A coming boon for college athletes is keeping athletic department staffers up a night.
Beginning in 2025, direct payments to college athletes are expected to reach around $22 million annually at a school like Indiana, and increase by percentage points over the following years.
That’s as a result of a landmark legal settlement of three antitrust cases against the NCAA expected to be fully approved in court in the months ahead.
Where will that money come from?
“I spend probably half my time working on our budget projections, trying to make sure that we can carve that amount of money out of our budget,” IU AD Scott Dolson said during an appearance on football coach Curt Cignetti’s radio show.
“We have about a $135 million budget right now, and we’re going to need starting next year, to carve-out about $22 million out of that to help distribute to student athletes that we choose depending on their markets to help us compete.
“Basically you’re adding a new expense item into your program. Most departments you spend what you earn, and you don’t have an extra $22 million within that budget. So you have to find creative ways to make that happen. You have to drive revenue up, and try to consolidate expenses where you can.”
Like every other school in the Big Ten, IU is the beneficiary of a massive new media rights deal that can help soften the blow. But as Dolson indicated, schools don’t miss an opportunity to spend what they earn, so much of that windfall likely has already been matched with a new expense line item. And that’s left many schools considering the option of cutting some sports that aren’t profitable.
That was an option on the table around the country during the budget crunches of 2020 and 2021, and IU instead chose to make across the board budget cuts rather than eliminate sports.
“We certainly hope that’s not the case,” Dolson said of the potential of cutting programs. “You can see that could potentially happening around the country.”
Of course, another option would be to generate more revenue. That’s easier said than done, of course.
Football is the cash cow at most schools, with significant tickets sales and massive television contracts.
That includes IU, where football revenue is more than double men’s basketball. But football revenue at Indiana is roughly half of what is produced by the big brand programs within the Big Ten.
Dolson recognizes he needs the football program to deliver more to his department’s bottom line, and hopes he has the right head coach to optimize the cash flow.
“Football is important. Football drives so much revenue,” Dolson said.
“That’s why Coach Cignetti is here. We need to be relevant in football. We need to make sure we get that momentum because it drives the engine for the whole department. Certainly men’s basketball speaks for itself as well, particularly here at Indiana, but football is really, really critical.”
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