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.

And where are all the people who complain there are never any real discussion topics here? Profit sharing is going to have a big impact on how athletic departments operate. I fear many uniforms may begin to resemble this.

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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.

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Texas only received $12M from the SEC for '24-25, and will receive the full ~$80M for this year. Texas is immune to whatever money issues befall the rest of you plebs.

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.

With logos their football fields will resemble the flag of the state of Maryland than grass.

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I assume you believe Texas donors have an open checkbook and money will never run short.

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In the SEC, the increase in the TV contract revenue (which we saw this year) is just about enough to cover the revenue sharing. So, if you were breaking even before 2024, you should be able to cover the revenue sharing without it being a back breaker. What I think is more likely with SEC schools is that you will see some of them not fully fund every roster spot in every sport. Even in football, some of the wealthier schools have decided that it doesn't make sense to go to 105 on the roster if you have to decrease your revenue sharing with key players as a result.

Where you are really going to see this bite is in the ACC and Big XII. Those schools are in a tough position. Funding revenue sharing for football would be job one for any school that hopes to stay competitive financially, but if they do the calculus and decide they just can't swing it, you will probably see some not fully fund revenue sharing. And you will definitely see these schools cutting corners in other areas. For example, I suspect no more than a handful (if any) of ACC schools will provide the full complement of 34 (?) baseball scholarship (up from 11.7 under the old rules).