College sports departments preparing for financial impact of impending direct pay for athletes

The landscape of college athletics is set to undergo a seismic shift as the NCAA and the nation’s five largest college conferences have agreed to pay nearly $2.8 billion to settle antitrust claims. This monumental decision paves the way for a groundbreaking revenue-sharing model that could see millions of dollars directed directly to athletes as soon as the 2025 fall semester.

With schools potentially providing up to $21 million annually to athletes or up to 22% of the average power league school’s annual revenue, tough decisions lie ahead for athletic departments across the country. Realignment, the transfer portal, and the explosion of name, image, and likeness (NIL) compensation have already transformed college athletics, and this settlement signals the end of the amateur athletics model that has been in place since the NCAA’s founding in 1906.

The impact of this shift in revenue allocation is already being felt, with schools like Iowa State and Texas A&M making proactive changes. Iowa State scrapped plans for a new wrestling facility, citing the challenge of accounting for direct compensation to athletes, while Texas A&M laid off a dozen staffers as part of a reorganization related to emerging threats to their business model.

As athletic departments grapple with the implications of this settlement, tough decisions lie ahead. Staff cutbacks, changes in facility spending, and the need to find new revenue streams are all on the horizon. The impact will be felt across the board, from powerhouse football programs to smaller schools in Group of Five conferences and the FCS.

The future of college athletics is uncertain, but one thing is clear: change is coming, and it will reshape the landscape of collegiate sports as we know it.