Let’s talk revenue sharing and all the issues
A lot of discussion on the round table and before about revenue sharing, much of which I personally think is not well thought out. But, I wanted to pose this question. How does Michigan, or any school, determine football revenue? How do you differentiate a contract that for all practical purposes includes all of the sports? It is nearly impossible to break out football revenue in the current structure, so under revenue sharing do we negotiate new contracts for football only and basketball only? Does this destroy the Big Ten Network?
I also wonder what that revenue than looks like. Michigan’s AD took in $210 million in 2022. By comparison, the Green Bay Packers had net revenue of $600+ million. That is a big difference and I suspect the operating cost for college football will be higher, as they employ tutors and many other academic related personnel. Revenue sharing on the order discussed seems likely to bankrupt most programs, even if they dump all non revenue sports.
change is certainly coming.
September 1st, 2023 at 7:50 PM ^
A definition of “revenue” which includes a percentage 1) TV/cable deals, 2) advertising and/or sponsorship, and 3) bowl & championship bonuses… is low-hanging fruit. Doesn’t even have to touch total Athletic Department revenue.
Sooner or later there will be a College Football Players’ Union, and the NCAA can either define revenue-sharing on THEIR terms, or they can lose a lawsuit and we’ll be in the Wild West, a la NIL.
I expect the latter. My god do these people LOVE to learn lessons the hard way.
September 1st, 2023 at 8:03 PM ^
What do you mean they don’t touch total athletic department revenue. The three things you listed are almost literally the athletic departments total revenue. The only thing you didn’t include is ticket sales, which is probably the easiest thing to differentiate what is and is not related to football.
September 1st, 2023 at 8:43 PM ^
The things I listed are roughly 1/2 - 2/3 of the AD revenue if you limit it to the $$ just related to football, and very easy to determine/define to be apples-to-apples equitably across a conference.
You could also limit it to just ticket sales if you like.
I’m getting some defensiveness from your response which I don’t think is warranted. Have a great night!
September 1st, 2023 at 10:30 PM ^
Which sport generates all of that money? Is it football or is it wrestling? Revenue sharing means the players get some of the money while the AD gets some. The AD can use their share of the money as they see fit, with the understanding that they need to be compliant with Title IX.
With a smaller but still substantial piece of the pie - rather than the whole pie - the AD is going to have to make some tough choices, but the days of living large off the backs of the football players are about to come to an end.
September 1st, 2023 at 8:26 PM ^
Jadyn Davis is lighting it up on ESPN U and you want to talk about revenue sharing?
September 1st, 2023 at 8:42 PM ^
Revenue Sharing?
- just do something, it doesn’t have to be perfect out of the gate.
- quit making up bullshit reasons to avoid doing anything.
FIFY
September 1st, 2023 at 9:03 PM ^
What I don’t understand and am leery about is how football revenue sharing will affect non-revenue sports. My understanding is that football revenue pays for the non-revenue sports. But I’m definitely open to being told why I shouldn’t worry.
September 1st, 2023 at 9:06 PM ^
Exactly my thoughts.
September 1st, 2023 at 9:13 PM ^
It will affect them. And this will sound harsh, but so what? I am not being antagonistic, but how fair is it to not pay the individuals who generate the revenue to support ALL the other sports.
I love sports. The quality of some of the nonrevenue sports might diminish. An assistant athletic director or two might end up job hunting. There still will still be sports. And we will still root for Michigan.
September 1st, 2023 at 9:54 PM ^
Agreed. I don’t see any harm in most of them becoming club sports. That’s awesome if you want to pursue your dream of lacrosse, but student tuition $ or the likes of Blake corum shouldn’t have to pay your way
September 2nd, 2023 at 2:53 AM ^
It will all evolve over time. However, the non-revenue sports have many boosters of their own. Especially at schools like Michigan. What will likely change for the "negative" will be less money or a drastically reduced inflation rate for facility spending, scholarship counts, and especially coaching salaries. Many of these schools for example have volleyball coaches who can make more than very successful doctors (high six figures). That's crazy. Unless you're Nebraska and then your whole State is nuts. At the least, the inflation of those salaries will subside. At most, those salaries will deflate as universities decline to invest so much in sports that don't contribute to their bottom line and they begin to trim the fat. I can't see how in the future universities will justify paying a rowing coach six-figures unless a booster specifically agrees to donate to that salary.
September 1st, 2023 at 9:03 PM ^
Revenue sharing is the right thing. Let's be the Leaders.
September 1st, 2023 at 9:09 PM ^
I just don't know if it's the right thing. Isn't that what separates college sports from professional sports? I agree, the schools should definitely be reinvesting any profits into their athletic departments, but ... isn't that what they're already doing?
Who, exactly, other than the coaches, is buying Maseratis with the profits? Who's getting rich off college football?
If revenue sharing is fair, then I'm all for it. But I'd like to hear the arguments pro and con. It's easy to give away other people's money.
September 1st, 2023 at 9:29 PM ^
exactly, other than the coaches, is buying Maseratis with the profits? Who's getting rich off college football?
This is a joke, right? Other than the coaches who make $10M/yr? The facilities are professional level. Michigan just spent what, $40M? $60M? on new scoreboards? The facilities and coaching salaries are the Maseratis.
Cut caoching salaries in half: that's about $8M/yr. That alone gets 100 football player $80k/yr each. Spend $8M less on facilities per year and now it's $160k/yr.
September 1st, 2023 at 10:06 PM ^
Yes, pay the players. But cmon, Sean Payton makes 18 mil this year and LA rams new stadium cost $5.5 BILLION. Rams and Saints do not have to pay for Olympic swimming pools, gymnastics teams, and 30 other teams no one really cares about.
Plus coaches add value to program and to the players, those salaries are gonna change. Yes there’s some fat to trim off the bone for facilities, but I bet the players rather it spent on the Big House than the golf course.
September 1st, 2023 at 9:42 PM ^
Revenue sharing will be, like everything else in this sport, negotiated and defined via a bunch of lawyers and contracts. It'll be contentious for parts but in the end there will be representation for the players and for the schools/leagues and they'll figure it out. If nothing else they know how much money is brought in from gate receipts to games, bowl payouts, etc. These are all numbers that schools and athletes can use to determine a reasonable revenue share.
I feel like a lot of the concerns around how this will be figured out is the same concerns we heard around NIL, the transfer portal, etc. It's just concerns about change, not that it is difficult in practice to resolve.
September 1st, 2023 at 9:50 PM ^
Revenue sharing sounds good in theory --- but I can't see any chance in hell this even gets close logistically to being implemented.
- Revenue sharing has come to the NFL, NBA and NHL --- yes --- but only because it has been collectively bargained. There will be no collective bargaining dynamic here.
- As you said: all kinds of different definitions of revenue. Who decides that? Literally every school is going to want to define it differently.
- The Jacksonville Jaguars are not the same as the Dallas Cowboys - but the relative difference between those 2 is nowhere near as large as the difference between Michigan and Purdue. Not to mention the difference between Purdue and North Dakota State. And then the difference between NDSU and Nicholls State. All those schools are D-1!!! How the hell are they going to agree on anything? Michigan has all kinds of $$$, Nicholls State scratches a few $$$ out, primarily by whoring their athletes out for numerous football and basketball buy games.
- The lack of any sort of collegiate commissioner/over-seer who has any teeth. The pro sports have their Roger Goodells and Gary Bettmans - say what you will about them, but they have legitimate power. Who has over-arching power in college football besides the TV networks?
- 30+ different state legislatures will want to have a say here too, given most D-1/FBS universities are state-supported institutions. Witness Sacramento earlier this year. And of course, nothing ever gets simplified by adding a bunch of politicians!!!
Now, NIL has all of its own problems, of course. Honestly, I think this is all kind of intractable. It's a mess and will remain one.
September 1st, 2023 at 10:01 PM ^
Congress has over-arching power via the Commerce Clause of the Constitution. I don’t think they want to touch this with a ten-foot pole. Who has a lower favorability rating, Congress or the NCAA?
September 2nd, 2023 at 12:31 AM ^
The biggest problems with revenue-sharing that I see are
- Many, maybe most, universities do not have it in their charter to run professional sports teams, law firms, gas stations, grocery stores, etc. They are limited to endeavors that are designed to enhance or support the teaching and research missions. Revenue sharing and professionalization of the sport would likely mean spinning off the relevant teams to private enterprises, like is done for other startups.
- If the players are professionals, they cannot be required to attend classes or even enroll in the school. That would be restraint of trade, a significant tort.
- If the players are professionals/employees, they have to have contracts that specify the length of employment and conditions for severing the contract by either side. opportunities for education for what we now call student-athletes would be drastically reduced, because of the logjam of extended contracts for players already on the team, and because these high school grads would not want to spend their new money on an education when they don't have to.
- In short, there would be no point to having something like "the Michigan Wolverines" in revenue sports because they would just be a bunch of mercenaries whose only ties to the school would be (provided the school charter allows it) that the university pays them.
Having some big pool of TV money that is distributed equally to all players on all teams (revenue or otherwise, though perhaps weighted by sport) without the schools having any input at all would probably work, but that's never going to happen. College football will choke on money until the health risks kill it off.
So enjoy it while we still have it.
September 2nd, 2023 at 2:39 AM ^
Stanford and Cal in an ATLANTIC CONFERENCE is the height of this stupidity.
Right now the landscape is in chaos.
Luckily, if history teaches us anything, this will evolve into a healthier, more stable entity. Right now this is reminiscent of the sporting landscapes of - for example - baseball pre MLB where regional leagues and federations where constantly emerging, evolving, and disappearing until the sport organized under one banner.
This was the same for football pre-NFL as well. The sad sauce was the effectively organizing part took decades for both. Same with the NBA and same with European leagues and on and on.
Right now, the SEC is likely the biggest obstacle to national organization with the Big Ten (especially led by Michigan and Ohio) a close second. They are the temporary benefactors and have little to gain short-term by joining to create a national league (with regional divisions resembling old conferences restoring cultural importance).
The sport will continue to get uglier and uglier until a new institution is able to bring them all to the table and organize the many powerful stakeholders. Universities, athletic departments, fan bases, boosters, student-athletes, and networks.
It's going to be a long, rocky road. And not the good kind.
Right now we are maybe, hopefully, 20 years away from a stable, national brand. With two dominant leagues emerging we may resemble the MLB cerca 1900. Other challengers and more chaos emerged and faded over the ensuing two decades (not to mention the negro leagues - which was exceptional to this argument as it was based on race and not economic benefit).
Or, maybe, we are where professional football was cerca 1960. Two dominant leagues were emerging but there were also other challengers that came and went before the sport solidified in the mid to late 1980's.
It could be another 20-30 years before this all shakes out..
And yes, the cultural and historical institutions of student-athletes playing a sport organized by universities not traditionally motivated by simple business profit is another massive obstacle to the organization of this sporting landscape.
Business organizing for profit is so much simpler. At least the sport is thoroughly moving in that direction - chaotic as it is - and will eventually arrive at a healthier conclusion when I will already be dead.
September 3rd, 2023 at 7:18 AM ^
College Football can't figure out something easy like NIL.
There is no way in hell it will be able to figure out Revenue sharing.
Harbaugh is wrong on this one. This is not a professional league and there are too many roadblocks to the money - Title IX, paying players in sports that don't make money, etc.
Right now, the best plan seems to be what's happening with schools paying players a small salary through the collectives and letting the boosters fund it. That and letting the established star players make legitimate NIL deals. It doesn't need to get any bigger than that, regardless of what the TV contracts are for. NIL needs to be NIL and not enticement bonuses and the portal needs to be limited to so many transactions per team in a year. Maybe 10, not 90 - to cut down on all the poaching.