College Sports at Inflection Point: Revenue, Risk, and Resilience

Key Quotes

"you know one thing that really stood out and and i really enjoyed today was was the pac 12 panel i moderated a little bit earlier in the day really interesting to just talk through with that group kind of the process of what they've gone through the pac 12 you know was really kind of left for dead uh with washington state and oregon state and certainly i think that we can all agree that the pac 12 is you know not what it was quite but i do think that the fact that this group held together was able to rebuild an entire conference in the middle of a really crazy and uh certainly chaotic landscape uh speaks volumes to the people involved and really shows something that i think we haven't seen in modern college athletics it's truly a one of one situation"

Ben Portnoy highlights the resilience of the Pac-12 conference leadership. Portnoy explains that despite the conference being on the brink of collapse, the individuals involved managed to rebuild it. This accomplishment, Portnoy notes, is a rare and significant achievement in the current landscape of college athletics.

"you know when asked about the big ten and and they're coming close to doing a uh a deal with the pension fund uh for the conference saying that you know big ten enterprises that for profit uh commercial entity that they were going to create they should do that anyway you know that you don't needed to have an institutional investor to back it that is sort of an opportunity to create more revenue drive uh further commercial activity for the conference as a whole and that you can do that with or without private equity right"

Chris Smith relays Ross Bjork's perspective on the Big Ten's potential for-profit commercial entity. Smith explains that Bjork believes the conference should pursue this entity regardless of whether it involves an institutional investor. Bjork suggests this approach offers an opportunity to generate more revenue and drive commercial activity for the conference.

"i frankly went into that i don't know very little right about how those roles operate and so getting to pick their brains about how they think about creative revenue generation the role they play in recruitment the conversations they're having with athlete agents i thought really pulled the curtain back a little bit on how the gm role is starting to formalize and the different sorts of backgrounds i can take on that uh function within the athletic department"

Chris Smith discusses his fascination with the emerging collegiate General Manager (GM) roles. Smith explains that his initial understanding of these roles was limited, but speaking with individuals in these positions provided insight into their strategies for revenue generation, recruitment, and athlete agent interactions. Smith concludes that these conversations revealed the formalization and diverse backgrounds associated with the GM function in athletic departments.

"he listed all the things that have happened in college sports over the last five years covid social unrest nil house settlement and sports betting and so on and then said revenues up attendance is up viewership is up but structurally we are messy right now and you know general managers that new position is something that's being created to help with that structure and providing some some order um but there's a long way to go"

Rachel Axon shares Russ Bjork's assessment of the current state of college sports. Axon explains that Bjork points to numerous disruptive events in recent years, such as COVID-19, NIL, and legal settlements, which have led to increased revenues but structural disarray. Axon notes Bjork's view that the new GM position is intended to address this structural messiness and bring order, though significant challenges remain.

"you know i think it was an interesting discussion to sort of level set the stakes there you know bob bowls b fron the night commission jessica mendoza um obviously stand up athlete now with uh you know olympic medals now with the spn you know making the point most schools today you know pre house had compliance issues had not reached gender equity in the 53 years since title nine was passed and now you're you're looking at a system that's going to funnel 80 90 of that that red share money um into primarily one you know football or or one or two and in men's basketball sports and so how do you uh make decisions right how can these athletic directors be incentivized when it's you know i need a few more million dollars that it's not to cut this women's program"

The speaker highlights the challenges of maintaining gender equity in college sports amidst shifting revenue models. The speaker explains that even before recent financial changes, many schools struggled with Title IX compliance. Now, with a significant portion of revenue likely directed towards football and men's basketball, athletic directors face pressure that may disincentivize supporting women's programs.

"but i think the only sure thing i would say i would go to gabe feldman from tulane there will be litigation you know we're already seeing some litigation around just title nine general issues that are there maybe not yet seen uh a lawsuit challenging the the revenue distribution under the red share um and nobody thinks that's anything but coming you know it's just a matter of time and uh will be there at some point sure"

The speaker relays Gabe Feldman's prediction regarding future legal challenges in college sports. Feldman suggests that litigation is inevitable, citing ongoing issues with Title IX compliance. The speaker notes that while lawsuits specifically challenging revenue distribution under revenue sharing agreements have not yet emerged, Feldman believes they are only a matter of time.