I still donât understand revenue sharing. How is it that schools who previously claimed to barely turn a profit from athletics, revenue sports pay for non-revs etc, are now expected to pay out $20M annually to athletes?
And these large donations coming in, which seem to be a pattern at other colleges as wellâŚare we sure these arenât funding for revenue sharing?
Oh I assume they are, or they are at least bridges until the proper channels can be set up.
Also I donât totally understand this, but I know the IRS was skeptical of the collectives as write offs, but I assume with revenue sharing that direct donations to the universities would be looked at more kindly in that regard?
I think some of the seeming lack of profitability is related to accounting practices, specially when it comes to expenses that the athletic department incurs that occur within the university. For example, the 2019 UVA Athletics financial report writes down $20 million in athletic student aid expenses, $8.4 million in direct overhead; $3.5 million in indirect overhead. Thereâs probably some wiggle room there in terms of how much those numbers reflect actual costs to the university (âtransfer-price accountingâ is the term you want to search/type into your local friendly AI model to read more).
Think about it this way: part of what goes into that figure of $20 million in aid is a calculation of how many scholarships were given multiplied by the price of each scholarship. But does the price they use reflect the actual cost to the university? Probably to a certain degree but also probably not 100% accurate of what would happen to your bottom line if you pulled a given scholarship from an athlete.
Caveats: I am not an accountant but have been exposed to just enough discussion of higher Ed finance and accounting practices to be dangerous to myself.
FWIW, this article is from an economist who is very critical of the NCAA (thus the provocative title), but gets at some of the financial reporting stuff:
Some post script notes:
Iâve also been assuming non-revs will be squeezed, though I suspect there will be PR and other pressures not to squeeze them. Or at least claim youâre not squeezing them.
(Controversial opinion: and that seems fine. I participated in many enjoyable and enriching activities at UVa where we got a few bucks from the standard CIO fee and had a couple volunteer professors who showed up once a year or so.
If folks want to play field hockey, awesome! Go play field hockey. Iâm not sure why they can only do it if they get flown around the country for free and have a professional staff dedicated to them)
Something like the big anonymous football donation (or the Ohanian donation to WBB)⌠does that go out to the team under the $20.5 million rev-share umbrella, or is that separate?
Wild guess: under the future state, my assumption is that ADs will get creative about funding themselves and I donât see why they couldnât just take direct donations. But that wonât effect the amount that they can pay out , which will still be capped (that is, assuming House is approved and not immediately challenged and overturned or whatever).
Technically, of course, theyâre paying out zero now, and only the collectives are paying out, but in the future state, the assumption (perhaps wrong) is that NIL will have to go past some pencil pushing auditor.
Iâm also wondering how this might hurt the ability of donors to earmark. Like if Ohanian wants to give us $5 mil per year for WBB, would UVA have to say âYeah, thanks, but the thing is, we only want to spend $1 million per year on WBB, otherwise it cuts into how much we can spend on footballâŚâ
Finally someone agrees to abolish the aqua center
Basically, yes, I think. I assume the school would just get creative about having the money flow into a different pot thatâs still related to WBB.
But Iâm way out over my skis here ⌠what else is new
Are McDonaldâs brown bags of cash under park benches going to make a come back?
As soon as you make rules, breaking them becomes the next competitive advantage
Iâm thinkinâ Arbyâs.
VCU is going to put a bare minimum for $5 million to their bball programs. At the same time schools without football will have a hard time getting $20 million in total
This whole discussion makes me want to go to the Tides Inn and then retireâŚ
Football team practicing.
Part of me hates the soullessness state of current college basketball. Part of me at least appreciates the growing parity and distribution of talent
Think with revenue sharing and salaries at schools being close to similar, itâs going to be even more important to have a coach who is strong with the xs and os and is good at evaluating fits for his schemes. And also to avoid TJ Power overpay situations
Change your icon, thanks
