Taxpayers and Students) don’t want to pay for them.
There is nothing stopping a school from funding 1,000 non-revenue sports. The university just has to actually pay for it.

Like every other expense for the University incurs.
They just don’t want to. So they “blame” football and basketball.

This

 

[fluoxetine]

Universities compete for the best most famous faculty. And if they want a competent HR department they have to pay the going rate which is set by what other places are willing to pay.

Like it or not, mens basketball and football players are no longer just students. They are ALSO students, so that makes the situation a little special. But you can't compare them to the band.

Well, why not?

 

[RUsojo]

Unless the NBA allows players to be drafted right out of high school again, I’d like to see some type of limit on freshman NIL, which would de-emphasize NIL money as a recruiting tool.

Multi-year NIL contracts that are backloaded into sophomore, junior, and senior years would also help in that regard.

Pro leagues are a big part of that his but they are so heavily protected and connected that the legal case supporting “early entry” doesn’t have a chance to go through (and had failed re:NFL v Clarett) and won’t change until the leagues want it changed - and they don’t want it changed.

It would be good for everyone involved if it did change.

 

[fluoxetine]

100%

Football, basketball and NIL have zero impact on the “death of non-revenue sports”.

If they die it’s because Schools (and Taxpayers and Students) don’t want to pay for them.
There is nothing stopping a school from funding 1,000 non-revenue sports. The university just has to actually pay for it.

Like every other expense for the University incurs.
They just don’t want to. So they “blame” football and basketball.

I'm not sure about "blaming" or whatever. NIL for actual endorsements from outside sources I agree with your post. But if a currently existing revenue source that is used to fund non-revenue sports instead gets paid out to the players of revenue sports that obviously has an impact. You can still think it is the right thing to do but claiming it has no impact is clearly false.

 

[Steve91562]

Since we’ve been discussing Rutgers’ sad NIL situation and how messed up the current NIL/portal situation is, I thought it would be worth diving into the massive changes on the horizon. The pending $2.8 billion NCAA NIL settlement could reshape college sports. My take is that we will be big beneficiaries, although it's not 100% clear that it will shake out this way.

This settlement includes:

- direct revenue-sharing of up to $20 million of athletics revenue per school to the athletes. Increasing by 4% per year. The goal is to level the competitive playing field.
- each school gets to decide how they want to distribute those funds. The NCAA has developed voluntary guidance that suggests 77% to football and 16.5% to mens basketball.
- allows for the possibility of multi-year NIL contracts which would bring much needed consistency. Could those contracts be back loaded or have penalties or buyouts for players that try to leave early?
- also addresses Title IX compliance and the potential classification of athletes as employees (seems to successfully avoid those issues but will likely end in court so TBD).
- The NCAA would be allowed to generate rules that require athletes to report their NIL deals, and would scrutinize those deals to ensure that they are truly NIL and not just disguised booster payments.

The collectives would not go away, but they'd add to the funds generated by the revenue share. But the impact of the collectives would go way down if only because of the dollars involved. The largest Big Ten collective (OSU) generates an estimated 20million, PSU at 14mil, a midrange is Wisconsin at 9million, and the smallest (RU) generates an estimated 4 million. Add in the $20 mil revenue share and now the totals are OSU 44mil, PSU 34mil, Wisc 29mil, and RU 24mil. Much more balanced and competitive. Basically we go from 5 to 1 vs OSU to 2-1. Vs. PSU we go from 3.5-1 to 3-2.

Key article to check out: Yahoo Sports: How will schools distribute revenue? What’s the future of NIL collectives?

The settlement has received preliminary approval (looks good) and the schools have all starting making their plans for implementation. Congress may also act to strengthen the NCAA's hand and grant it an anti-trust exemption so that it can regulate NIL and athletes and the portal.

Discuss.

Yes, money has diminishing returns, especially when offset by intangibles, like playing time. But still believe that people like Sugar Daddy Phil or the massive giving Buckeye fan base will buy the top talent to ensure that that Oregon and Ohio St., for example, remain top premier programs.

 

[Eagleton96]

The standard model of school sports, which includes basically all college sports outside of power conference football and men's basketball.

I think there is a conflation here of value from revenue generation vs value from other things.

The time is spent recruiting etc because people like to win and are willing to pay for it. It's fairly obvious to me that the aggregate boosters of Ohio State or Alabama would be perfectly happy to fund a permanently money losing operation (I'm not saying those teams lose money, but if they did) for the sake of winning. The players have value in that context; they are the tools that are needed to win. But this value is nebulous and can't be measured by revenue.

On the revenue side, spending more than $x to generate $x of revenue has no value. A salesman who generates $1,000,000 in sales but spends $1,500,000 on gas and flights and entertainment deserves $0 of "the pie", and if all your salesmen do that then.. well why are you doing that? If some outside entity is willing to donate the difference in order to win the sales contest or whatever, it's still not clear what the equitable price for that salesman is. It's not a number that is related to the $1,000,000 of sales in any obvious way.

I agree that the value to the universities is more than revenue. Just like with a university performing arts center...usually they sell some tickets but it just offsets the greater expense and gives the string quartet a place to play. Football/basketball are just another thing universities do. It has a cost...(and in some cases a net profit but usually a net loss) and to the extent that the cost is perceived as worth it, they will pay. Just like with a performing arts center or a new student center. Not complicated.

I understand what people are saying in terms of there not being a logical connection between the revenue share and the value of the players (especially winning players) to the schools. After thinking about it more I agree that it's not logical to have the players share in the revenue but not the expense (i.e. it should be a profit share not a revenue share). But I think the revenue share is a reasonable compromise. And NCAA sports are in a very weird place right now that have the worst of all worlds. And I think the settlement/compromise addresses that.

Currently it's the worst of all worlds because the players are not accorded full employee status. Maybe on the merits they should be, but for now they aren't. If they were then we could have a league and a player's union, and the league sets rules to establish competitiveness such as rules for trades, salary caps for the teams, when free-agency comes into play, etc. It would be done just like it is in professional sports. It would be great to have rules like the NFL to ensure competitiveness.

But they aren't (yet) employees, so there is no way to set up rules like that. The settlement strikes a compromise that allocates a certain amount of $ from the revenue. In theory they call it a revenue share and try to create a logic around it. But really it's just a capped salary pool. The logic of it, or the legal authority for it, comes purely from the negotiation between the parties in the lawsuit. They are trying to mimic the outcomes from pro sports with the league and player's union, but using a novel/made up system just for this situation.

Since all the frameworks that we all think make logical sense (pure open labor market, or league with player's union and rules) aren't available in this situation due to the uniques status of student athletes, they just made something up. But I think it's a reasonable compromise.

 

[bethlehemfan]

Yes, money has diminishing returns, especially when offset by intangibles, like playing time. But still believe that people like Sugar Daddy Phil or the massive giving Buckeye fan base will buy the top talent to ensure that that Oregon and Ohio St., for example, remain top premier programs.

Suggesting raising the floor levels the playing field is faulty logic.

 

[RUsojo]

I agree that the value to the universities is more than revenue. Just like with a university performing arts center...usually they sell some tickets but it just offsets the greater expense and gives the string quartet a place to play. Football/basketball are just another thing universities do. It has a cost...(and in some cases a net profit but usually a net loss) and to the extent that the cost is perceived as worth it, they will pay. Just like with a performing arts center or a new student center. Not complicated.

I understand what people are saying in terms of there not being a logical connection between the revenue share and the value of the players (especially winning players) to the schools. After thinking about it more I agree that it's not logical to have the players share in the revenue but not the expense (i.e. it should be a profit share not a revenue share). But I think the revenue share is a reasonable compromise. And NCAA sports are in a very weird place right now that have the worst of all worlds. And I think the settlement/compromise addresses that.

Currently it's the worst of all worlds because the players are not accorded full employee status. Maybe on the merits they should be, but for now they aren't. If they were then we could have a league and a player's union, and the league sets rules to establish competitiveness such as rules for trades, salary caps for the teams, when free-agency comes into play, etc. It would be done just like it is in professional sports. It would be great to have rules like the NFL to ensure competitiveness.

But they aren't (yet) employees, so there is no way to set up rules like that. The settlement strikes a compromise that allocates a certain amount of $ from the revenue. In theory they call it a revenue share and try to create a logic around it. But really it's just a capped salary pool. The logic of it, or the legal authority for it, comes purely from the negotiation between the parties in the lawsuit. They are trying to mimic the outcomes from pro sports with the league and player's union, but using a novel/made up system just for this situation.

Since all the frameworks that we all think make logical sense (pure open labor market, or league with player's union and rules) aren't available in this situation due to the uniques status of student athletes, they just made something up. But I think it's a reasonable compromise.

I think there is a lot of good conversation on this subject and we are at very good point in the discussion to note that when it comes to profit, the issue isn’t not being able to make a profit.

The paradigm in college sports is that athletic directors are incentivized/directed to zero out their budget. Many of these schools could be directed to make a profit at all costs and do so almost immediately (via expenses).

So it is important that those who want to tie right or wrong, or a form of logic that supports non-revenue sports position because there is no profit, it’s only because it’s an unwritten rule of the business model itself. There is often no profit, or at schools that make profit no direction to maximize profit, because that is not the directive and main goal of these departments at these institutions.

 

[NickRU714]

I'm not sure about "blaming" or whatever. NIL for actual endorsements from outside sources I agree with your post. But if a currently existing revenue source that is used to fund non-revenue sports instead gets paid out to the players of revenue sports that obviously has an impact. You can still think it is the right thing to do but claiming it has no impact is clearly false.

I'll say the impact should be minimal or non-existant.
Any impacts are the responsibility of the University.

The reason being that the revenue source being "diverted" isn't related to the non-revenue sports.

They aren't taking Baseball/Volleyball ticket sales and using that money towards Football/Basketball revenue sharing.

If the University (and taxpayers) are committed to non-revenue sports, there isn't anything stopping from them replacing these funds.

 

[fluoxetine]

I'll say the impact should be minimal or non-existant.
Any impacts are the responsibility of the University.

The reason being that the revenue source being "diverted" isn't related to the non-revenue sports.

They aren't taking Baseball/Volleyball ticket sales and using that money towards Football/Basketball revenue sharing.

If the University (and taxpayers) are committed to non-revenue sports, there isn't anything stopping from them replacing these funds.

I don't understand what you are saying. Currently the revenue from TV contracts etc subsidizes the non-revenue sports. If you instead pay that out to players, then you need to find other money to fund those non-revenue sports. Sure, there is nothing "stopping" the university, taxpayers, etc from doing that in the same way there is nothing "stopping" us from spending money on anything else. But it requires extra money.

 

[Greene Rice FIG]

I don't understand what you are saying. Currently the revenue from TV contracts etc subsidizes the non-revenue sports. If you instead pay that out to players, then you need to find other money to fund those non-revenue sports. Sure, there is nothing "stopping" the university, taxpayers, etc from doing that in the same way there is nothing "stopping" us from spending money on anything else. But it requires extra money.

.......which will ultimately lead to the dropping of non revenue sports......non revenue sports that were covered by students fees and had real low budgets before teams were forced to travel to away locations that are only reachable by airplane

 

[Eagleton96]

.......which will ultimately lead to the dropping of non revenue sports......non revenue sports that were covered by students fees and had real low budgets before teams were forced to travel to away locations that are only reachable by airplane

I personally vote for cutting the HR department to expand the volleyball program.

I tried to think of some other superfluous department that could be cut, but I kept realizing that I know someone working in many of these offices and should keep my mouth shut lol.

 

[RUsojo]

I don't understand what you are saying. Currently the revenue from TV contracts etc subsidizes the non-revenue sports. If you instead pay that out to players, then you need to find other money to fund those non-revenue sports. Sure, there is nothing "stopping" the university, taxpayers, etc from doing that in the same way there is nothing "stopping" us from spending money on anything else. But it requires extra money.

I think he’s saying that money was not subsidizing the non-revenue sports directly. The non-revenue sports were operating at a loss, and the athletics budget reflected that by also operating at a loss.

It’s the schools decision on whether or not they want to keep operating those non-revenue sports at the same loss. That’s a simultaneous decision to make while also managing a $20.5M football/bball budget matter. Although it’s one athletic department, it’s part of the school, and if the school finds value in offering non-rev sports they can choose to do so while a making other changes to account for the 20.5M reallocated to revenue generating athletes. The school takes loss on many indirect “educational” deparmtments.

Whether or not that’s how things work in practice is another matter. And if it spells bad news for non-revenue sports than you get some finality to that age old question - which is schools don’t find non-revenue sports add value IF other athletes can’t bring in enough money to make the overall athletics losses tolerable.

Realistically I don’t think we will cut sports at least for a long time I think what will happen they will more closely manage expenses of those programs by making smart decisions on size of support staff, staff costs, scheduling adjustments, and number scholarships/more partial scholarships. If that’s an outcome, it still keeps intact the mission of non-revenue sports and in pure form.

 

[fluoxetine]

.......which will ultimately lead to the dropping of non revenue sports......non revenue sports that were covered by students fees and had real low budgets before teams were forced to travel to away locations that are only reachable by airplane

Yes, although if this is the way it's going maybe you see separate conferences spring up for non-revenue sports that actually make sense on a geographic level.

I think he’s saying that money was not subsidizing the non-revenue sports directly. The non-revenue sports were operating at a loss, and the athletics budget reflected that by also operating at a loss.

It’s the schools decision on whether or not they want to keep operating those non-revenue sports at the same loss. That’s a simultaneous decision to make while also managing a $20.5M football/bball budget matter. Although it’s one athletic department, it’s part of the school, and if the school finds value in offering non-rev sports they can choose to do so while a making other changes to account for the 20.5M reallocated to revenue generating athletes. The school takes loss on many indirect “educational” deparmtments.

This all sounds like accounting shenanigans imo. If you take $x that you used to have available and you pay it to football players instead, you have x fewer dollars to spend on other stuff. If you want to keep doing all the same stuff then you need to find that $x somewhere. How its accounted for is probably interesting in some ways but it can't change the underlying reality.

Whether or not that’s how things work in practice is another matter. And if it spells bad news for non-revenue sports than you get some finality to that age old question - which is schools don’t find non-revenue sports add value IF other athletes can’t bring in enough money to make the overall athletics losses tolerable.

Realistically I don’t think we will cut sports at least for a long time I think what will happen they will more closely manage expenses of those programs by making smart decisions on size of support staff, staff costs, scheduling adjustments, and number scholarships/more partial scholarships. If that’s an outcome, it still keeps intact the mission of non-revenue sports and in pure form.

If the Rutgers football and men's basketball team were a separate entity, without whatever accounting shenanigans are going on, would be a profitable entity? Would it still be a profitable entity after paying the $x out to the players? I honestly have no idea.

If the answer is "it would be profitable even after the players get their cut" then I somewhat agree with your take here. There is no reason why, necessarily, the football players should have to subsidize the basket weaving team with their profits.

But if the answer is "no, it's a loss maker" then.. well, I don't see it, the football players are just eating into the budget of the other programs by taking money out while the whole thing still loses money. Also, as Greene points out above, it is the football programs fault that the basket weaving team has to travel out to California and Wisconsin and Nebraska all the time and the incremental cost of that should probably be considered a football expense.

 

[Greene Rice FIG]

I don't know if it really possible to do an income statement for each sport. How would you allocate the revenue from the B1G? Are all the donations earmarked for a specific sport?

If we want to justify a loss or identify how much loss is OK at a department as a whole I suppose you need to quantify the value of athletic department to admissions both in terms the tuition that can be charged and the value of the increased academicness (not a word) of the students

 

[Nycrusupporter]

The standard model of school sports, which includes basically all college sports outside of power conference football and men's basketball.

I think there is a conflation here of value from revenue generation vs value from other things.

The time is spent recruiting etc because people like to win and are willing to pay for it. It's fairly obvious to me that the aggregate boosters of Ohio State or Alabama would be perfectly happy to fund a permanently money losing operation (I'm not saying those teams lose money, but if they did) for the sake of winning. The players have value in that context; they are the tools that are needed to win. But this value is nebulous and can't be measured by revenue.

On the revenue side, spending more than $x to generate $x of revenue has no value. A salesman who generates $1,000,000 in sales but spends $1,500,000 on gas and flights and entertainment deserves $0 of "the pie", and if all your salesmen do that then.. well why are you doing that? If some outside entity is willing to donate the difference in order to win the sales contest or whatever, it's still not clear what the equitable price for that salesman is. It's not a number that is related to the $1,000,000 of sales in any obvious way.

The schools are all non-profits so there is no incentive to make money, the incentive is to spend all the money that comes in . . .

 

[Nycrusupporter]

.......which will ultimately lead to the dropping of non revenue sports......non revenue sports that were covered by students fees and had real low budgets before teams were forced to travel to away locations that are only reachable by airplane

It is easy to fix some of the issues with non-revenue sports, there is no reason they should compete anywhere other than locally.

 

[socaldave]

Double spin insane