I posted this buried in the now 11-page Portal thread. I thought it worth posting on its own. If my math is wrong, or I have wrong data, or a wrong understanding of how the revenue sharing works, please feel free to offer a corrected explanation.
BUT ... I think people may be underestimating the positive significance of the revenue sharing for a team like RU in the scheme of the college sports (both football and basketball) landscape. Or maybe I am just hoping, eh?
If I understand how the revenue sharing works, I believe you are missing the mathematical benefits RU will get vs many other programs. If I am wrong with how the revenue sharing is supposed to work, someone will surely correct me - which would be welcome and appreciated. In the end, this is MATH ... and the math helps mid-level P4 schools like RU more than any other level programs - relative to the richer programs and the non-P4 conferences. How so?
My understanding on the revenue sharing is that it is not $20.5 million, rather it is UP TO $20.5 million ALLOWED to be shared with the athletes, from the school revenues ... and it is supposedly UP TO that $20.5 million, based on a PERCENTAGE of total athletic department revenues (22%?). So if a school has $93 million OR MORE of athletic department revenues, then they have UP TO $20.5 million they are allowed to allocate and share to individual athletes, directly from the school. If a school has $150 million (or $2000 million - like Ohio St, Michigan, some of the SEC schools, for example), they STILL are only allowed to allocate and share UP TO $20.5 million, a lower percentage ... the $20.5 million is a SALARY CAP, in essence. If a school has $50 million in athletic department revenues, their "cap" is not $20.5 million, but 22% - or $11 million ... but even so, if a school only has $50 million of athletic department revenues, it is going to be tough to allocate even that $11 million, given other athletic department expenses required. After all, the money doesn't just magically appear, it has to come from SOMEWHERE.
So, lets look at the P4 schools - those with major football programs. Those conferences (the Big 10, SEC, Big 12 and ACC) have media rights packages that dwarf all other conferences. The Big 10 schools are getting, what, $75 million per school just from media rights? Maybe $80 million per year - and the contract escalates. The SEC probably gets somewhere close to that, though a little less. I think the ACC media rights contract works out to less than $40 million per team - maybe $35 million per team. The Big 12 is somewhere in between. PLUS there is the College Playoff contract, which is separate, reports say the SEC and Big 10 get 60%, amounting to $20-$21 million PER SACHOOL, while the Big 12 and ACC get $12-$13 million per school. PLUS all these schools, in addition to their basketball tickets and concessions revenues, also get very large football tickets and concessions revenues - which the non P4 teams lack. Even at Rutgers, RU probably gets at least $1.6 million PER FOOTBALL GAME ticket revenues - maybe more - plus concessions and parking, which often are close to the same as the tickets, if not more ... so figure $3 million per game. Of course, there are expenses associated with this stuff (especially concessions, which may be a contract with a provider) - but that is separate from REVENUES. College sports accounting is strange, often, and different schools use different methods (no GAAP requirement) - which is why the so-called "subsidy" different schools show are not apples to apples - and RU's accounting is particularly weird, and in my opinion overstates the headline institutional "subsidy" we often see reported.
Anyway, I digress. The MAIN point is that every Big 10 and SEC school, and probably every ACC and Big 12 school, generates at least the minimum $93 million of athletic department revenue needed to allow each team to allocate the full $20.5 million capped revenue sharing to individual athletes.
The NON-P4 conferences get a LOT less revenue though, since they do NOT have material football ticket/concession revenues (their ONLY revenue producer is men's basketball, mostly)., and VASTLY lower media rights deals. So ... I have seen reported on THIS site state Big East teams, for example, will get about $7-$8 million per team per year ... but that seems high. The Big East signed a $500 million deal over 12 years - that is about $41 million per year. They have 11 teams - that works out to $3.7 million per team per year. But another source indicated the revenue is about $80 million per year, of about $7.3 million per team. Either way, the math is what it is - and let's use the higher number for the purposes of THIS exercise - be generous. The A-10 ... who knows ... maybe $1 million per team, if they are lucky? The AAC probably does better, because they have football. And for Big East teams - lets say ... strange. For example, Villanova (probably generates the most revenue of Big East teams - except for maybe UConn), I have seen athletic department revenue listed anywhere from $40 million to $60 million per year ... but the numbers are suspicious. For example, Villanova's NON-revenue sports (Women's basketball, field hockey, even football) ALL show an identical revenue and expense number - meaning someone is playing accounting games (legal, but masks a lot). Reliable reports show Villanova's Men's basketball program as generating $11 million or so of revenue - which makes the overall $60 million athletic department revenue number unrealistic.
So ... the math ... There is a reason the conferences who were NOT P4 have been howling about this Court-forced settlement agreement: because the P4 teams will end up with an even more built-in advantage. Every P4 team will likely be able to allocate and share the full $20.5 million. Most non-P4 teams will probably be limited to $5 million or less - and ion some cases much less. And remember (though the Big east, the AAC and maybe a couple of other high-mid-major conferences will allocate more), most non-P4 conferences operate so close to the margin with athletics revenues and expenses, for them to allocate even $1 million to $2 million to revenue sharing with athletes would be a HUG hit to their expenses and could force big cutbacks in non-basketball teams - something that they may not be able to do politically (with their alumni).
So ... to Richie's post on how much allocation some teams might make to men's basketball - separate from NIL. Let's run the math. Lets say RU will allocate $4 million to men's basketball. And let's say most Big East teams will do the same - most of their allocation going to hoops (since no football). And let's say most P4 school swill do the same (i.e. have $20.5 million available to share, 70%-75% to football). Further, let's say the NIUL stays the same (though donors may be less willing to put in $$ if they know the revenue sharing is coming into play). RU, by Richie's account, had no ore than $1 million in NIL available last season.
So, basketball $$ available to "pay" players - "last year" was NIL only, "this year" is the same NIL plus $4 million revenue sharing:
RU: LAST year = $1,000,000 ... THIS year = $5,000,000
Let's pick Michigan: Last year = $6,000,000 Just pure speculation ... This year = $10,000,000
And, let's say, St. Johns: Last year = $4,000,000 ... this year = $8,000,000
And Villanova: Lat year = $4,000,000 ... This year = $8,000,000
RU still has a disadvantage financially - BUIT ... RU has NARROWED the gap. LAST year, a team like Michigan )or Indiana) had a 6 to 1 edge over RU in available $$, while St. Johns and Villanova had a 4-1 edge. THIS year, the blue bloods like Michigan may have just a 2-1 advantage, while the non-P4 schools with substantial resources gap will shrink from 4-1 down to 1.6 - 1.
The MATH says RU (and Northwestern, Vanderbilt, Maryland - though MD has Under Armor money - et al will not close the gap but WILL narrow the $$ gap, and be more competitive.
This SHOULD help RU, even with "prices" going up for many desirable players. They should be able to selectively compete with a few key players, something RU could not do last year at all.
BUT ... I think people may be underestimating the positive significance of the revenue sharing for a team like RU in the scheme of the college sports (both football and basketball) landscape. Or maybe I am just hoping, eh?
If I understand how the revenue sharing works, I believe you are missing the mathematical benefits RU will get vs many other programs. If I am wrong with how the revenue sharing is supposed to work, someone will surely correct me - which would be welcome and appreciated. In the end, this is MATH ... and the math helps mid-level P4 schools like RU more than any other level programs - relative to the richer programs and the non-P4 conferences. How so?
My understanding on the revenue sharing is that it is not $20.5 million, rather it is UP TO $20.5 million ALLOWED to be shared with the athletes, from the school revenues ... and it is supposedly UP TO that $20.5 million, based on a PERCENTAGE of total athletic department revenues (22%?). So if a school has $93 million OR MORE of athletic department revenues, then they have UP TO $20.5 million they are allowed to allocate and share to individual athletes, directly from the school. If a school has $150 million (or $2000 million - like Ohio St, Michigan, some of the SEC schools, for example), they STILL are only allowed to allocate and share UP TO $20.5 million, a lower percentage ... the $20.5 million is a SALARY CAP, in essence. If a school has $50 million in athletic department revenues, their "cap" is not $20.5 million, but 22% - or $11 million ... but even so, if a school only has $50 million of athletic department revenues, it is going to be tough to allocate even that $11 million, given other athletic department expenses required. After all, the money doesn't just magically appear, it has to come from SOMEWHERE.
So, lets look at the P4 schools - those with major football programs. Those conferences (the Big 10, SEC, Big 12 and ACC) have media rights packages that dwarf all other conferences. The Big 10 schools are getting, what, $75 million per school just from media rights? Maybe $80 million per year - and the contract escalates. The SEC probably gets somewhere close to that, though a little less. I think the ACC media rights contract works out to less than $40 million per team - maybe $35 million per team. The Big 12 is somewhere in between. PLUS there is the College Playoff contract, which is separate, reports say the SEC and Big 10 get 60%, amounting to $20-$21 million PER SACHOOL, while the Big 12 and ACC get $12-$13 million per school. PLUS all these schools, in addition to their basketball tickets and concessions revenues, also get very large football tickets and concessions revenues - which the non P4 teams lack. Even at Rutgers, RU probably gets at least $1.6 million PER FOOTBALL GAME ticket revenues - maybe more - plus concessions and parking, which often are close to the same as the tickets, if not more ... so figure $3 million per game. Of course, there are expenses associated with this stuff (especially concessions, which may be a contract with a provider) - but that is separate from REVENUES. College sports accounting is strange, often, and different schools use different methods (no GAAP requirement) - which is why the so-called "subsidy" different schools show are not apples to apples - and RU's accounting is particularly weird, and in my opinion overstates the headline institutional "subsidy" we often see reported.
Anyway, I digress. The MAIN point is that every Big 10 and SEC school, and probably every ACC and Big 12 school, generates at least the minimum $93 million of athletic department revenue needed to allow each team to allocate the full $20.5 million capped revenue sharing to individual athletes.
The NON-P4 conferences get a LOT less revenue though, since they do NOT have material football ticket/concession revenues (their ONLY revenue producer is men's basketball, mostly)., and VASTLY lower media rights deals. So ... I have seen reported on THIS site state Big East teams, for example, will get about $7-$8 million per team per year ... but that seems high. The Big East signed a $500 million deal over 12 years - that is about $41 million per year. They have 11 teams - that works out to $3.7 million per team per year. But another source indicated the revenue is about $80 million per year, of about $7.3 million per team. Either way, the math is what it is - and let's use the higher number for the purposes of THIS exercise - be generous. The A-10 ... who knows ... maybe $1 million per team, if they are lucky? The AAC probably does better, because they have football. And for Big East teams - lets say ... strange. For example, Villanova (probably generates the most revenue of Big East teams - except for maybe UConn), I have seen athletic department revenue listed anywhere from $40 million to $60 million per year ... but the numbers are suspicious. For example, Villanova's NON-revenue sports (Women's basketball, field hockey, even football) ALL show an identical revenue and expense number - meaning someone is playing accounting games (legal, but masks a lot). Reliable reports show Villanova's Men's basketball program as generating $11 million or so of revenue - which makes the overall $60 million athletic department revenue number unrealistic.
So ... the math ... There is a reason the conferences who were NOT P4 have been howling about this Court-forced settlement agreement: because the P4 teams will end up with an even more built-in advantage. Every P4 team will likely be able to allocate and share the full $20.5 million. Most non-P4 teams will probably be limited to $5 million or less - and ion some cases much less. And remember (though the Big east, the AAC and maybe a couple of other high-mid-major conferences will allocate more), most non-P4 conferences operate so close to the margin with athletics revenues and expenses, for them to allocate even $1 million to $2 million to revenue sharing with athletes would be a HUG hit to their expenses and could force big cutbacks in non-basketball teams - something that they may not be able to do politically (with their alumni).
So ... to Richie's post on how much allocation some teams might make to men's basketball - separate from NIL. Let's run the math. Lets say RU will allocate $4 million to men's basketball. And let's say most Big East teams will do the same - most of their allocation going to hoops (since no football). And let's say most P4 school swill do the same (i.e. have $20.5 million available to share, 70%-75% to football). Further, let's say the NIUL stays the same (though donors may be less willing to put in $$ if they know the revenue sharing is coming into play). RU, by Richie's account, had no ore than $1 million in NIL available last season.
So, basketball $$ available to "pay" players - "last year" was NIL only, "this year" is the same NIL plus $4 million revenue sharing:
RU: LAST year = $1,000,000 ... THIS year = $5,000,000
Let's pick Michigan: Last year = $6,000,000 Just pure speculation ... This year = $10,000,000
And, let's say, St. Johns: Last year = $4,000,000 ... this year = $8,000,000
And Villanova: Lat year = $4,000,000 ... This year = $8,000,000
RU still has a disadvantage financially - BUIT ... RU has NARROWED the gap. LAST year, a team like Michigan )or Indiana) had a 6 to 1 edge over RU in available $$, while St. Johns and Villanova had a 4-1 edge. THIS year, the blue bloods like Michigan may have just a 2-1 advantage, while the non-P4 schools with substantial resources gap will shrink from 4-1 down to 1.6 - 1.
The MATH says RU (and Northwestern, Vanderbilt, Maryland - though MD has Under Armor money - et al will not close the gap but WILL narrow the $$ gap, and be more competitive.
This SHOULD help RU, even with "prices" going up for many desirable players. They should be able to selectively compete with a few key players, something RU could not do last year at all.
