Read on Twitter
1/ Schools won't go “poor”, but we should ask ourselves whether revenue increases like this are actually a solution to the financial pressures faced by lower/mid of P5 (who have always struggled to keep pace with top of P5). https://twitter.com/slmandel/status/1272920447806345221
2/ History shows financial pressures will continue, even as more revenue comes into the system. For example, most P5 departments have seen revenue up 75%+ in last ten years, but many still operating with deficits or campus support (before COVID).
3/ Why? Athletics departments spend essentially all revenue they make each year on their competitive and student-athlete welfare missions. Spending most or all revenue each year on mission is a normal characteristic of non-profits. Expenses always rise commensurately w revenue.
4/ Even if making more revenue on an absolute basis because of new TV deals, low/mid of P5s will still struggle to keep up with highest revenue earners in P5 on a relative basis... and will thus remain under financial pressure as they try to match competitive investments.
5/ New TV deals not necessarily a financial solution for low/mid P5 schools. More effective would be national restrictions on spending to stop highest revenue earners from further driving up expenses as revenue continues to increase.
6/ Rules to restrict spending have indirect benefits too, especially for fans who attend games. Since revenue above a limit couldn’t be spent, schools less incentivized to drive for max revenue. Less urgency to raise tix prices, make scheduling tradeoffs for TV revenue, etc.
7/ Overall, more revenue is not complete answer to financial challenges. College athletics is only industry in US featuring non-profit organizations involved in zero-sum competition. We have to design solutions to financial challenges w this in mind. More: https://www.athleticdirectoru.com/articles/kevin-blue-rising-expenses-in-college-athletics-and-the-non-profit-paradox/
