With Profit Sharing on the Horizon, What Happens If a School Says No?

So P4 schools are required to pay both current athletes and former athletes back pay. How are the programs that are already losing money going to come up with an additional $20.5 million? It is expect to rise into the mid $30 million dollar range over the next decade. How are programs going to pay for it? Cut support staff? Slash non-revenue sports? Sell assets? Try to monetize every sponsorship they can? Use taxpayer dollars to pay football players? Raise ticket prices? Raise student fees? Some of all?

It fires the fanbase up to say “we will make the playoffs and generate an extra $20 million in revenue!!!” But the reality is not everyone can make the playoffs.

So then it will snowball. If you are already broke and in the cellar, why would you want to spend an additional $20+ million just to hit the status quo?

Schools will have to absorb this new additional expense. For most departments they are looking at around a 10% increase in expenses due to profit sharing. Only 10-12 of the 16 SEC athletic departments generate a profit each year. Revenues are at record levels, but so are expenses. Here is a graph of SEC athletic department profitability from 2018-2022.



If you look at the 2022 number, 8 out of 11 schools were profitable (Vandy is not listed, they are private and financials are not public). However, if each school had an additional $20.5 million dollar expense then only 1 program would have been profitable.

The money is going to have to come from somewhere. And big schools aren’t immune. The Texas athletic department reported a $23.3 million dollar loss for FY25. That was without paying $20.5 million in profit sharing.

It will be interesting to see how athletic departments handle it. I bet a lot of non-revenue programs are about to take it on the chin, or somewhere else.

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Maybe don't hire 16M coaches? 3M in a women's sport that doesn't even make enough to pay the coach. Shall I continue?

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So you are saying they should save money by hiring bargain bin coaches and deciding on which sports to sacrifice? I think many will adopt this strategy.

A&M already has. It is what Alberts was brought in to do. Clean the red off the ledgers and prepare for this future. He's been remarkably successful given Fisher, and that Maryland coach that has fallen off a cliff. Bucky was cheap, as was the volleyball coach, the women's basketball coach, etc ...

A&M sports looks fiscally responsible for probably the first time ever.