A new wave of unknowns comes with the still-evolving impact of the settlement in the NCAA’s case involving athlete compensation.
This week’s SEC spring meetings in Destin have brought far more questions than answers after news of the House vs. NCAA settlement broke just a week ago.
Adding a new athlete compensation expense of up to $22 million to athletic department budgets has been among the wide range of culture-shifting topics dominating the discussion at the annual league event.
As Alabama athletics director Greg Byrne describes it, the math is unconventional and not as straightforward as it seems.
SEC commissioner Greg Sankey has hinted at “hard decisions” that schools will face when recalibrating budgets to include the new expense for current and account for the lost revenue to pay the settlement to previous athletes.
Does that mean cutting high-expense, low-revenue sports from department rosters?
“Obviously, you don’t want to do that,” Byrne said. “You’ve seen Loyola Marymount, you’ve seen a couple of other schools since COVID who had reduced sports but obviously that would be the last thing we want to do.”
Casagrande: A striking new day for the SEC summed up in one moment
Byrne called the Olympic sports model “one of the cool things in our country.”
“But it’s also very, very costly,” Byrne added. “And that’s not just Alabama. That’s across the board in everything we do. And I’m proud of how we support our Olympic sports.”
After exiting meetings, Byrne was asked a second time by reporters if cutting teams would be the last option in making the budget work.
“I would hope we wouldn’t have to do that,” Byrne said.
Byrne was also asked about the fact SEC schools would be getting approximately $22 million a year in College Football Playoff revenue per year under the new contract starting this season.
“Yeah, but travel isn’t g going to go up, travel isn’t going to go up, insurance isn’t going to go up,” he said. “Last year, we spent $20 million in deferred maintenance. That’s to make sure steel is reinforced. Concrete is reinforced … deferred maintenance isn’t real sexy but you have to do it.
“One of the things that frustrated me from reading the things I read so far was when I read about certain figures out there comparing what we do to professional leagues. They never talk about how professional leagues have one team. We have 21. It never gets mentioned. I’m not trying to talk down to you but that’s just frustrating from my lens.”
In terms of finances, Alabama has two teams that made more money than it spent last year, according to the budget it submitted to the NCAA. The football team made $45.9 million more than it spent while men’s basketball had a profit of $7.8 million.
The other programs lost more than $27 million.
Bottom line: Alabama’s athletics revenue was $199.9 million compared to $212 million in expenses, according to its NCAA budget. More money will come with the CFP increase and the SEC’s new TV deal with ESPN, but the math is not that simple, Byrne said, because inflation’s ballooned costs simultaneously.
So the increased revenue won’t cover all of the athlete compensation cost, the AD said.
“It’s not the only solution,” Byrne said. “It’s not the silver bullet.”
Exactly how schools solve it will remain a topic for discussion as college sports move into this new era.
“We all have a responsibility, as much as people think there’s unlimited money, there’s not,” Byrne said. “We have to make financial decisions.”
Michael Casagrande is a reporter for the Alabama Media Group. Follow him on Twitter @ByCasagrande or on Facebook.
