Last week, the news broke that revenue-sharing is here. It’s a big story and represents major change in college football, but I think there’s something that’s being ignored: $20.5 million is a lot of money, and raising it is not going to be easy for anybody.
I should start by saying most scouts I’ve known are not especially business-minded. They just expect that the money to do things will be there, so I’m not picking on anyone in the industry for whistling past the graveyard when it comes to money. Still, it doesn’t make it any less true that coming up with the dollars is going to mean great pressures, and they may eventually fall on people in the industry.
At any rate, I texted with several friends at the GM/DPP level at P4 schools. Their response to how their athletic departments would raise the money varied.
- One referred to a donor drive at his previous school. He didn’t mention what the results were, and I didn’t ask. I just don’t see an annual donor drive not succumbing to fatigue from the alumni.
- One pointed out that Michigan — the mighty Wolverines — have already announced a 10 percent staff cut due to a revenue decline associated with fewer football home games this season.
- One said he expects schools to raise money the old-fashioned way — ticket prices and student fees. OK, but I don’t think the old ways are going to be enough. Maybe I’m wrong. He also said he expects cuts to football departments: “Hard to have 50 recruiting, creative or even analysts positions when you have to pay the players.”
- Only two admitted concern about financial pressures. One said that some schools will get half the sum from athletic department revenues (others will get all of it from there). His will not. I suspect his school is not in the minority. The other one, though feeling far more secure about his own school’s prospects, admitted that “there’s very likely to be teams that don’t have that lying around.”
- One expressed optimism that schools would come up with the cash because they always have. I’d say that’s accurate, but I still am not confident the money will come without strings attached.
Not many of them thought private equity would be necessary, though I don’t share that opinion. Just this week, we started seeing stories about schools like Alabama, Purdue, Penn State and UCLA and how they are weighing capital infusions. That’s a really big deal. Private equity doesn’t care about tailgating, character development, a band’s performance at halftime, percentage of players who earned their degrees, or anything else. They care about making money. Even as cynical and money-focused as college football has become, that’s a new frontier.
I spoke to a friend who’s knowledgeable about this things, and he said he sees a plus to the new demands because (a) it might force schools to cut back on their excessive staffing and (b) might even curb coaches salaries (though he admitted that’s a long shot). OK, maybe, but I don’t know if a few cuts here and there will be enough to make a difference.
I don’t know if I got any real answers, but I did get confirmation that not all schools will come up with the money the same way, and obviously, this is not going to be a level playing field financially. Like everyone else, I guess I’ll be watching closely to see which schools do this successfully, and which ones figure things out that others can’t. But I have this gnawing suspicion that many will be hurt by these new changes. We’ll see.