Big East Commissioner Val Ackerman, Atlantic Coast Conference Commissioner Jim Phillips, and Big 12 Commissioner Brett Yormark.
Porter Binks | Matt Kelley | Stacy Revere | Getty Images
College sports leaders are crunching the numbers as they head toward payments for players and new avenues for revenue growth.
Speaking at CNBC Sport and Boardroom’s Game Plan conference on Tuesday, Big East Commissioner Val Ackerman, Atlantic Coast Conference Commissioner Jim Phillips and Big 12 Commissioner Brett Yormark addressed the NCAA’s $2.8 billion settlement that’s enabled paying players directly and the rollout of player revenue sharing.
“Revenues have never been greater,” Phillips said. “Expenses for our schools also continues to go up. Is it sustainable, is really the question.”
Phillips said every ACC school has opted for the revenue sharing model, initially capped at $20.5 million per school next year to allocate to pay players. However, that cap will continue to incrementally rise for the next decade.
“In the league office, we continue to try to find new revenue streams that are available to us that will help offset some of those expenses [of paying student-athletes],” Phillips said.
Ackerman echoed that uncertainty, highlighting the struggles over allocating dollars between the sports and between men’s and women’s programs.
“Football is driving the revenue story. Men’s basketball is second … So the question is, should half of that revenue be shared, no matter what, no matter who’s generating it,” Ackerman said. “I believe, frankly, it’s going to end up in the courts, unless Congress gets involved.”
For his part, Yormark dismissed the notion that college sports are in “financial crisis,” saying warnings were “overly provocative.” But he stressed that schools are doubling down because athletics has become central to their brands.
“Our presidents, our boards, our athletic departments, understand that athletics sits at the front porch of all these universities. They recognize that now it drives everything in the ecosystem,” Yormark said. “[The schools] understand that investing in athletics is the right thing to be doing.”
That investment may soon include private capital. Yormark said the Big 12 has studied outside partnerships, though he ruled out a direct equity sale. Phillips and Ackerman said their conferences are each fielding proposals from Wall Street.
“We’re not going to sell a stake in this conference,” Yormark said. “But do we partner with someone strategically that provides different types of resources, capital, strategic resources? That potentially could happen.”
Conferences are also rethinking how to carve up television money. The ACC has shifted to an incentive-based model that distributes media rights revenue partly by TV viewership and postseason performance.
“You can go hunt what you kill,” Phillips said. “If you’re 4-8 in football or 12-2 and make the playoff, you’re going to get a bigger slice.”
Yormark said the Big 12 may consider similar changes but not immediately, given the integration of eight new schools.
As for pooling television rights across conferences — a move some say could mirror the NFL — Yormark dismissed the idea.
“Scarcity drives demand. Demand creates value,” he said. “Hope isn’t a strategy… In theory, it works, but the devil is in the details.”
Despite the cost pressures, all three commissioners saw growth potential in new sports, particularly women’s volleyball, which is drawing record TV audiences and sellout crowds.
“I think volleyball is a safe bet,” Yormark said.