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Purp 1 (Buff News)
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Date Posted: Friday, August 16, 12:32:13pm
Author Host/IP: syn-074-070-140-050.res.spectrum.com/74.70.140.50
Knowing that major changes to college sports are on the horizon, Canisius University athletic director Bill Maher already has a number in mind: $240,000.
According to one projection by the Metro Atlantic Athletic Conference, that is the potential annual shortfall Canisius’ athletic department could face over the next 10 years – fallout from an agreement last month among the NCAA and plaintiffs’ lawyers to enter a $2.8 billion settlement of a class-action antitrust lawsuit.
The House, Carter and Hubbard antitrust settlement – commonly referred to as the House settlement – is a revenue-sharing plan that details not only how colleges would directly pay current and former college athletes for the first time, but how colleges could take on even more costs in the form of more scholarship athletes per team.
And, of course, those schools will have to figure out how to pay for it all.
Potential budget shortfalls are just the beginning of a complex, multilayered series of events that promise to reshape the future of college sports.
Among the changes:
Direct payment from athletic departments to athletes, in addition to the third-party endorsement deals or NIL collective money they are already earning.
Back pay to former athletes who weren't allowed to work jobs or make endorsement money under previous NCAA rules.
A potentially drastic increase in the number of athletic scholarships allowed per sport.
The House settlement virtually guarantees that major changes are coming. That inevitability means that the Big 4 schools are confronting many uncertainties as ratification of the settlement approaches, as well as other factors that could affect finances.
Submitted in July in the U.S. District Court for the Northern District of California, the settlement must still be approved by U.S. District Judge Claudia Wilken. Even then, it faces legal challenges. But Division I athletic directors in Western New York are already preparing for impact.
Colleges and universities could spend more than $20 million per year to pay athletes in an agreement that would begin in 2025 and run through 2035.
Additionally, scholarships will be expanded to full rosters, and instead of scholarship restrictions, there will be roster-size limits. For example, FBS football teams will be allowed to give out 105 scholarships (up from 85), men's basketball 15 (up from 13) and baseball 34 (up from 11.7).
So, what does the future look like?
Will Title IX dictate that the new payments to athletes be distributed equally among men and women?
Will low-major schools decide to pay for the new maximum number of scholarships per team?
And how do they offset the costs for all this?
Barely anyone has a clear set of answers – including administrators, athletic directors and the athletes themselves.
“The long-form (settlement) has been filed, but we don’t know when it will be finalized by a judge, and we don’t know the secondary and tertiary impacts,” St. Bonaventure athletic director Bob Beretta said.
“There’s all these different possibilities and scenarios, but until we have a full picture of what the House settlement means, we can’t give hard and fast answers, but we have to prepare for all kinds of scenarios.”
Right now, administrators at Canisius, Niagara, St. Bonaventure and the University at Buffalo have more questions than answers regarding the ultimate outcome.
“Until we get clarity on how things are impacted, such as Title IX, legalities and when this will happen, we can’t answer those questions,” Maher said.
Canisius University athletic director Bill Maher introduces Jim Christian as its new men's basketball coach at the Koessler Athletic Center on Thursday, April 11, 2024.
One of the most obvious questions that faces college athletic administrators: What must they sacrifice to make up for a monetary loss?
At St. Bonaventure, Beretta said the athletic department will be forced to examine every method of how it does business.
“When you look at it holistically, in general, everything could be on the table,” Beretta said. “Everyone has different sports portfolios. Everyone travels differently. Not just in the Big 4, but I think everyone in Division I – particularly in the mid-to-low majors – we have to find a better way of doing business.
“I’ll tell you now, on our campus, we will do everything in our power to continue to improve the student-athlete experience.”
Where will the money come from to pay athletes, and to make up for the shortfall? The New York Times reported last month that schools could spend about $20 million per year to pay athletes in that 10-year window. ESPN reported schools will be able to spend a maximum of $23.1 million, based on a formula that gives athletes 22% of the money the average power-conference school makes from media rights deals, ticket sales and sponsorships.
None of the revenue from the College Football Playoff is being used to finance the settlement of the lawsuit, according to the Times. Instead, it will mainly come from the multibillion-dollar NCAA Men’s Basketball Tournament.
Sportico.com reported in March that distributions from the NCAA Men's Basketball Tournament would be roughly $226 million, which is distributed to conferences over six years.
The changes will certainly force athletic departments to stretch and alter budgets.
“It’s a legitimate question to ask,” Niagara athletic director Simon Gray said. “We face this already: Decisions based on priorities. Our priorities won’t change. (They center on) the development of student-athletes.
“But how do we make sure we are true to our decision, in deciding how we fit into this landscape?”
At Niagara, Gray said discussions surrounding NCAA distributions include understanding how the current revenue model will change and how the school can overcome that.
Could it drop some sports altogether? Or could it trim around the edges in other ways, such as asking athletic department employees to take pay cuts or furloughs?
“It’s a fair question,” Gray said. “At this point, I’d refer back to us focusing on our priorities and resourcing those priorities.”
At Canisius, Maher bristles at the idea of making major cuts, including potentially eliminating sports.
“At Canisius, and at many MAAC (Metro Atlantic Athletic Conference) and Division I institutions, the athletic programs are very important parts of the overall enrollment effort,” Maher said. “If we cut a program, we could lose those students. If we cut a program with 30 athletes, that’s lost revenue to the institution that we cannot afford.”
Preparing for new reality
Athletic revenues and expenses at Canisius, Niagara and St. Bonaventure for the 2022-23 fiscal year – the most recent data in the U.S. Department of Education’s Equity in Athletics Data Analysis website – ranged between $13 million and $18 million.
UB’s athletic revenues for 2022-23 totaled $39,856,875 and its expenses totaled $40,433,875, resulting in a deficit of $577,000, according to the annual standardized financial statement the school must file with the NCAA. The News obtained the filing through a Freedom of Information Law request. (Canisius, St. Bonaventure and Niagara are private universities and are exempt from FOIL.)
Of Western New York’s four Division I athletic directors, only Maher gave a firm dollar figure on what kind of shortfall the athletic program faces – $240,000.
UB athletic director Mark Alnutt stated one certainty.
“All membership schools are going to take a hit in their distribution from the NCAA,” Alnutt said. “In most cases, that’s carried out through our conferences. We have a general range of what that could look like, in preparing for a budget, and we’re prepared for that for 2025, that loss of revenue and how we make up for it: Anticipating revenues from other areas and having to cut expenses from other areas. That’s pressing for fiscal year ’25.”
The finalization date for the House settlement is unclear, but multiple outlets estimate it could be finalized in the winter. It could come as early as this winter, but it could be amended between now and then. And it could continue to face legal challenges.
Athletic directors who spoke to The News added that athletes, schools and conferences can opt into or opt out of the settlement. Gray said Niagara’s athletic department is planning for multiple scenarios, including opting in fully or opting into revenue-sharing for just one sport.
There’s also the matter of outside factors that raise questions, those that neither schools nor the NCAA can control. Reuters reported Aug. 12 that three parties have challenged the settlement in federal court: One group said the proposed settlement treats female athletes unfairly compared to male athletes. Two more groups said the settlement would unfairly allow the NCAA to escape other antitrust claims.
“All of this will be important to consider, but right now, we don’t have the final answers,” Beretta said.
In the meantime, Big 4 athletic departments are doing their best to plan out future budgets.
Gray said Niagara is planning for multiple scenarios, and for what path it decides to take – including whether Niagara or the conference will opt into the House settlement.
St. Bonaventure is considering where it can create new revenue streams and potentially eliminate costs.
Canisius is considering ways to drive revenue, whether it’s through a stronger emphasis on fundraising, playing more guarantee games with significant payouts, growing ticket and sponsorship revenue, or some combination of all those options.
UB is already looking ahead at its future athletic budgets and is crafting the 2026 fiscal year budget – but it, too, waits to see whether the Mid-American Conference decides to opt into the House settlement.
Alnutt said UB will have to look at how it can cover the new costs, perhaps through fundraising; perhaps through capping certain expenses; perhaps both.
Two things Alnutt said UB has not considered: furloughs or cutting sports, even if the minimum for Football Bowl Subdivision participation is reduced. FBS schools must have at least 16 varsity teams, including football, with at least six men's or co-ed teams, and at least eight women's teams. UB is at the 16-team threshold.
Yet as Alnutt concluded an interview with The News earlier this month, he was preparing for a trip to New York City to attend a UB event at Yankee Stadium, where he planned to meet with local donors – and he was sure the topic of the House settlement would be discussed.
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