College Sports Departments Preparing for Financial Impact of Direct Athlete Pay

College athletic departments across the country are bracing for major changes as a result of a proposed $2.8 billion antitrust settlement that would allow schools to provide up to $21 million annually to athletes. This revenue-sharing model could mean significant budget cuts and tough decisions for athletic programs.

Already, schools like Iowa State and Texas A&M are feeling the impact. Iowa State has scrapped plans for a new wrestling facility, citing the need to account for direct compensation to athletes. Texas A&M has laid off a dozen athletic staffers as part of a reorganization related to emerging threats to their business model.

The settlement signals the end of an amateur athletics model that has been in place since the NCAA’s founding in 1906. With realignment, the transfer portal, and the explosion of name, image, and likeness compensation already reshaping college sports, the additional revenue allocation to athletes will further disrupt the landscape.

SEC Commissioner Greg Sankey acknowledges that tough decisions lie ahead for athletic departments as they navigate this new financial reality. Schools will need to find new revenue streams and cut costs, potentially putting facilities projects on hold.

The impact of these changes will be felt across all levels of college athletics, from football powerhouses to programs with more modest budgets. As schools grapple with the implications of the settlement, the future of college sports hangs in the balance.