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From A Cuse Fan (Split of athletic models)
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RE: From A Cuse Fan (Split of athletic models)
(05-11-2022 12:51 PM)Frank the Tank Wrote:  
(05-11-2022 12:40 PM)Attackcoog Wrote:  
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  
(05-11-2022 11:24 AM)Frank the Tank Wrote:  I doubt it.

All of these schools seem to want their cake and eat it, too.

It's easy for all of these schools to bemoan that NIL, the transfer portal and other changes in college sports are negatively impacting their respective academic missions.

However, what's not easy for all of these schools is no longer seeing their football and/or basketball games in prime slots on major TV networks while making tens of millions of dollars per year from their respective conferences. That's what would happen if they become a lower tier version of college sports compared to the "SEC pro model" that you've mentioned here.

If these schools are truly and legitimately fine with the latter (the direct loss of money and exposure by downgrading sports), then more power to them. I don't buy that will happen at all, though - not Stanford, not ND, not Duke, not anyone that's currently in a P5 league. Call me crazy, but unilaterally downgrading money and prestige (which is conferred with P5 membership) isn't something that really wealthy and prestigious schools actively choose to do in anything that they participate in, which would include sports.

Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

Ideally, NIL doesnt affect school revenue. However, in practice, college AD's are now discovering thats not how its working. The reality? The pool of revenue potentially available to college sports hasn't actually changed. The same total pool of advertising, corporate sponsorship, and alum donation dollars that existed before NIL exists after NIL. The real difference is to whom it will be paid. The that pool of money used for direct payments to players, means less will be available to flow directly to the schools.

To the extent that it's occurring, it's simply reflecting that the market was previously distorted where you could provide *zero* to the athletes themselves.

Up until now, the way to attract top players was to essentially have capital investments from the university, such as new training facilities.

Now, the way to attract top players is to actually pay more to those top players.

The latter is a WAAAAAAAAY more efficient way of attracting top talent, particularly in the zero sum world of sports where wins and losses count for so much.

It's like I've said elsewhere: would you rather have your employer spend more money on (a) shiny new offices and top executive salaries or (b) your own salary/bonuses? I know that I'd pick (b) every single time, yet all college athletic departments have been doing is spending money on (a).

It will be interesting to see how many schools continue to gold plate their locker rooms and training facilities. That had gotten ridiculously excessive.
05-11-2022 01:09 PM
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Scoochpooch1 Offline
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Post: #22
RE: From A Cuse Fan (Split of athletic models)
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  
(05-11-2022 11:24 AM)Frank the Tank Wrote:  
(05-11-2022 11:10 AM)TexanMark Wrote:  
(05-11-2022 11:08 AM)PeteTheChop Wrote:  Hate to burst the your contact's bubble, but this idea with these schools ain't ever making it outside the ivory tower

Pete I tend to agree with you...however, just the threat might be enough to bring some sanity to the NIL and portal chaos.

I doubt it.

All of these schools seem to want their cake and eat it, too.

It's easy for all of these schools to bemoan that NIL, the transfer portal and other changes in college sports are negatively impacting their respective academic missions.

However, what's not easy for all of these schools is no longer seeing their football and/or basketball games in prime slots on major TV networks while making tens of millions of dollars per year from their respective conferences. That's what would happen if they become a lower tier version of college sports compared to the "SEC pro model" that you've mentioned here.

If these schools are truly and legitimately fine with the latter (the direct loss of money and exposure by downgrading sports), then more power to them. I don't buy that will happen at all, though - not Stanford, not ND, not Duke, not anyone that's currently in a P5 league. Call me crazy, but unilaterally downgrading money and prestige (which is conferred with P5 membership) isn't something that really wealthy and prestigious schools actively choose to do in anything that they participate in, which would include sports.

Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

I should have been more clear. They don't pay now but will either have to pay in the future under a union model or the third parties that pay (probably donors) will stop donating to the school. It's not like the donors will suddenly do both. Plus avg player will now make more money in college than in the pros.
05-11-2022 01:31 PM
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Scoochpooch1 Offline
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Post: #23
RE: From A Cuse Fan (Split of athletic models)
(05-11-2022 12:49 PM)Big 12 fan too Wrote:  
(05-11-2022 12:40 PM)Attackcoog Wrote:  
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  
(05-11-2022 11:24 AM)Frank the Tank Wrote:  I doubt it.

All of these schools seem to want their cake and eat it, too.

It's easy for all of these schools to bemoan that NIL, the transfer portal and other changes in college sports are negatively impacting their respective academic missions.

However, what's not easy for all of these schools is no longer seeing their football and/or basketball games in prime slots on major TV networks while making tens of millions of dollars per year from their respective conferences. That's what would happen if they become a lower tier version of college sports compared to the "SEC pro model" that you've mentioned here.

If these schools are truly and legitimately fine with the latter (the direct loss of money and exposure by downgrading sports), then more power to them. I don't buy that will happen at all, though - not Stanford, not ND, not Duke, not anyone that's currently in a P5 league. Call me crazy, but unilaterally downgrading money and prestige (which is conferred with P5 membership) isn't something that really wealthy and prestigious schools actively choose to do in anything that they participate in, which would include sports.

Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

Ideally, NIL doesnt affect school revenue. However, in practice, college AD's are now discovering thats not how its working. The reality? The pool of revenue potentially available to college sports hasn't actually changed. The same total pool of advertising, corporate sponsorship, and alum donation dollars that existed before NIL exists after NIL. The real difference is to whom it will be paid. The that pool of money used for direct payments to players, means less will be available to flow directly to the schools.

Show me a school that currently spends $440 million?
You can’t get to your example without growth, and that growth isn’t coming from the school. If anything, that school is earning more in revenue without being on the hook for the cost required to get it.

There’s likely some transition pain with fixed costs right now, but a steady state would quickly be reached. The school will spend to its means, just like now, and the arms race offload to NIL and donors.

This is mostly about power. ADs and presidents like to have a say on how their boosters spend money. With them getting a cut along the way. The ADs with any semblance of thought would love their boosters spending that much on the input most likely to generate revenue growth. Not paying for seed and land if you’re a farmer is a heck of a business model, even if initially you have a little less to pay off your current obligations.

The only valid concern is product deterioration with fans not liking the sudden change annual free agency

No one pays $440m, it was hypothetical given the out of control NIL. Schools will eventually receive less donations or be on the hook for NIL. Agreed right now is gravy.
(This post was last modified: 05-11-2022 01:33 PM by Scoochpooch1.)
05-11-2022 01:33 PM
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Scoochpooch1 Offline
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Post: #24
RE: From A Cuse Fan (Split of athletic models)
(05-11-2022 12:40 PM)Attackcoog Wrote:  
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  
(05-11-2022 11:24 AM)Frank the Tank Wrote:  
(05-11-2022 11:10 AM)TexanMark Wrote:  Pete I tend to agree with you...however, just the threat might be enough to bring some sanity to the NIL and portal chaos.

I doubt it.

All of these schools seem to want their cake and eat it, too.

It's easy for all of these schools to bemoan that NIL, the transfer portal and other changes in college sports are negatively impacting their respective academic missions.

However, what's not easy for all of these schools is no longer seeing their football and/or basketball games in prime slots on major TV networks while making tens of millions of dollars per year from their respective conferences. That's what would happen if they become a lower tier version of college sports compared to the "SEC pro model" that you've mentioned here.

If these schools are truly and legitimately fine with the latter (the direct loss of money and exposure by downgrading sports), then more power to them. I don't buy that will happen at all, though - not Stanford, not ND, not Duke, not anyone that's currently in a P5 league. Call me crazy, but unilaterally downgrading money and prestige (which is conferred with P5 membership) isn't something that really wealthy and prestigious schools actively choose to do in anything that they participate in, which would include sports.

Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

Ideally, NIL doesnt affect school revenue. However, in practice, college AD's are now discovering thats not how its working. The reality? The pool of revenue potentially available to college sports hasn't actually changed. The same total pool of advertising, corporate sponsorship, and alum donation dollars that existed before NIL exists after NIL. The real difference is to whom it will be paid. The that pool of money used for direct payments to players, means less will be available to flow directly to the schools.

Exactly. Revenue remains same as costs spiral out of control.
05-11-2022 01:36 PM
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Big 12 fan too Offline
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Post: #25
RE: From A Cuse Fan (Split of athletic models)
(05-11-2022 01:31 PM)Scoochpooch1 Wrote:  
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  
(05-11-2022 11:24 AM)Frank the Tank Wrote:  
(05-11-2022 11:10 AM)TexanMark Wrote:  Pete I tend to agree with you...however, just the threat might be enough to bring some sanity to the NIL and portal chaos.

I doubt it.

All of these schools seem to want their cake and eat it, too.

It's easy for all of these schools to bemoan that NIL, the transfer portal and other changes in college sports are negatively impacting their respective academic missions.

However, what's not easy for all of these schools is no longer seeing their football and/or basketball games in prime slots on major TV networks while making tens of millions of dollars per year from their respective conferences. That's what would happen if they become a lower tier version of college sports compared to the "SEC pro model" that you've mentioned here.

If these schools are truly and legitimately fine with the latter (the direct loss of money and exposure by downgrading sports), then more power to them. I don't buy that will happen at all, though - not Stanford, not ND, not Duke, not anyone that's currently in a P5 league. Call me crazy, but unilaterally downgrading money and prestige (which is conferred with P5 membership) isn't something that really wealthy and prestigious schools actively choose to do in anything that they participate in, which would include sports.

Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

I should have been more clear. They don't pay now but will either have to pay in the future under a union model or the third parties that pay (probably donors) will stop donating to the school. It's not like the donors will suddenly do both. Plus avg player will now make more money in college than in the pros.
If the school is doing it, then why are you thinking a school will spend $400 million past revenue?

More importantly, how are they doing that? Who is lending them the cash to do that?

And if schools are doing it, it’s employment, and this is what CBAs are for.

Your example isn’t possible and won’t happen, but there would be upward pressure to spend on players. Some schools may go in the red a little, they already do. But a CBA would be implemented to keep player salaries well below revenue so that other costs can be paid. That CBA could include some NIL inducement language and would actually have a chance of being enforced
(This post was last modified: 05-11-2022 01:42 PM by Big 12 fan too.)
05-11-2022 01:40 PM
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curtis0620 Online
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Post: #26
RE: From A Cuse Fan (Split of athletic models)
2022, the beginning of the end of College Football.
05-11-2022 01:44 PM
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Big 12 fan too Offline
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Post: #27
RE: From A Cuse Fan (Split of athletic models)
(05-11-2022 01:33 PM)Scoochpooch1 Wrote:  
(05-11-2022 12:49 PM)Big 12 fan too Wrote:  
(05-11-2022 12:40 PM)Attackcoog Wrote:  
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

Ideally, NIL doesnt affect school revenue. However, in practice, college AD's are now discovering thats not how its working. The reality? The pool of revenue potentially available to college sports hasn't actually changed. The same total pool of advertising, corporate sponsorship, and alum donation dollars that existed before NIL exists after NIL. The real difference is to whom it will be paid. The that pool of money used for direct payments to players, means less will be available to flow directly to the schools.

Show me a school that currently spends $440 million?
You can’t get to your example without growth, and that growth isn’t coming from the school. If anything, that school is earning more in revenue without being on the hook for the cost required to get it.

There’s likely some transition pain with fixed costs right now, but a steady state would quickly be reached. The school will spend to its means, just like now, and the arms race offload to NIL and donors.

This is mostly about power. ADs and presidents like to have a say on how their boosters spend money. With them getting a cut along the way. The ADs with any semblance of thought would love their boosters spending that much on the input most likely to generate revenue growth. Not paying for seed and land if you’re a farmer is a heck of a business model, even if initially you have a little less to pay off your current obligations.

The only valid concern is product deterioration with fans not liking the sudden change annual free agency

No one pays $440m, it was hypothetical given the out of control NIL. Schools will eventually receive less donations or be on the hook for NIL. Agreed right now is gravy.

Oh, I thought you posted this:

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.




Your example is so bad, it’s hard to see what logic you’re using.

This is a transition period, but after that it’s actually beneficial in terms of balancing the AD budget for any school that plays the “game “

The only thing that should worry ADs is whether they can’t play NIL and get demoted, thus losing conference revenue and fans
05-11-2022 01:48 PM
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mpurdy22 Offline
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Post: #28
RE: From A Cuse Fan (Split of athletic models)
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  
(05-11-2022 11:24 AM)Frank the Tank Wrote:  
(05-11-2022 11:10 AM)TexanMark Wrote:  
(05-11-2022 11:08 AM)PeteTheChop Wrote:  Hate to burst the your contact's bubble, but this idea with these schools ain't ever making it outside the ivory tower

Pete I tend to agree with you...however, just the threat might be enough to bring some sanity to the NIL and portal chaos.

I doubt it.

All of these schools seem to want their cake and eat it, too.

It's easy for all of these schools to bemoan that NIL, the transfer portal and other changes in college sports are negatively impacting their respective academic missions.

However, what's not easy for all of these schools is no longer seeing their football and/or basketball games in prime slots on major TV networks while making tens of millions of dollars per year from their respective conferences. That's what would happen if they become a lower tier version of college sports compared to the "SEC pro model" that you've mentioned here.

If these schools are truly and legitimately fine with the latter (the direct loss of money and exposure by downgrading sports), then more power to them. I don't buy that will happen at all, though - not Stanford, not ND, not Duke, not anyone that's currently in a P5 league. Call me crazy, but unilaterally downgrading money and prestige (which is conferred with P5 membership) isn't something that really wealthy and prestigious schools actively choose to do in anything that they participate in, which would include sports.

Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.
True, but not quite. Some schools are nervous that instead of getting money from the booster(s) for their athletic department, it will go directly to the student athlete instead and the institution loses funding in that manner.
05-11-2022 03:42 PM
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TexanMark Offline
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Post: #29
RE: From A Cuse Fan (Split of athletic models)
(05-11-2022 01:06 PM)bullet Wrote:  
(05-11-2022 12:40 PM)Attackcoog Wrote:  
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  
(05-11-2022 11:24 AM)Frank the Tank Wrote:  I doubt it.

All of these schools seem to want their cake and eat it, too.

It's easy for all of these schools to bemoan that NIL, the transfer portal and other changes in college sports are negatively impacting their respective academic missions.

However, what's not easy for all of these schools is no longer seeing their football and/or basketball games in prime slots on major TV networks while making tens of millions of dollars per year from their respective conferences. That's what would happen if they become a lower tier version of college sports compared to the "SEC pro model" that you've mentioned here.

If these schools are truly and legitimately fine with the latter (the direct loss of money and exposure by downgrading sports), then more power to them. I don't buy that will happen at all, though - not Stanford, not ND, not Duke, not anyone that's currently in a P5 league. Call me crazy, but unilaterally downgrading money and prestige (which is conferred with P5 membership) isn't something that really wealthy and prestigious schools actively choose to do in anything that they participate in, which would include sports.

Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

Ideally, NIL doesnt affect school revenue. However, in practice, college AD's are now discovering thats not how its working. The reality? The pool of revenue potentially available to college sports hasn't actually changed. The same total pool of advertising, corporate sponsorship, and alum donation dollars that existed before NIL exists after NIL. The real difference is to whom it will be paid. The that pool of money used for direct payments to players, means less will be available to flow directly to the schools.

I don't totally agree. At some point NIL money will be replacing direct donations to the schools. But I see a lot of new money out there right now.

Zero Sum game.

Seriously it is a huge risk for a business to invest in an 18 year old. For every Tebow, Melo and Brady there are 200 4 and 5 star kids who might make pro but have very limited marketability.

Much safer for a business to donate to a school.
05-11-2022 03:58 PM
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Post: #30
RE: From A Cuse Fan (Split of athletic models)
(05-11-2022 12:51 PM)Frank the Tank Wrote:  
(05-11-2022 12:40 PM)Attackcoog Wrote:  
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  
(05-11-2022 11:24 AM)Frank the Tank Wrote:  I doubt it.

All of these schools seem to want their cake and eat it, too.

It's easy for all of these schools to bemoan that NIL, the transfer portal and other changes in college sports are negatively impacting their respective academic missions.

However, what's not easy for all of these schools is no longer seeing their football and/or basketball games in prime slots on major TV networks while making tens of millions of dollars per year from their respective conferences. That's what would happen if they become a lower tier version of college sports compared to the "SEC pro model" that you've mentioned here.

If these schools are truly and legitimately fine with the latter (the direct loss of money and exposure by downgrading sports), then more power to them. I don't buy that will happen at all, though - not Stanford, not ND, not Duke, not anyone that's currently in a P5 league. Call me crazy, but unilaterally downgrading money and prestige (which is conferred with P5 membership) isn't something that really wealthy and prestigious schools actively choose to do in anything that they participate in, which would include sports.

Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

Ideally, NIL doesnt affect school revenue. However, in practice, college AD's are now discovering thats not how its working. The reality? The pool of revenue potentially available to college sports hasn't actually changed. The same total pool of advertising, corporate sponsorship, and alum donation dollars that existed before NIL exists after NIL. The real difference is to whom it will be paid. The that pool of money used for direct payments to players, means less will be available to flow directly to the schools.

To the extent that it's occurring, it's simply reflecting that the market was previously distorted where you could provide *zero* to the athletes themselves.

Up until now, the way to attract top players was to essentially have capital investments from the university, such as new training facilities.

Now, the way to attract top players is to actually pay more to those top players.

The latter is a WAAAAAAAAY more efficient way of attracting top talent, particularly in the zero sum world of sports where wins and losses count for so much.

It's like I've said elsewhere: would you rather have your employer spend more money on (a) shiny new offices and top executive salaries or (b) your own salary/bonuses? I know that I'd pick (b) every single time, yet all college athletic departments have been doing is spending money on (a).

I dont disagree with that. All Im saying is the revenue is basically the same pool and the schools have a spending model that is built on multi-year commitments on facilities and coaching salaries. That current college economic model really cannot change overnight as there are long term commitments built into the cuurent model. Heck---a straight up pay-for-play model is absolutely economically possible---but it would require period of time to transition from the current amateur model to a professional model. If you try to just flip a switch, your looking at a potential economic disaster because much of the revenue that a pro-model would need to function is already committed well into the future in the form of debt and long term coaching contracts.

Over time, as long term facility debt is retired and current coaching contracts terminate---that frees up funds and the reallocation of revenue can accrue to the players---and away from fancy buildings and ridiculous coaching salaries. The issue of coaching contracts that are over-priced for the new era would clear up fairly quickly---but the debt issued for facilities is a longer term problem for any transition to pay-for-play. The one relatively painless way to pave the way to a pay-for-play transition would be to allocate much of any INCREASE in future media deals to the players.
(This post was last modified: 05-12-2022 01:27 PM by Attackcoog.)
05-12-2022 01:22 PM
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Big 12 fan too Offline
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Post: #31
RE: From A Cuse Fan (Split of athletic models)
(05-11-2022 03:58 PM)TexanMark Wrote:  
(05-11-2022 01:06 PM)bullet Wrote:  
(05-11-2022 12:40 PM)Attackcoog Wrote:  
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

Ideally, NIL doesnt affect school revenue. However, in practice, college AD's are now discovering thats not how its working. The reality? The pool of revenue potentially available to college sports hasn't actually changed. The same total pool of advertising, corporate sponsorship, and alum donation dollars that existed before NIL exists after NIL. The real difference is to whom it will be paid. The that pool of money used for direct payments to players, means less will be available to flow directly to the schools.

I don't totally agree. At some point NIL money will be replacing direct donations to the schools. But I see a lot of new money out there right now.

Zero Sum game.

Seriously it is a huge risk for a business to invest in an 18 year old. For every Tebow, Melo and Brady there are 200 4 and 5 star kids who might make pro but have very limited marketability.

Much safer for a business to donate to a school.

Is the NBA aware that they should be drafting buildings rather than 19 year olds?

It's an operating expense. The most impactful to winning, ratings, and thus revenue
05-12-2022 01:26 PM
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XLance Online
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Post: #32
RE: From A Cuse Fan (Split of athletic models)
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  
(05-11-2022 11:24 AM)Frank the Tank Wrote:  
(05-11-2022 11:10 AM)TexanMark Wrote:  
(05-11-2022 11:08 AM)PeteTheChop Wrote:  Hate to burst the your contact's bubble, but this idea with these schools ain't ever making it outside the ivory tower

Pete I tend to agree with you...however, just the threat might be enough to bring some sanity to the NIL and portal chaos.

I doubt it.

All of these schools seem to want their cake and eat it, too.

It's easy for all of these schools to bemoan that NIL, the transfer portal and other changes in college sports are negatively impacting their respective academic missions.

However, what's not easy for all of these schools is no longer seeing their football and/or basketball games in prime slots on major TV networks while making tens of millions of dollars per year from their respective conferences. That's what would happen if they become a lower tier version of college sports compared to the "SEC pro model" that you've mentioned here.

If these schools are truly and legitimately fine with the latter (the direct loss of money and exposure by downgrading sports), then more power to them. I don't buy that will happen at all, though - not Stanford, not ND, not Duke, not anyone that's currently in a P5 league. Call me crazy, but unilaterally downgrading money and prestige (which is conferred with P5 membership) isn't something that really wealthy and prestigious schools actively choose to do in anything that they participate in, which would include sports.

Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

Frank, you might have said "the insurance company will pay for it".

Third party monies are funds that would have gotten to the school instead of some individuals pocket.
NIL isn't going to kill the goose, but it will rob the nest of lots of golden eggs.
05-12-2022 01:57 PM
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Big 12 fan too Offline
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Post: #33
RE: From A Cuse Fan (Split of athletic models)
(05-12-2022 01:57 PM)XLance Wrote:  
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  
(05-11-2022 11:24 AM)Frank the Tank Wrote:  
(05-11-2022 11:10 AM)TexanMark Wrote:  Pete I tend to agree with you...however, just the threat might be enough to bring some sanity to the NIL and portal chaos.

I doubt it.

All of these schools seem to want their cake and eat it, too.

It's easy for all of these schools to bemoan that NIL, the transfer portal and other changes in college sports are negatively impacting their respective academic missions.

However, what's not easy for all of these schools is no longer seeing their football and/or basketball games in prime slots on major TV networks while making tens of millions of dollars per year from their respective conferences. That's what would happen if they become a lower tier version of college sports compared to the "SEC pro model" that you've mentioned here.

If these schools are truly and legitimately fine with the latter (the direct loss of money and exposure by downgrading sports), then more power to them. I don't buy that will happen at all, though - not Stanford, not ND, not Duke, not anyone that's currently in a P5 league. Call me crazy, but unilaterally downgrading money and prestige (which is conferred with P5 membership) isn't something that really wealthy and prestigious schools actively choose to do in anything that they participate in, which would include sports.

Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

Frank, you might have said "the insurance company will pay for it".

Third party monies are funds that would have gotten to the school instead of some individuals pocket.
NIL isn't going to kill the goose, but it will rob the nest of lots of golden eggs.

Which is still a win for AD budgets.
They get donors to spend more on the most revenue generating input, but keep the revenue.
The fixed costs and inflated salaries will come down now that the arms race is on donors buying players.

The real question is once the ADs can spend on players directly, how quickly to they get a CBA in place? Otherwise ADs will be incentivized to compete with each other on players. Still, a lot less need for gold locker rooms then, but a CBA is beneficial to schools and players
(This post was last modified: 05-12-2022 02:18 PM by Big 12 fan too.)
05-12-2022 02:15 PM
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Post: #34
RE: From A Cuse Fan (Split of athletic models)
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  
(05-11-2022 11:24 AM)Frank the Tank Wrote:  
(05-11-2022 11:10 AM)TexanMark Wrote:  
(05-11-2022 11:08 AM)PeteTheChop Wrote:  Hate to burst the your contact's bubble, but this idea with these schools ain't ever making it outside the ivory tower

Pete I tend to agree with you...however, just the threat might be enough to bring some sanity to the NIL and portal chaos.

I doubt it.

All of these schools seem to want their cake and eat it, too.

It's easy for all of these schools to bemoan that NIL, the transfer portal and other changes in college sports are negatively impacting their respective academic missions.

However, what's not easy for all of these schools is no longer seeing their football and/or basketball games in prime slots on major TV networks while making tens of millions of dollars per year from their respective conferences. That's what would happen if they become a lower tier version of college sports compared to the "SEC pro model" that you've mentioned here.

If these schools are truly and legitimately fine with the latter (the direct loss of money and exposure by downgrading sports), then more power to them. I don't buy that will happen at all, though - not Stanford, not ND, not Duke, not anyone that's currently in a P5 league. Call me crazy, but unilaterally downgrading money and prestige (which is conferred with P5 membership) isn't something that really wealthy and prestigious schools actively choose to do in anything that they participate in, which would include sports.

Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

What should concern schools is those third parties negotiating contracts for a player to play that is based on athletic skill rather than the value of name, image, and likeness.

There are going to be kids riding the pine around the country that 99% of the fans of the team couldn’t pick out of a line up who are going to be making more in NIL money than 75% of players in the NBA.

When a guy making six figures NIL at Miami transfers to Florida State and keeps the contract, I buy these as legitimate transactions.

I’d much rather have a true professional pay-to-play model where there is at least the appearance of control via the coach, AD, and President.
05-12-2022 02:33 PM
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Post: #35
RE: From A Cuse Fan (Split of athletic models)
I am not convinced that Joe Booster putting $100,000 in the Enormous State University athletic department and now throwing $50,000 into the NIL collective is going to maintain this new $150,000 expenditure. I suspect the total outlay will begin to drift downward back closer to $100,000

What I am convinced of is that right now NIL is like a post-Prohibition beer bust. Per capita consumption isn’t going to maintain first day numbers.

If you are a Bama fan and putting $50,000 toward a locker in the locker room or being a small part of paying Saban’s salary makes you feel good. Putting up a four year $50,000 per year commitment on a kid who would/should transfer to Middle Tennessee State except he wants the money promised him isn’t going to feel so rewarding.

Publicly traded companies that aren’t Nike and Adidas betting on future first rounder all-stars are going to be questioned about their use of advertising and promotion money on players who have a near zero NIL value in an arm’s length transaction.

Big money will still be there but the frenzy will settle down and AD’s making budgets will be doing the complaining and they’ll be doing that behind closed doors.
05-12-2022 02:47 PM
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Big 12 fan too Offline
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Post: #36
RE: From A Cuse Fan (Split of athletic models)
(05-12-2022 02:47 PM)arkstfan Wrote:  I am not convinced that Joe Booster putting $100,000 in the Enormous State University athletic department and now throwing $50,000 into the NIL collective is going to maintain this new $150,000 expenditure. I suspect the total outlay will begin to drift downward back closer to $100,000

What I am convinced of is that right now NIL is like a post-Prohibition beer bust. Per capita consumption isn’t going to maintain first day numbers.

If you are a Bama fan and putting $50,000 toward a locker in the locker room or being a small part of paying Saban’s salary makes you feel good. Putting up a four year $50,000 per year commitment on a kid who would/should transfer to Middle Tennessee State except he wants the money promised him isn’t going to feel so rewarding.

Publicly traded companies that aren’t Nike and Adidas betting on future first rounder all-stars are going to be questioned about their use of advertising and promotion money on players who have a near zero NIL value in an arm’s length transaction.

Big money will still be there but the frenzy will settle down and AD’s making budgets will be doing the complaining and they’ll be doing that behind closed doors.
We haven’t yet hit overvalue yet. 800k for one of the best pgs in the country is very cheap.

It’s not going way. It’s by far the most important input. If boosters give to the university, it will find a way to the players. With Johnson vs NCAA, it likely is just given to the players

These boosters spend big on coaching salaries in large part because of recruiting implications. Heck, they spend big just to make coaches go away!

This is just another operating cost but with bigger ROI. It will be the first to get paid
(This post was last modified: 05-12-2022 02:55 PM by Big 12 fan too.)
05-12-2022 02:53 PM
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XLance Online
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Post: #37
RE: From A Cuse Fan (Split of athletic models)
(05-12-2022 02:15 PM)Big 12 fan too Wrote:  
(05-12-2022 01:57 PM)XLance Wrote:  
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  
(05-11-2022 11:24 AM)Frank the Tank Wrote:  I doubt it.

All of these schools seem to want their cake and eat it, too.

It's easy for all of these schools to bemoan that NIL, the transfer portal and other changes in college sports are negatively impacting their respective academic missions.

However, what's not easy for all of these schools is no longer seeing their football and/or basketball games in prime slots on major TV networks while making tens of millions of dollars per year from their respective conferences. That's what would happen if they become a lower tier version of college sports compared to the "SEC pro model" that you've mentioned here.

If these schools are truly and legitimately fine with the latter (the direct loss of money and exposure by downgrading sports), then more power to them. I don't buy that will happen at all, though - not Stanford, not ND, not Duke, not anyone that's currently in a P5 league. Call me crazy, but unilaterally downgrading money and prestige (which is conferred with P5 membership) isn't something that really wealthy and prestigious schools actively choose to do in anything that they participate in, which would include sports.

Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

Frank, you might have said "the insurance company will pay for it".

Third party monies are funds that would have gotten to the school instead of some individuals pocket.
NIL isn't going to kill the goose, but it will rob the nest of lots of golden eggs.

Which is still a win for AD budgets.
They get donors to spend more on the most revenue generating input, but keep the revenue.
The fixed costs and inflated salaries will come down now that the arms race is on donors buying players.

The real question is once the ADs can spend on players directly, how quickly to they get a CBA in place? Otherwise ADs will be incentivized to compete with each other on players. Still, a lot less need for gold locker rooms then, but a CBA is beneficial to schools and players

Help me understand why is a win for AD budgets.
Donors don't give money to the school but make risky investments in players of unknown benefit to the school.
The school gets less money but keeps the revenue?
How long will it take to reduce those inflated salaries?
05-12-2022 03:19 PM
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Big 12 fan too Offline
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Post: #38
RE: From A Cuse Fan (Split of athletic models)
(05-12-2022 03:19 PM)XLance Wrote:  
(05-12-2022 02:15 PM)Big 12 fan too Wrote:  
(05-12-2022 01:57 PM)XLance Wrote:  
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

Frank, you might have said "the insurance company will pay for it".

Third party monies are funds that would have gotten to the school instead of some individuals pocket.
NIL isn't going to kill the goose, but it will rob the nest of lots of golden eggs.

Which is still a win for AD budgets.
They get donors to spend more on the most revenue generating input, but keep the revenue.
The fixed costs and inflated salaries will come down now that the arms race is on donors buying players.

The real question is once the ADs can spend on players directly, how quickly to they get a CBA in place? Otherwise ADs will be incentivized to compete with each other on players. Still, a lot less need for gold locker rooms then, but a CBA is beneficial to schools and players

Help me understand why is a win for AD budgets.
Donors don't give money to the school but make risky investments in players of unknown benefit to the school.
The school gets less money but keeps the revenue?
How long will it take to reduce those inflated salaries?

Because right now they are forced to spend millions on even riskier things. What’s the ROI on a building? On an unproven coach?

Instead, they can now have donors just buy players.

In fact, if donors won’t do it, you’ll see schools redirect funds to NIL, basically giving donors their money back to donate to NIL, as it’s a better driver of revenue..

In the transition period, funds will be borrowed for fixed costs if donors don’t increase and variable cost relief isn’t an option. Effectively the same as refinancing.

Paying players is much more efficient than the previous arms race. It is actually a direct revenue generating cost. Likely with a CBA to keep it from escalating
05-12-2022 03:30 PM
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Post: #39
RE: From A Cuse Fan (Split of athletic models)
(05-11-2022 12:26 PM)Frank the Tank Wrote:  
(05-11-2022 12:18 PM)Scoochpooch1 Wrote:  
(05-11-2022 11:24 AM)Frank the Tank Wrote:  
(05-11-2022 11:10 AM)TexanMark Wrote:  
(05-11-2022 11:08 AM)PeteTheChop Wrote:  Hate to burst the your contact's bubble, but this idea with these schools ain't ever making it outside the ivory tower

Pete I tend to agree with you...however, just the threat might be enough to bring some sanity to the NIL and portal chaos.

I doubt it.

All of these schools seem to want their cake and eat it, too.

It's easy for all of these schools to bemoan that NIL, the transfer portal and other changes in college sports are negatively impacting their respective academic missions.

However, what's not easy for all of these schools is no longer seeing their football and/or basketball games in prime slots on major TV networks while making tens of millions of dollars per year from their respective conferences. That's what would happen if they become a lower tier version of college sports compared to the "SEC pro model" that you've mentioned here.

If these schools are truly and legitimately fine with the latter (the direct loss of money and exposure by downgrading sports), then more power to them. I don't buy that will happen at all, though - not Stanford, not ND, not Duke, not anyone that's currently in a P5 league. Call me crazy, but unilaterally downgrading money and prestige (which is conferred with P5 membership) isn't something that really wealthy and prestigious schools actively choose to do in anything that they participate in, which would include sports.

Totally understand that but what's the breaking point?
Ex: School earns $40m/year from TV and pays $400m/year of NIL.
Is this a business proposition you would go forward with?

Example seems dumb but NIL is spiraling out of control.
Bama and OSU paid $1m/yr to QBs that added no $ value to their teams/schools in 2021. If Young and Stroud weren't on the team would the schools not receive the TV money? Would the fans not show up to games? They were simply paid to choose those schools to play for. So paying the 7th string OL $40m/yr doesnt seem like the best business move but the market may dictate it.

The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

Exactly.

Also, the hypothetical is laughable. A college team whose players make $400 million in NIL money? LOL. The NFL salary cap for each team for next season is $208 million. The idea that a college team is going to have a "payroll" that is double an NFL team's payroll is not an idea that should be taken seriously.
05-12-2022 03:48 PM
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XLance Online
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RE: From A Cuse Fan (Split of athletic models)
(05-12-2022 03:30 PM)Big 12 fan too Wrote:  
(05-12-2022 03:19 PM)XLance Wrote:  
(05-12-2022 02:15 PM)Big 12 fan too Wrote:  
(05-12-2022 01:57 PM)XLance Wrote:  
(05-11-2022 12:26 PM)Frank the Tank Wrote:  The school doesn't pay NIL in the first place. This is third party money. That's the first mistake that so many posts seem to make. No school should care whatsoever how much NIL money their players are receiving (and if anything, ought to be encouraging it so it disincentivizes those players from seeking more direct compensation from the schools themselves). A school earning $40 million from TV while their roster is receiving $400 million in NIL compensation is a school that's earning $40 million from TV while paying $0 in NIL compensation (with a lot of happy players that aren't trying to get money directly from the schools). That's essentially the best deal ever for the schools.

Frank, you might have said "the insurance company will pay for it".

Third party monies are funds that would have gotten to the school instead of some individuals pocket.
NIL isn't going to kill the goose, but it will rob the nest of lots of golden eggs.

Which is still a win for AD budgets.
They get donors to spend more on the most revenue generating input, but keep the revenue.
The fixed costs and inflated salaries will come down now that the arms race is on donors buying players.

The real question is once the ADs can spend on players directly, how quickly to they get a CBA in place? Otherwise ADs will be incentivized to compete with each other on players. Still, a lot less need for gold locker rooms then, but a CBA is beneficial to schools and players

Help me understand why is a win for AD budgets.
Donors don't give money to the school but make risky investments in players of unknown benefit to the school.
The school gets less money but keeps the revenue?
How long will it take to reduce those inflated salaries?

Because right now they are forced to spend millions on even riskier things. What’s the ROI on a building? On an unproven coach?

Instead, they can now have donors just buy players.

In fact, if donors won’t do it, you’ll see schools redirect funds to NIL, basically giving donors their money back to donate to NIL, as it’s a better driver of revenue..

In the transition period, funds will be borrowed for fixed costs if donors don’t increase and variable cost relief isn’t an option. Effectively the same as refinancing.

Paying players is much more efficient than the previous arms race. It is actually a direct revenue generating cost. Likely with a CBA to keep it from escalating

Why? Nobody ever paid players before (except the SEC).
Your math is still fuzzy, now you have the schools paying the players with NIL funds and borrowing money for capital improvements instead of using donated funds?
It must be "new math".
05-12-2022 03:54 PM
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