How much money would the University of Utah need to raise to pay its athletes?

Scratching his head and peering around a room full of some of the Big 12′s most prominent leaders, Gene Taylor felt a sense of puzzlement.

As Big 12 leaders and officials discussed the upcoming changes to the NCAA’s name, image and likeness rules, Kansas State’s athletic director wasn’t the only one to have those feelings during the National Association of Collegiate Directors of Athletics (NACDA) & Affiliates convention in Las Vegas earlier this month.

As details emerge from the $2.77 billion antitrust House settlement, which was agreed upon by the Power Four and NCAA on May 23 and is still moving through the courts, there have been more questions than answers.

“Coaches are coming to me on a regular basis asking, ‘What are we doing? What’s it look like? And, to give them a concrete answer, right now, I just don’t have one,” Taylor told The Salt Lake Tribune.

“We’re looking at everything from a financial perspective. We’re talking to our collective. What’s that look like in the future? Do those dollars ultimately come in house? Do we control them? Do we create a third-party marketing group to manage it? I mean, all these things are part of the conversation. And, we’re just now kind of working through the details of each of those options.”

There are disputes on whether or not revenue-sharing agreements will abide by Title IX, what the future of non-revenue sports will be and how private equity might help fill the gaps for each athletic department in the Big 12.

While some issues have more clarity than others, there are still things that some athletic directors can’t answer. The Utes and their athletic program, according to a statement from the university, are ready to embrace the changes coming with the House Settlement and revenue sharing, but there’s so much left for the program to work on behind the scenes.

“This is a time of unprecedented change in intercollegiate athletics, and the University of Utah is actively engaged in the national discussions that will define the future of our industry. The proposed settlement terms in the antitrust litigations bring much-needed clarity about future expenses so that the University of Utah can be best positioned to support its student-athletes as they continue to compete at the highest levels,” Utes athletic director Harlan wrote in a statement to The Tribune.

“We embrace these changes and will continue to be deliberate, responsible, and innovative as we evaluate and implement a future model of intercollegiate athletics that is focused on supporting our student-athletes and the University of Utah.”

According to the language of the groundbreaking agreement, the NCAA will pay back damages to former athletes, allow in-house payments from universities to their athletes and a potential $22 million salary cap will be set into motion.

For Utah, as it gets set to enter the Big 12 this summer, that means finding a seat at the table and remaining a competitive institution in this space is more than necessary, especially as the next round of college realignment looms on the horizon and talks of a potential Power 2 gain steam.

As it stands, The Utes’ 2022-23 athletic department budget had total operating revenue of $126.25 million in the 2023 fiscal year with total operating expenses of $124.45 million, leaving an excess of $1,802,807 according to data uploaded by the athletic department. The Utes’ football program accounted for $92.5 million — more than 73% of the athletic department’s revenue during the fiscal year.

Once revenue sharing begins in the 2025 fiscal year, up to $22 million of Utah’s athletic department revenue could be allocated to student-athletes. According to a recent report from CBS Sports, Big 12 members are considering $800 million to $1 billion in a private equity infusion from CVC Capital Partners for a 15-20% stake in the conference over the next several years to help keep up with the NCAA’s changes. There are also talks of selling the naming rights of the Big 12 to a corporate sponsor for millions, with the insurance firm Allstate rising as one potential suitor, which would rename the conference to the Allstate 12.

Individually, schools are looking at investing in their own direct private capital plans and corporate sponsors to fill even more gaps in their budgets.

According to the Crimson Collective’s Drew Watson, who is the director of development and helps fundraise for the Utes’ collective, everything is on the table. Watson envisions a scenario where Utah’s collective could serve as a third-party marketing agency inside the athletic department at the start of the 2025 fiscal year.

“We want to hit that ($22 million) cap,” Watson told The Tribune. “If we can get a jump start on it, we want to leave them in the best-case scenario.

“What will happen is either the collective employees could go up to the university and help fundraise there, but a lot of these universities are going to need third-party groups to come in and help fill in the gaps, right? And so the Garff Family (head of the Crimson Collective) down here, they’re already working on strategies to help fill in those gaps, and they want us involved.”

To raise money, Utah’s collective will need the help of corporate sponsors, philanthropic donations and fan subscriptions to reach its $22 million goal. It’s unclear whether or not Utah will partner with any private capital resources to help with revenue sharing.

According to Watson, the Crimson Collective has raised “close to” $6 million for football already.

How the rest of the money under the cap will be raised and dispersed is another question.

“No donations have come in for sports outside of football, men’s basketball, women’s basketball or gymnastics,” Erin Trenbeath-Murray, the Crimson Collective’s vice president of philanthropy, told The Tribune. “Now that the U. can actively fundraise, I’m anticipating in the next two to three months that they’ll make substantial progress.”

‘Equal and fair have never been the same’

Kyle Kepler is all about leaning into change.

In his 19 seasons at the helm of Utah’s women’s track and field program, he’s seen three conference transitions, experienced the COVID-19 pandemic and a lump of other changes, but nothing has posed a bigger potential risk to his sport than revenue sharing.

While some around the country worry about cuts to non-revenue sports, Kepler has hope for the future of the Utes women’s track and field team.

“Equal and fair have never been the same,” Kepler said. “We all understand that. But, I think for sports like us, we just want to continue to have great opportunities to showcase our talents, and you have the space to do it, whether that looks the same, or as close to the same as what their counterparts are doing.”

In the Big 12 and other conferences, there are varying ideas as to how, if programs opt into the revenue-sharing model, money will be dispersed. Kansas State’s Taylor notes that he envisions two models: one where Title IX is fully enforced or another where athletes are paid based on the revenue their sport generates.

Despite the difficulties moving forward, Taylor also thinks most athletic departments will drop non-revenue sports as a last resort.

“The dollar amount is what is the challenge,” Taylor said. “Whether it’s from a conference-wide decision or university-wide decision that it has to be equitable. … Then we’ll probably do it like we do our scholarships and try to keep it in the percentage range of equitability.

“If it’s not required for us to be equitable, then you’ve got basically two revenue-producing sports here at K-State in football and basketball.”

Jamie Pollard, Iowa State’s athletic director, says that changes will have to be made to everyone’s system of operation in the Big 12, but eliminating and cutting opportunities for non-revenue sports remains at the bottom of his list, too.

“Fundamentally, our goal is not to eliminate opportunities,” Pollard told The Tribune. “Those opportunities are probably going to have to look different going forward, because there’s not unlimited resources. And it’s critical that football and basketball are healthy because football and men’s basketball fund 90 to 95% of what we do in college athletics.

“You can either keep all the opportunities but change what those opportunities look like? Or do you provide less opportunities but keep the opportunities like they are today?”

Where the Utes fall on that scale is yet to be seen, especially as officials work out funding and navigate the complexities of the House settlement’s legal language. The Crimson Collective’s Trenbeath-Murray, despite no university affiliation, expects the university to operate in the confines of Title IX, especially when the collective gets absorbed by the university in 2025.

“I can’t imagine for a moment that the University of Utah would ever not adhere to Title IX,” Trenbeath-Murray said. “I think it’s not just in the adherence of the letter of law. I think they adhere to the spirit of law with Title IX.”

What that scope might look like, though, is up for consideration. Ohio State’s soon-to-be retired athletic director Gene Smith says the Buckeyes will tier different sports with revenue sharing, which will de-emphasize the importance of some non-revenue sports, garnering them less or, in some cases, no funding.

Other schools like Illinois in the Big Ten are preparing to split the 22% revenue cap down the middle in the most equitable way possible, while still prioritizing men’s basketball and football. Whichever way that goes — depending on lawsuits or rulings on Title IX — student-athletes becoming employees would add more murkiness to the waters of revenue sharing.

Like Dartmouth’s men’s basketball team has, employee status would give athletes the right to unionize or collectively bargain. It could also throw the potential equitability of Title IX out the window.

“As soon as college athletes are classified as employees, Title IX no longer applies,” Charles Macaulay, a sports management professor at the University of Massachusetts, told The Tribune.

Taylor hopes to avoid that model in the Big 12 and nationally.

“We’re going to do everything we can to avoid that,” Kansas State’s athletic director said. “... Hopefully the decisions that we make put us in a position where, ultimately, that’s the direction we don’t have to go.”

While the legal discourse continues to develop, fundraising continues among collective leaders like Watson and Trenbeath-Murray, and the hope is that non-revenue sports can remain prevalent.

Especially for those athletes that participate in them.

“I hope that it can stick,” Utah senior track and field athlete Ally Gomm said. “I hope that everything that they’ve done (in the past) will stay because everyone deserves an opportunity. Taking it away would throw us backward.”

‘Everything’s on the table’

Where questions have arisen about securing funding for revenue sharing, many have sought out private equity as an answer.

Taylor, Pollard and other Big 12 athletic directors signed a non-disclosure agreement before being presented with the potential deal with the CVC capital group when conference leaders met in Dallas a few weeks ago. It’s unclear how the information leaked, but it has provided a first glimpse into how Power Four conferences might adapt.

“They would not actually take any equities in the university or the university’s athletics program,” Mit Winter, an NIL attorney based in Kansas City, said. “They’re really calling it private capital, where, in return for giving this large chunk of cash to the schools or the athletics program, they’re then basically receiving a royalty revenue on all new athletics revenues generated from that time period.”

So far, it seems like that’s a bet many institutions are willing to take, but it could have its drawbacks. Investing in private capital would gamble on revenues to raise over the time period, which an athletic department could then pay off when the royalty is due.

The University of South Florida has gambled with private equity sharing when looking to build its new football stadium, which resulted in the USF Board of Trustees approving a 20-year taxable fixed-interest rate bank loan for $200 million with Truist Bank, according to the university’s finance agenda from Feb. 27, 2024.

Those interest rates are projected to be close to 7%, meaning the university will pay close to $19.8 million annually, higher than its expected economic return from the new football stadium.

Winter doesn’t see something like that happening with athletic departments, however.

“It’s just basically a loan and they’re getting a percentage royalty on new revenue after that,” Winter said. “It’s not the traditional private equity that people think about.”

Whether or not the Utes will rely on private equity sharing is yet to be seen, but Harlan has made other multimedia deals with NIL in mind just this year. On May 1, the university announced a 10-year partnership with JMI Sports, a multimedia and venue development company, ahead of the Big 12 move.

On the collective side, raising money to reach the cap is non-negotiable. So far, the Crimson Collective is banking on fan donations and subscriptions to help increase revenue ahead of the 2025 fiscal year.

Trenbeath-Murray says that asking donors for money each year to meet that budget will soon be a failing model. Fan subscriptions to help raise money for the Crimson Collective have been slow, she said, but there is an expectation for it to pick up over the summer.

“I think that universities in general that just go after year-by-year philanthropic gifts to hit their revenue share are in big trouble because that is not a sustainable model,” Trenbeath-Murray said. “You have to have this leadership ability to pivot quickly and have a different way that you’re going to generate revenue.

“We can’t just keep going back to the same people over and over again.”

In terms of the Big 12, Taylor is all in favor of considering different revenue opportunities to keep up with the SEC and Big Ten, especially since their media rights contracts are significantly larger than the Big 12′s current one.

Kansas State’s AD thinks it’s a model all Big 12 programs, including Utah, should be open to.

“I think as we all sit around the room as athletic directors … anything is worth putting on the table and discussing and looking into,” Taylor said. “I think right now (we can’t) say no to any particular avenue.

“Whether it’s investment from a third party — or all the things that we’re doing that are different right now — I think everything’s on the table to be considered.”

‘Football is king’

Watson will have to clean out several polos with red Pac-12 logos from his closet, as Utah’s entrance to the Big 12 becomes official this summer.

It’s still an adjustment for him and his Crimson Collective colleagues, as they’ve gotten so used to playing West Coast schools like USC, Washington and Oregon. Now, as the Utes prepare to enter the Big 12 — their fourth conference transition in three decades — Watson and university leaders want to make sure Utah is ahead of the curve when the landscape shifts once more.

For them, that means investing in their football program before anything else.

“BYU, they’re seeing their basketball program become really good, so they’re putting a lot of stuff in there, and maybe that’s how we are at Utah,” Watson said, “But football is king, right? Nobody watches Thursday night conference games between two conference foes unless it’s a football game. People plan their schedules around it.”

It all comes down to revenue at the end of the day.

“Our biggest hurdle is just getting more than a handful of families involved,” Watson said. “Whether it’s just 25 bucks a month or more, we could divvy that up to all the sports, whether it’s skiing or gymnastics, women’s basketball, men’s basketball, football.

“We have a budget, and it’s growing.”

Watson is expecting to receive a few Big 12 shirts in the coming weeks, so he doesn’t get caught wearing the logo of Utah’s old conference.

For him, and the program as a whole, the old Pac-12 insignia serves as a near-forbidden reminder of what could happen if their program doesn’t stay ahead of the curve:

Program and conference irrelevancy is always lurking around the corner.

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