Schools in basketball-centric leagues face different economic challenges with NCAA settlement

Published 12:32 pm Thursday, May 30, 2024

By Aaron Beard, AP Basketball Writer

Bernadette McGlade leads an Atlantic 10 Conference built around basketball and focused on getting multiple bids to the NCAA men’s tournament much more than anything tied to big-time football.

Yet her league is among dozens conferences and scores of schools that will feel the impact from the NCAA and major college conferences approving a $2.8 billion settlement of federal antitrust claims that calls for paying athletes with a plan framed in a football-driven college sports landscape.

“We’ve got to move forward, we want to continue to preserve our rich history in basketball,” McGlade told The Associated Press. “So we have to get to the strategy table and start doing analysis.”

Schools that lean on basketball in leagues like the A-10, Big East — home to UConn, the two-time reigning men’s national champion — and the West Coast Conference face the prospect of directing millions to their athletes every year. But they have to figure out the best way to do that without streams of football money flowing in.

“With the opportunity that football brings, there’s a lot of (financial) obligation that football brings, too,” said Gonzaga athletic director Chris Standiford, whose WCC basketball program has gone from mid-major to national power over the past quarter-century. “So it cuts both ways. We don’t have the obligation of the operations and new expenses associated with the compensation of football players. But we don’t have the benefit of the revenues that come with it, particularly the TV revenues.”

The settlement includes the NCAA and conferences paying $2.77 billion over 10 years to more than 14,000 former and current college athletes who say now-defunct rules prevented them from earning money or endorsement deals dating to 2016. Under the plan, each school would be allowed to set aside up to around $21 million to pay athletes, a cap that could change. It could start as soon as the 2025 fall semester.

The lawsuit targeted the so-called Power Five conferences – Atlantic Coast, Big 12, Big Ten, Pac-12 and Southeastern – as well as Notre Dame But coming up with money to pay for the settlement will hit hundreds of other Division I member schools in the form of smaller annual payouts from the organization. That revenue flows largely from the NCAA’s lucrative TV contract for the men’s basketball tournament and its other championship events.

The NCAA has no role in the College Football Playoff or bowl games and TV deals for football are struck at the conference level.. Yet schools with smaller or even no football program will be shouldering a piece of the settlement before even getting into paying future athletes.

“I think the real interesting angle here is: Why does men’s basketball pay for the entire overhead of college athletics and college football doesn’t contribute?” Standiford asked.

McGlade went a step further, noting that the projected CFP per-school payouts alone to the Big Ten and SEC (around $22 million) largely covers the estimated annual amount a school can pay to athletes. McGlade estimated the focus for the basketball-focused schools in her league could be generating around $3 million to $5 million in annual payments by comparison.

“We knew the settlement was being discussed and I think everyone across D-I was supportive of that for this whole year,” McGlade said. “We didn’t know the gory details of what the payment model would be. The disproportionality is a real concern, and it wouldn’t have taken that much for that proportionality to get balanced a little bit more and everyone be a little bit more respectful of each other.”

Jay Bilas, a former Duke player and attorney who is also an ESPN basketball broadcaster, said NCAA member schools put themselves in this position by voting “in lockstep to restrict athletes from making money all these years.”

“So there’s no difference in culpability from the University of Georgia to Marquette,” Bilas said. “They’re all equally culpable in violating federal antitrust law. So that to me should not be lost in all this, that all of them were of like mind in saying the athletes get nothing but scholarship or stipend or whatever it is.”

It will take a lot of work to find the best answer for each school within what amounts to a vastly different economic model.

At Gonzaga, for example, the men’s basketball program generated about $19.2 million in revenue for the 2022-23 season according to Education Department figures. That represented nearly 45% of that year’s overall athletics revenues ($42.9 million).

That was similar to the Atlantic 10’s Dayton, which was ranked No. 24 in the final AP Top 25 of the season. The Flyers men’s basketball program accounted for 44% of athletics revenue ($40.1 million). In the Big East, men’s basketball accounted for north of 48% of total revenues at football-free schools like Marquette ($42.6 million) and Creighton ($35 million).

By comparison, blueblood names like Duke and North Carolina (ACC), Kentucky (SEC) and Kansas (Big 12) from football-driven power conferences had men’s basketball programs accounting for no more than 29% of total revenue that exceeded roughly $138 million in each case.

At football-crazy Alabama, a men’s basketball program that was the No. 1 overall seed in the 2023 NCAA Tournament and reached this year’s Final Four accounted for just 10.8% of total revenue ($191.2 million) for the 2022-23 season.

“I think everybody would identify that Villanova’s investment in basketball is important at Villanova, or UConn, or whoever, and they’re going to continue to do everything they can to compete at that level,” Standiford said. “And we’ll do the same. But where does that money come from?

“I don’t think it benefits us,” Standiford added. “But I also think we’re a very unique group of schools. I don’t know how you would ever attain our status if you didn’t have it already. I think that’s what it’s going to change.”

Bilas, however, remained confident that basketball-centric programs will “make it work,” noting that athletics success can fuel school-changing growth and improvements beyond sports.

“These revenue streams are growing and they’re going to continue to grow because live sports is very valuable,” Bilas said. “It’s not just valuable on the football side, that’s the most valuable. But basketball’s really valuable. Women’s basketball, some of these other sports. So we’ll see how it comes out.

“I see all these different institutions continuing to compete at a high level, but now they’ll have to compete for talent in the economic realm.”