3 min
Changes in college football continue to be driven by dollars (and sense?)
The landscape of college sports, and particularly that of college football, has changed significantly in recent years. First, we have seen an almost constant realignment of collegiate athletic conferences, resulting in a few major mega-conferences, such as the SEC and ACC, Big Ten and Big 12, and the disintegration of a former major conference, the Pac 12. Most of the other changes related to the athletes, such as the ease with which student-athletes could transfer from one school to another and the ability for them to be paid for their name, image and likeness. All of these issues were potentially pointing to new business models in college sports, but within the last week, that landscape was shaken even further. Last week, the NCAA and its five major conferences settled multiple lawsuits to pay past and present student-athletes a total of $2.8 billion. The settlement also laid the foundation for the payments of college athletes starting in fall 2025. “The major unresolved questions are who will get paid and how much,” said Rick Franza, PhD, professor in the Hull College of Business at Augusta University. “If we ‘follow the money,’ we see that football and basketball (particularly men’s basketball) generate almost all of the revenues, and most of the revenues comes from major conferences. Therefore, most of the player payments are going to go to football and basketball, and given the size of the relative rosters, football teams will be much more costly.” Franza added that the settlement will further exasperate the revenue and cost differences between major conferences and their smaller conferences as well as between football and the so-called Olympic sports which generate little, if any revenue. It was always clear that from both a revenue and cost perspective, college football is very different from other sports. Revenues are much higher for the major conferences in football, and there is not the same extent of revenue sharing as there is in basketball due to the NCAA Tournament. On the cost side, with the new realignment of the mega conferences and expanded geographic footprints, there is a significant increase in travel costs for the Olympic sports. “While those expanded conferences were mainly driven by football revenues, they are also making all other sports more costly. Therefore, the time has come to separate football from other sports,” said Franza. One solution was first proposed by Chip Kelly, former Oregon and UCLA head football coach and now Ohio State offensive coordinator. He proposed a 64-school football conference in which the members would share all revenues, including television, which would more easily cover the NIL, and player pay costs. In recent months, similar proposals have been made for a college football “Super League,” which would include up to 80 schools. “This makes too much sense not to happen,” Franza said. “It allows the bigger football schools to share the plentiful available revenues while being able to pay the players what they will demand. At the same time, the other college sports would be able to revert to their traditional, geographical conferences and reduce travel costs driven up by the realigned mega- conferences.” He added that two conferences, the SEC and Big Ten, the most successful under the current alignment, could delay the implementation. Franza also predicts that an agreement taking the first steps toward such a structure will be reached sometime in 2024. “While it makes a lot of sense to go in this direction prior to the player settlement, it makes even more dollars and ‘sense’ now given the settlement,” said Franza. “While the SEC and BigTen currently make more money than any other conference, I think they will see the light for what is best for the future of college football.” Covering the business of sports and looking to know more? Then let us help. Richard Franza, PhD, is available to speak with media about trending issues like inflation, small business and the economy – simply click on his icon now to arrange an interview today.
