is my sport impacted? A rebalancing of college athletic department budgets
The world of college sports has officially entered a new era, and its foundation is being shaken to its core. For decades, the NCAA's amateurism model was the bedrock of its multi-billion dollar enterprise. That all changed with a monumental court settlement that has allowed athletic departments to do what was once unthinkable: directly pay student-athletes. While this shift is a monumental win for player rights, it has created a financial earthquake, forcing every athletic department in the country to find a new way to balance the books. The most immediate and significant change to the budget? A new expense of up to $20.5 million per school, per year, to be paid directly to athletes.
This isn't a minor adjustment. It's a seismic event that is challenging college athletics departments around the country. The money has to come from somewhere, and athletic directors are in the difficult, often painful, process of figuring out exactly where. For many, the answer lies in a re-shuffling of resources that will profoundly impact teams that have historically generated little to no revenue.
The New Math of College Sports
For the wealthiest universities in the Power Four conferences, absorbing a new $20.5 million expense is a significant, but likely manageable, challenge. These programs have hundreds of millions in revenue from massive TV deals, ticket sales, and lucrative sponsorships. The money is there, but it still requires a financial plan.
For the rest of the NCAA, the equation is far more dire. Mid-major schools and lower-revenue programs are staring at a multi-million dollar annual expense that their current revenue streams simply cannot cover. Without the massive football and basketball TV contracts of the Power Four, these schools will have to make difficult choices, and the trickle-down effect is already being felt. The question for these athletic directors isn't "how do we add this," but "what do we cut to make this possible?"
This new reality is leading to difficult, and often painful, internal conversations about priorities. The era of athletic departments as expansive, all-encompassing entities may be coming to an end.
The Ripple Effect: Scholarships, Staffing, and the Olympic Sports Squeeze
To fund these new payments to athletes, athletic departments are turning over every stone. Unfortunately, many of those stones have been the bedrock of non-revenue, or Olympic, sports. The scholarships that have been a lifeline for sports like gymnastics, swimming, wrestling, and track and field are now being reevaluated as a potential source of funds.
It's a harsh reality, but an athletic department might find that cutting a scholarship for a women’s tennis player or a men’s golf team is a necessary step to meet the new financial mandate. The result is that some teams may see their number of scholarship athletes reduced, making it harder for them to attract top talent and compete.
Beyond scholarships, athletic departments are also looking at operational budgets for non-revenue sports. Travel budgets could be reduced, equipment upgrades may be put on hold, and even staff positions—from assistant coaches to support staff—could be on the chopping block. The idea of having separate full-time coaching staffs for every single sport on campus may become a luxury that only the wealthiest schools can afford. We’ve also seen specific events get cut from sports. Schools like Washington State have announced they are ending participation in certain track and field events to save on roster spots and budget.
The Questions To Ask In the Recruiting Process
How has recent NCAA settlements impacted the budget for our sport?
Has the school already made decisions as to how the $20.5 million will be allocated or distributed?
How many scholarships does our team have moving forward compared to the past?
For non revenue producing sports, have their been any operational cuts to fit within the new budget that will impact our training or schedule?
These are questions to ask schools that are actively recruiting you. While we don’t recommend leading with these questions, as you start to evaluate your top ten and top five schools, it’ll become very important you fully understand the financial situation of the schools you’re speaking with.
The Unforeseen Challenge of Title IX
Adding to the complexity is Title IX, the federal law that ensures equal opportunity for male and female athletes in educational institutions that receive federal funding. The new payments to athletes must also be Title IX compliant, meaning that if a men’s football team receives a certain amount in direct payments, a proportionate number of female athletes must also receive similar compensation.
This has made the budgeting problem even more intricate. A school cannot simply funnel all the money to the football team. They must find a way to fund payments for a proportionate number of female athletes, which further increases the total budget deficit. This is a crucial detail that is forcing departments to find revenue sources and make cuts from both men's and women's non-revenue sports. The conversation is not just about a men’s team vs. a women’s team, but rather a department-wide re-prioritization that puts revenue-generating sports at the very top.
A New Era with New Winners and Losers
The NCAA's multi-billion dollar settlement is a revolutionary step toward fair compensation for athletes. But as with any major financial change, it creates new winners and new losers. The winners are undoubtedly the high-profile football and basketball players who will now receive direct payments. The losers, however, may be the thousands of athletes in non-revenue sports who will see their scholarship opportunities shrink and their programs' resources diminish.
The great rebalancing of college sports budgets is still in its early stages, and the full extent of the changes is still being figured out. However, one thing is clear: the money that once flowed to scholarships and operational budgets for Olympic sports is being redirected. The future of college athletics will be defined by a starker divide between the haves and have-nots, and the new financial reality will force athletic departments to make tough, and at times heartbreaking, choices in the years to come.
