1 00:00:20,320 --> 00:00:22,560 Welcome back to Crimson Cast, GAIL and Clavio joining you. 2 00:00:22,560 --> 00:00:29,400 It is Saturday the 14th of June and hopefully all of you are 3 00:00:29,400 --> 00:00:33,480 surviving what appears to be monsoon season here in Indiana 4 00:00:33,480 --> 00:00:36,280 if you're living in almost any part of the state. 5 00:00:36,280 --> 00:00:41,320 Way too much rain so far this late spring slash early summer. 6 00:00:42,360 --> 00:00:44,760 Could just use some dry periods. That would be nice. 7 00:00:44,760 --> 00:00:48,960 Dry, warm like anything remotely summer like would be welcome at 8 00:00:48,960 --> 00:00:51,440 this point. But no, it's pouring here in 9 00:00:51,440 --> 00:00:55,640 Bloomington today and looks like it's not going to let up for a 10 00:00:55,640 --> 00:00:58,200 little bit. So great, that's just what we 11 00:00:58,200 --> 00:01:01,280 needed. As I've promised many of you, 12 00:01:01,280 --> 00:01:05,480 we're going to continue on talking about the situation 13 00:01:05,480 --> 00:01:09,800 going on in college athletics with the house settlement and 14 00:01:09,800 --> 00:01:13,280 with the changes to the system that are being proposed. 15 00:01:13,840 --> 00:01:18,640 We're going to have some more present day items coming up here 16 00:01:18,640 --> 00:01:20,960 relatively soon. We've got an interview with Ben 17 00:01:20,960 --> 00:01:24,960 Portnoy from Sports Business Journal coming up here tomorrow. 18 00:01:25,400 --> 00:01:27,600 We're also have some additional interviews. 19 00:01:27,600 --> 00:01:30,120 And we're going to dive into the NIL Clearinghouse now that we're 20 00:01:30,120 --> 00:01:34,640 starting to get a clearer sense of what the NCAA and its member 21 00:01:34,640 --> 00:01:36,880 schools are planning on doing with it. 22 00:01:37,440 --> 00:01:40,320 But I wanted to kind of take a little bit of a step back on 23 00:01:40,320 --> 00:01:44,360 this particular podcast and talk through how we got to where we 24 00:01:44,360 --> 00:01:47,920 are. This is a large topic. 25 00:01:47,920 --> 00:01:50,920 Like this is a topic I could do an entire class on. 26 00:01:50,920 --> 00:01:54,960 I got a whole course, like a full 16 week course just on the 27 00:01:54,960 --> 00:01:58,400 development of college athletics from where we started in the 28 00:01:58,400 --> 00:02:01,200 1800s to where we are today. We're not going to go that deep, 29 00:02:01,520 --> 00:02:05,880 so it's a little bit surface level, but I wanted to just give 30 00:02:05,880 --> 00:02:08,320 you some numbers and show you how we got to where we're at. 31 00:02:08,320 --> 00:02:11,640 Talk through some of the items that I think are critical to 32 00:02:11,640 --> 00:02:14,840 understanding the current environment and perhaps trying 33 00:02:14,840 --> 00:02:16,160 to figure out where things are going. 34 00:02:16,160 --> 00:02:17,480 So that's what this show is about. 35 00:02:17,760 --> 00:02:20,160 If you're not interested in the topic, totally understand. 36 00:02:20,520 --> 00:02:22,680 But for those of you who are interested in the topic, I 37 00:02:22,680 --> 00:02:24,920 thought it would be helpful to just show you some 38 00:02:24,920 --> 00:02:27,440 representations of why we are where we are. 39 00:02:27,440 --> 00:02:30,520 Explain some of the systems that are going on in the background, 40 00:02:30,920 --> 00:02:33,680 and maybe that'll help you to better understand why we're 41 00:02:33,680 --> 00:02:35,760 having all of these issues at this point. 42 00:02:35,760 --> 00:02:38,920 So we're going to dive into all that in just a second, but 43 00:02:38,920 --> 00:02:40,400 first, couple of housekeeping items. 44 00:02:40,400 --> 00:02:44,160 First of all, just a reminder that we are brought to you here 45 00:02:44,160 --> 00:02:46,480 at the Back Home Network by Home Field Apparel are presenting 46 00:02:46,480 --> 00:02:49,760 sponsor the place to go for the finest in college fashions, the 47 00:02:49,760 --> 00:02:51,800 softest fabrics, the coolest designs. 48 00:02:52,280 --> 00:02:55,960 And when you look across Home Field Apparel's website today, 49 00:02:56,040 --> 00:02:58,560 you got a ton of things that are going on. 50 00:02:58,760 --> 00:03:01,800 If you're affiliated with Michigan people, they've got 51 00:03:01,800 --> 00:03:05,360 some new Michigan hats going on on the site as part of their 52 00:03:05,360 --> 00:03:11,240 summer series, some some nice dad hats, couple of of of ball 53 00:03:11,240 --> 00:03:15,520 caps and so forth. A bunch of College World Series 54 00:03:15,520 --> 00:03:20,080 related items, a really cool set of Murray State items. 55 00:03:20,080 --> 00:03:23,520 There's a Coastal Carolina baseball jersey and a pretty 56 00:03:23,520 --> 00:03:26,840 exciting College World Series so far, obviously, as we've seen a 57 00:03:26,840 --> 00:03:31,320 couple of non power conference schools winning on the first day 58 00:03:31,640 --> 00:03:34,120 and hopefully some good baseball today as well. 59 00:03:34,120 --> 00:03:36,840 With everything going on out there in Omaha, head over to 60 00:03:36,840 --> 00:03:40,240 home field apparel. Use the code home 23, home 2-3. 61 00:03:40,240 --> 00:03:45,240 Get 15% off your first order and keep an eye on the socials with 62 00:03:45,240 --> 00:03:48,160 home Field apparel as they are always announcing new and fun 63 00:03:48,160 --> 00:03:52,200 things that you will want to wear and we would certainly 64 00:03:52,200 --> 00:03:53,720 recommend that you do so. So again, go to 65 00:03:53,720 --> 00:03:56,160 homefieldapparel.com, proud sponsor of the Back Home 66 00:03:56,160 --> 00:03:58,520 Network. Also, just a reminder folks, 67 00:03:58,520 --> 00:04:01,320 we're on YouTube. Be sure to head over to Back 68 00:04:01,320 --> 00:04:04,000 Home Network on YouTube. You can just search back home 69 00:04:04,000 --> 00:04:06,720 network, you'll find us. You can find all of the shows 70 00:04:06,720 --> 00:04:09,800 under the back home network banner, not just Crimson cast, 71 00:04:10,320 --> 00:04:14,320 but also assembly call doing the work podcast, the dribble Dr. 72 00:04:14,320 --> 00:04:17,720 that just had Mike Hall on from Big 10 Network earlier on this 73 00:04:17,720 --> 00:04:19,240 week. Austin doing a great job with 74 00:04:19,240 --> 00:04:23,760 that show, The X's and Joe's podcast, Crimson Cash and we got 75 00:04:23,760 --> 00:04:26,800 new shows coming. I'm excited to to let you know, 76 00:04:27,040 --> 00:04:31,080 just to tease, we've got a couple of new shows planned for 77 00:04:31,080 --> 00:04:35,120 this summer and fall and we're really excited about the folks 78 00:04:35,280 --> 00:04:37,720 that we're going to be adding. So looking forward to revealing 79 00:04:37,720 --> 00:04:42,080 those when the time comes. And we'll we'll have 80 00:04:42,080 --> 00:04:43,800 announcements for you. But you can find all that on the 81 00:04:43,800 --> 00:04:45,280 back home network's YouTube channel. 82 00:04:45,560 --> 00:04:48,080 We would recommend you subscribe, get notified whenever 83 00:04:48,080 --> 00:04:51,200 we go live and get notified whenever a new episode is 84 00:04:51,200 --> 00:04:53,200 uploaded. You can also follow along on 85 00:04:53,200 --> 00:04:57,120 Crimson Cast via Sub Stack, crimsoncast.substack.com. 86 00:04:57,560 --> 00:05:00,080 Get the podcast delivered right to your inbox. 87 00:05:00,080 --> 00:05:04,760 Also have some VIP episodes, some episodes for our paying 88 00:05:04,760 --> 00:05:06,400 subscribers. You can help to financially 89 00:05:06,400 --> 00:05:09,160 support the podcast, $5 a month, $50 a year. 90 00:05:09,160 --> 00:05:13,760 I'm going to have some thoughts on what happened in Pacers OK C 91 00:05:13,760 --> 00:05:16,640 game four. That'll go up on that a little 92 00:05:16,640 --> 00:05:20,680 bit later today. And we try to do about 1 93 00:05:20,760 --> 00:05:23,240 subscriber video every couple of weeks, sometimes a little bit 94 00:05:23,240 --> 00:05:25,960 more than that. So, you know, just a little 95 00:05:25,960 --> 00:05:28,680 something extra as a thank you for those of you who have chosen 96 00:05:28,680 --> 00:05:30,880 to financially support us. So again, 97 00:05:30,880 --> 00:05:33,680 crimsoncast.substack.com, we really appreciate the support. 98 00:05:34,560 --> 00:05:37,400 All right, we're going to dive into talking about the college 99 00:05:37,400 --> 00:05:41,200 sports landscape by taking a step back and talking about how 100 00:05:41,200 --> 00:05:44,920 we got to where we are at. So I think, you know, one of the 101 00:05:44,920 --> 00:05:49,640 things that we really need to establish, I guess first and 102 00:05:49,640 --> 00:05:53,880 foremost is, is this idea of what we're doing here with 103 00:05:53,880 --> 00:05:56,280 college sports. Yes, I'm going to use some 104 00:05:56,280 --> 00:05:58,520 PowerPoints for this, but I'm going to talk through the 105 00:05:58,520 --> 00:06:00,200 PowerPoints. So even if you're just listening 106 00:06:00,200 --> 00:06:04,200 on Apple or listening on Spotify as opposed to watching, you're 107 00:06:04,200 --> 00:06:08,200 not necessarily going to miss a huge amount. 108 00:06:08,200 --> 00:06:11,160 But I would like to show you folks some graphics and some 109 00:06:11,160 --> 00:06:13,920 charts to talk through what exactly we're looking at in the 110 00:06:13,920 --> 00:06:17,240 college sports landscape and and why things change so 111 00:06:17,240 --> 00:06:19,960 dramatically in the 21st century. 112 00:06:20,640 --> 00:06:23,360 I do think it's important for people to understand that 113 00:06:23,440 --> 00:06:25,840 college sports have always been a business. 114 00:06:26,320 --> 00:06:29,680 And it's interesting to me because, you know, so much of 115 00:06:29,680 --> 00:06:33,800 the rhetoric around college sports, often pushed by colleges 116 00:06:33,800 --> 00:06:37,160 and universities themselves, has been around this idea that 117 00:06:37,160 --> 00:06:40,960 somehow college sports, there might be money involved, but 118 00:06:40,960 --> 00:06:42,920 it's not a business like it's education. 119 00:06:43,480 --> 00:06:47,120 And yet these have been run as businesses for decades. 120 00:06:47,160 --> 00:06:50,280 And, you know, I think it's important that we just be real 121 00:06:50,280 --> 00:06:52,600 about what business everybody is in here. 122 00:06:53,200 --> 00:06:57,320 College athletics have a lot of reasons for being a business. 123 00:06:57,320 --> 00:06:59,920 I've gone into many of them on the show over the course of 124 00:06:59,920 --> 00:07:02,960 time. And while there's certainly been 125 00:07:02,960 --> 00:07:05,960 an effort to establish and maintain an educational element, 126 00:07:06,920 --> 00:07:10,520 you know, the universities that engage in college sports are 127 00:07:10,520 --> 00:07:13,960 doing so because they get a lot of knock on benefits in terms of 128 00:07:13,960 --> 00:07:17,920 alumni service, in terms of drumming up donations, in terms 129 00:07:17,920 --> 00:07:20,960 of marketing and advertising of their institutions. 130 00:07:21,560 --> 00:07:24,480 And those are really important things to keep in mind. 131 00:07:24,480 --> 00:07:27,160 And it's something we need to think about as we move forward 132 00:07:27,680 --> 00:07:31,320 is that, you know, as we see this tug of war over the house 133 00:07:31,320 --> 00:07:34,200 settlement over how players are going to get paid. 134 00:07:34,880 --> 00:07:38,680 You know, what we've seen essentially is, you know, for 135 00:07:38,680 --> 00:07:41,400 all of the talk and I and I think this is important to keep 136 00:07:41,400 --> 00:07:44,600 in mind. You know, if you go back 10 137 00:07:44,600 --> 00:07:48,280 years, maybe even less than that, you've got Jim Delaney of 138 00:07:48,280 --> 00:07:52,880 the Big 10, you know, talking about how paying athletes would 139 00:07:52,880 --> 00:07:55,480 be the effective end of college sports or some such quote. 140 00:07:55,480 --> 00:07:59,080 You've got coaches saying, well, if players ever got paid 141 00:07:59,080 --> 00:08:02,600 directly by our schools, I would I would retire. 142 00:08:02,600 --> 00:08:05,440 I would go down to, you know, to or just stop coaching all 143 00:08:05,440 --> 00:08:07,440 together or go down to the Division Three level. 144 00:08:08,080 --> 00:08:11,000 And I'll note that none of those things actually happened. 145 00:08:11,560 --> 00:08:14,960 Everybody's still in the game. You've seen one or two people 146 00:08:15,640 --> 00:08:18,960 exit stage left. Tony Bennett on the basketball 147 00:08:18,960 --> 00:08:21,640 side, haven't really seen any football coaches. 148 00:08:21,920 --> 00:08:25,360 Nick Saban does not count Nick. Nick Saban was kind of at the 149 00:08:25,360 --> 00:08:27,840 end of his effective career life anyway, I think as a football 150 00:08:27,840 --> 00:08:30,560 coach. But all of these proclamations 151 00:08:30,560 --> 00:08:34,240 that we heard throughout the 20 tens about how athletes just 152 00:08:34,240 --> 00:08:37,440 couldn't be paid by by colleges and universities, and that was 153 00:08:37,440 --> 00:08:39,159 just completely contrary to the model. 154 00:08:39,520 --> 00:08:41,760 And yet with this house settlement, we've got schools 155 00:08:41,760 --> 00:08:45,440 now willingly saying, OK, we're going to pay 20 and a half, 156 00:08:45,440 --> 00:08:49,360 $1,000,000 a year to our athletes and we're going to 157 00:08:49,360 --> 00:08:53,040 split it up along revenue lines. It, it, it essentially, as we 158 00:08:53,040 --> 00:08:55,880 said at the time, me and those of us who were were talking 159 00:08:55,880 --> 00:09:00,200 about college athletics paying athletes did not 'cause college 160 00:09:00,200 --> 00:09:02,840 athletics to disappear. In fact, college athletics from 161 00:09:02,840 --> 00:09:06,080 a financial perspective has never been stronger. 162 00:09:06,760 --> 00:09:09,720 And that I think is really kind of a key element because while 163 00:09:09,720 --> 00:09:14,120 college sports has always been a business, the inputs and outputs 164 00:09:14,320 --> 00:09:16,840 from a revenue perspective were limited in scale. 165 00:09:17,920 --> 00:09:21,360 You know, so much of it was basically tied to ticket revenue 166 00:09:21,680 --> 00:09:25,040 and then occasionally media. And so you'd have schools who 167 00:09:25,040 --> 00:09:28,120 would build these huge cathedrals of college basketball 168 00:09:28,240 --> 00:09:31,880 or, or college football. And the ticket revenue largely 169 00:09:31,880 --> 00:09:34,400 dictated how much money they were making. 170 00:09:34,400 --> 00:09:38,280 And, you know, schools like Michigan and Tennessee and Ohio 171 00:09:38,280 --> 00:09:40,800 State and a lot of schools in the South built really big 172 00:09:40,800 --> 00:09:44,320 football stadiums and just made more money than schools like 173 00:09:44,320 --> 00:09:47,480 Indiana and Northwestern, who, you know, didn't have the same 174 00:09:47,480 --> 00:09:50,520 level of support at the football side of things. 175 00:09:51,880 --> 00:09:53,720 And again, why are they doing this? 176 00:09:54,400 --> 00:09:56,520 You know, and this, this to me is one of those things that 177 00:09:56,600 --> 00:10:01,360 carries through still to today. It's this idea that if you're a 178 00:10:01,360 --> 00:10:06,200 college or university, you're in competition with a bunch of 179 00:10:06,200 --> 00:10:09,320 other colleges and universities. Well, what are you in 180 00:10:09,320 --> 00:10:12,240 competition for? You're in competition for 181 00:10:12,720 --> 00:10:14,840 enrollment. You're you're and, and even more 182 00:10:14,840 --> 00:10:18,800 so now you're fighting over getting students, you're trying 183 00:10:18,800 --> 00:10:21,680 to get higher caliber of students or you're just trying 184 00:10:21,680 --> 00:10:23,280 to keep your enrollment at a high level. 185 00:10:23,480 --> 00:10:25,280 Well, how do you mark at a university? 186 00:10:25,960 --> 00:10:27,840 You can mark it through traditional means. 187 00:10:27,840 --> 00:10:30,520 You can, you know, you could have rankings in U.S. news and 188 00:10:30,520 --> 00:10:33,160 World Report. You could take out magazine ads 189 00:10:33,160 --> 00:10:37,480 or television ads as you see on, you know, during college 190 00:10:37,480 --> 00:10:39,920 sporting events, you know, touting your academic 191 00:10:39,920 --> 00:10:42,240 achievements. But realistically, it's the 192 00:10:42,240 --> 00:10:45,600 branding, It's the colors, it's the logos, it's the mascot. 193 00:10:46,360 --> 00:10:51,840 And those are most present and most prevalent nationally during 194 00:10:51,880 --> 00:10:55,040 the NCAA tournament, during bowl games, during the College 195 00:10:55,040 --> 00:10:58,320 Football Playoff, during Saturdays, throughout the course 196 00:10:58,320 --> 00:11:00,920 of the fall. When you've got college football 197 00:11:00,920 --> 00:11:05,320 as the biggest driver of ratings, you know, other than 198 00:11:05,320 --> 00:11:08,280 the NFL that you'll see out there in television. 199 00:11:08,680 --> 00:11:14,000 These are all the things that factor into this idea of it's a 200 00:11:14,000 --> 00:11:16,240 business. And here's why we engage in 201 00:11:16,240 --> 00:11:18,760 college athletics. And here's why we need to keep 202 00:11:18,760 --> 00:11:24,040 this going and why we need to continue to pour in resources 203 00:11:24,040 --> 00:11:26,760 and continue to consolidate revenue and generate more 204 00:11:26,760 --> 00:11:29,160 revenue. So you got all of that as a 205 00:11:29,160 --> 00:11:32,800 baseline, and I think it's important to understand as I go 206 00:11:32,800 --> 00:11:39,160 to this next chart, the value that advertisers find in college 207 00:11:39,160 --> 00:11:40,880 sports. This isn't just colleges and 208 00:11:40,880 --> 00:11:44,840 universities saying, oh, you know, we need to be prominent in 209 00:11:44,840 --> 00:11:47,200 the national landscape, so we're going to have college athletics. 210 00:11:47,400 --> 00:11:50,880 This is also television networks saying, you know what? 211 00:11:51,360 --> 00:11:55,200 Advertisers love buying commercials and buying 212 00:11:55,200 --> 00:11:59,120 sponsorships during college athletics tournaments, whether 213 00:11:59,120 --> 00:12:01,600 that's the College Football Playoff or whether that's March 214 00:12:01,600 --> 00:12:03,600 Madness. Why do they love doing that? 215 00:12:03,600 --> 00:12:07,880 Well, it's because they get an audience that's very valuable to 216 00:12:07,880 --> 00:12:10,920 advertisers. Sports audiences in general are 217 00:12:10,920 --> 00:12:14,560 very valuable to advertisers because they're largely male. 218 00:12:14,720 --> 00:12:18,440 Males tend to buy more things than females do, just from a 219 00:12:18,440 --> 00:12:21,280 consumer perspective. Generally, it's right in the 220 00:12:21,280 --> 00:12:25,600 sweet spot of the demographics. What you want in terms of age, 221 00:12:25,640 --> 00:12:28,840 you're talking about people aged 18 to 49. 222 00:12:29,360 --> 00:12:33,320 That's your prime purchasing demographic for consumer goods 223 00:12:33,320 --> 00:12:36,680 and for a variety of services. You think about the companies 224 00:12:36,680 --> 00:12:40,440 that advertise during sporting events in general, a lot of a 225 00:12:40,440 --> 00:12:43,360 lot of beer companies, a lot of soft drinks, a lot of snack 226 00:12:43,360 --> 00:12:47,800 foods, a lot of airlines. You know, that audience is very 227 00:12:47,800 --> 00:12:51,400 valuable to advertisers and they tend to congregate around 228 00:12:51,960 --> 00:12:54,080 sports. College sports has an even 229 00:12:54,080 --> 00:12:59,640 greater item that goes along with that, which is that much 230 00:12:59,640 --> 00:13:03,640 like as we saw in NASCAR 20 years ago, people who are fans 231 00:13:03,640 --> 00:13:06,840 of teams when they're watching the games tend to get more 232 00:13:06,840 --> 00:13:10,320 highly identified with the advertisers that are advertising 233 00:13:10,320 --> 00:13:12,080 during the games of their favorite teams. 234 00:13:12,760 --> 00:13:16,680 The effect is not as great with say the NFL or the NBA, but it 235 00:13:16,680 --> 00:13:19,640 is pretty sizable with March Madness and with the college 236 00:13:19,640 --> 00:13:21,160 football player. So you look at this chart that 237 00:13:21,160 --> 00:13:24,280 I've got up here and you can see like back in 2018. 238 00:13:24,280 --> 00:13:27,120 So we're talking about, you know, 7-8 years ago at this 239 00:13:27,120 --> 00:13:32,280 point, March Madness was the second largest advertising spend 240 00:13:32,280 --> 00:13:35,560 on a national level for post season sports in the United 241 00:13:35,560 --> 00:13:37,840 States. The NFL was first, you know, 242 00:13:37,840 --> 00:13:41,040 buying, you know, largely buying Super Bowl commercials, but just 243 00:13:41,040 --> 00:13:47,040 buying inventory in general generated about $1.7 billion for 244 00:13:47,040 --> 00:13:49,400 the NFL. But March Madness generated 245 00:13:49,400 --> 00:13:55,400 about $1.3 billion more than the NBA postseason did during that 246 00:13:55,400 --> 00:13:58,040 time period and significantly more than Major League Baseball. 247 00:13:58,040 --> 00:14:00,440 And this was right after the College Football Playoff was 248 00:14:00,440 --> 00:14:03,040 started. Even at that point, it had 249 00:14:03,040 --> 00:14:05,440 grown. That was with three games, you 250 00:14:05,440 --> 00:14:08,840 know, 300 and some $1,000,000. That's grown significantly since 251 00:14:08,840 --> 00:14:13,200 then. All of this really ties into 252 00:14:13,200 --> 00:14:17,880 this idea of growth in college sports in terms of overall 253 00:14:17,880 --> 00:14:19,840 revenues. And there's this fascinating 254 00:14:19,840 --> 00:14:23,640 quote that I found when I was doing research on this, and I'm 255 00:14:23,640 --> 00:14:25,880 just going to read the quote that I've got up on the screen 256 00:14:25,880 --> 00:14:28,240 right now. Football is the main reason top 257 00:14:28,240 --> 00:14:30,880 tier college programs have increased the revenue over 258 00:14:30,880 --> 00:14:34,360 recent decades at a rate that would make blue chip companies 259 00:14:34,360 --> 00:14:36,960 blush. In constant dollars, meaning 260 00:14:37,040 --> 00:14:41,840 adjusted for inflation, you know, So what would a dollar in, 261 00:14:42,200 --> 00:14:47,400 you know the in 1970, if you do the math and, and try to 262 00:14:47,400 --> 00:14:50,640 calculate what a dollar would be here, like maintaining that over 263 00:14:50,640 --> 00:14:54,520 the course of 50 some years, you know, in constant dollars. 264 00:14:54,520 --> 00:14:58,240 The median Division One athletic department revenue in 1970 was 265 00:14:58,240 --> 00:15:02,840 6.5 million. In 2012 it was 56,000,000. 266 00:15:02,960 --> 00:15:06,560 So you're talking about a really significant increase like, you 267 00:15:06,560 --> 00:15:11,920 know, not quite 10 times, but 9 * 9 1/2 * a revenue increase 268 00:15:11,920 --> 00:15:16,440 over what essentially was about a 40 year period. 269 00:15:16,720 --> 00:15:19,280 And that's only continued to grow as we'll see here in a 270 00:15:19,280 --> 00:15:21,880 little bit when we look at overall budgets and revenues in 271 00:15:21,880 --> 00:15:26,840 college sports right now. So you're dealing with a college 272 00:15:26,840 --> 00:15:31,760 athletic system, which if you'll recall was started in the late 273 00:15:32,120 --> 00:15:39,280 19th century, between 1870 and 1900, and then kind of grew into 274 00:15:39,280 --> 00:15:44,360 a form that we recognized as, you know, modern and present day 275 00:15:44,360 --> 00:15:47,680 post World War 2 and, and really in the 1970s was when it 276 00:15:47,680 --> 00:15:51,040 evolved. But the revenues have kept going 277 00:15:51,040 --> 00:15:53,440 up. And so you've got a system that 278 00:15:53,440 --> 00:15:57,080 was devised around amateurism and around, you know, not 279 00:15:57,080 --> 00:16:00,040 compensating athletes and treating athletes as students. 280 00:16:00,360 --> 00:16:04,120 And at the time that that was set up, it made sense because 281 00:16:04,120 --> 00:16:06,120 there wasn't that much money in the mix. 282 00:16:06,120 --> 00:16:08,040 You didn't have coaches making that much money. 283 00:16:08,360 --> 00:16:11,560 A lot of your facilities were, you know, public works projects 284 00:16:11,560 --> 00:16:14,080 or were things that were built very cheaply with very few 285 00:16:14,080 --> 00:16:17,520 amenities. But that's all changed, and the 286 00:16:17,520 --> 00:16:21,200 money has continued to rise. And the fundamental problem that 287 00:16:21,200 --> 00:16:25,120 college sports has been facing for really the last 15 years is 288 00:16:25,120 --> 00:16:27,840 a complete unwillingness to change the system that was 289 00:16:27,840 --> 00:16:31,080 created in the immediate aftermath of World War 2, when 290 00:16:31,080 --> 00:16:33,040 the financial structure was completely different. 291 00:16:33,680 --> 00:16:38,200 So looking at this chart that I I've called up here, you can't 292 00:16:38,200 --> 00:16:40,560 really see it too well. The grids got a little bit 293 00:16:40,560 --> 00:16:42,920 smushed. But if you look at television 294 00:16:42,920 --> 00:16:47,600 revenue from the NCAA college basketball tournament from 1980 295 00:16:47,600 --> 00:16:52,640 to 2013, you can see just this almost exponential increase, you 296 00:16:52,640 --> 00:16:56,560 know, almost a diagonal line that really kicks in and and 297 00:16:56,560 --> 00:17:01,040 gets huge advances around the late 1990s, early 2000s as 298 00:17:01,040 --> 00:17:04,720 revenues continue to climb, coming largely from media 299 00:17:04,720 --> 00:17:06,960 entities. And, and this really I think, is 300 00:17:06,960 --> 00:17:09,240 the key point. Like the starting point in this 301 00:17:09,240 --> 00:17:14,359 chart was at a time when the NCAA Tournament was still on NBC 302 00:17:14,359 --> 00:17:17,240 and NBC, it would carry select games. 303 00:17:17,440 --> 00:17:20,560 They would broadcast it like pretty much any other of their 304 00:17:20,560 --> 00:17:24,359 sports properties. CBS acquires the NCAA tournament 305 00:17:24,880 --> 00:17:27,640 rights in 1982. And of course, famously, the 306 00:17:27,640 --> 00:17:29,960 first year that they had it, that was the year that Michael 307 00:17:29,960 --> 00:17:33,320 Jordan hits the shot to beat Georgetown to win the national 308 00:17:33,320 --> 00:17:37,760 title. CBS and the NCAA partner to 309 00:17:38,000 --> 00:17:41,680 essentially brand this as March Madness, and they build this 310 00:17:41,680 --> 00:17:47,080 entire advertising and audience ecosystem around the NCAA men's 311 00:17:47,080 --> 00:17:49,200 basketball tournament. And it starts to generate 312 00:17:49,200 --> 00:17:53,400 significant revenues better than passed down not just to the 313 00:17:53,400 --> 00:17:56,920 teams in the tournament, but college athletics in general. 314 00:17:57,840 --> 00:18:00,960 What happens during this time period is that colleges, 315 00:18:00,960 --> 00:18:03,960 universities in the NCAA are looking at all this money coming 316 00:18:03,960 --> 00:18:08,120 in and they're saying, you know, wow, we now we have the capacity 317 00:18:08,120 --> 00:18:09,840 to do a bunch of things we haven't done before, but it 318 00:18:09,840 --> 00:18:13,200 requires us to maintain control of those revenues. 319 00:18:13,200 --> 00:18:16,400 So, you know, rather than look at this and say, wow, we're 320 00:18:16,400 --> 00:18:19,120 generating a lot of money, we should make sure that athletes 321 00:18:19,120 --> 00:18:22,040 are taken care of equitably. You have decisions being made in 322 00:18:22,040 --> 00:18:26,000 the 1980s saying, no, we need to keep those, you know, that money 323 00:18:26,000 --> 00:18:29,600 for ourselves. The amateur system suddenly 324 00:18:29,600 --> 00:18:33,960 becomes the most important thing for pretty cynical reasons. 325 00:18:33,960 --> 00:18:36,240 Not oh, this is the best thing for athletes. 326 00:18:36,240 --> 00:18:39,160 It's really there because it's the best thing for schools 327 00:18:39,440 --> 00:18:42,920 because it allows them to essentially reap all the 328 00:18:42,920 --> 00:18:45,520 benefits of this new money coming in from television 329 00:18:45,520 --> 00:18:50,960 partners as the television partners are gradually learning 330 00:18:51,320 --> 00:18:54,360 how valuable the property college sports can be. 331 00:18:55,040 --> 00:18:58,240 You know, this had happened in other areas like the NFL to some 332 00:18:58,240 --> 00:19:02,360 degree already gone through this process a few years earlier as 333 00:19:02,440 --> 00:19:06,840 that became a a place where, you know, television companies 334 00:19:06,840 --> 00:19:09,280 looked at it and said, gosh, people really love the NFL. 335 00:19:09,280 --> 00:19:10,840 They really love these broadcasts. 336 00:19:11,720 --> 00:19:13,960 We can charge more for these. And so that's really where the 337 00:19:13,960 --> 00:19:18,200 cult of, you know, how much Super Bowl ads cost companies to 338 00:19:18,200 --> 00:19:22,320 advertise on. That's where that comes from it. 339 00:19:22,440 --> 00:19:24,600 It's not always been this way. And and this is something I 340 00:19:24,600 --> 00:19:26,680 think we need to keep in mind just with sports in general. 341 00:19:26,680 --> 00:19:30,440 Sports has not always been that popular on television. 342 00:19:31,040 --> 00:19:36,520 Sports was often times relegated to the sidelines, no pun 343 00:19:36,520 --> 00:19:41,840 intended, when it came to the way that television networks 344 00:19:42,560 --> 00:19:44,440 tried to go about their business. 345 00:19:44,640 --> 00:19:47,360 You know, because you would look at sports fans and they were 346 00:19:47,360 --> 00:19:48,680 kind of this odd group of people. 347 00:19:48,680 --> 00:19:52,600 It's just like combination of die hard fans and gamblers. 348 00:19:53,160 --> 00:19:55,920 It wasn't necessarily a group of people that you looked at and 349 00:19:55,920 --> 00:19:58,400 said that's the the primary audience we're looking at. 350 00:19:58,400 --> 00:20:02,280 I mean, famously there were NBA Finals games that were on tape 351 00:20:02,280 --> 00:20:07,120 delay in the early 1980s because, you know, CBS would get 352 00:20:07,120 --> 00:20:10,600 better ratings and therefore better advertising dollars off 353 00:20:10,600 --> 00:20:15,280 of showing Dallas or I forget if Dynasty or Knox Landing was the 354 00:20:15,280 --> 00:20:20,080 other show on Cbsi think it was Knox Landing, but that was a 355 00:20:20,080 --> 00:20:24,000 better option for the networks in the early 80s because they 356 00:20:24,000 --> 00:20:26,680 hadn't really figured out that if you. 357 00:20:27,160 --> 00:20:30,880 Took sports seriously and put it in prime time and, and took care 358 00:20:30,880 --> 00:20:34,320 of it on the weekends and, and put it in good spots. 359 00:20:34,320 --> 00:20:38,040 You could get not just great, you know, ratings numbers, but 360 00:20:38,040 --> 00:20:41,280 you could get a demographic that you weren't getting showing 361 00:20:41,280 --> 00:20:44,880 night time television dramas. And, and so this starts to 362 00:20:44,880 --> 00:20:47,680 happen at the college sports level almost at the same time 363 00:20:47,680 --> 00:20:49,600 that it happens at the professional sports level. 364 00:20:49,880 --> 00:20:53,240 The difference being that at the professional sports level, there 365 00:20:53,240 --> 00:20:55,640 are unions, there are players unions, labor unions who are 366 00:20:55,640 --> 00:20:58,000 looking at this, looking at these revenues increasing and 367 00:20:58,000 --> 00:21:00,760 saying, hey, wait a minute, we deserve some of that money. 368 00:21:01,040 --> 00:21:03,760 There's nobody to speak out for college athletes during this 369 00:21:03,760 --> 00:21:06,680 time period. In fact, not only are college 370 00:21:06,680 --> 00:21:10,360 administrators refusing to speak out in favor of athletes because 371 00:21:10,360 --> 00:21:13,440 they have a vested interest in keeping the money in house, but 372 00:21:13,440 --> 00:21:17,280 media end up being very complicit in painting a picture 373 00:21:17,280 --> 00:21:20,920 of athletes needing to be protected from money. 374 00:21:21,120 --> 00:21:23,360 You know, this was the narrative that happens all throughout the 375 00:21:23,360 --> 00:21:28,360 1980s about, you know, agents being the real evil and, you 376 00:21:28,360 --> 00:21:32,800 know, players being talked into leaving school early and going 377 00:21:32,800 --> 00:21:35,160 pro. If this was the real evil and 378 00:21:35,160 --> 00:21:36,720 things. I mean, the whole plot of Blue 379 00:21:36,720 --> 00:21:40,600 Chips is essentially college athletics used to be pure and 380 00:21:40,600 --> 00:21:42,880 then money came in and destroyed it. 381 00:21:42,880 --> 00:21:45,880 That's, that's the the subtext of the whole movie essentially. 382 00:21:46,200 --> 00:21:52,000 And it's just a fundamentally different type of mentality than 383 00:21:52,000 --> 00:21:54,120 what you get at the professional level where there's an 384 00:21:54,120 --> 00:21:56,720 acknowledgement in some sports, a very begrudging 385 00:21:56,720 --> 00:21:59,560 acknowledgement that, yes, we're going to have to probably share 386 00:21:59,560 --> 00:22:03,600 these revenues in one form or another anyway as we move 387 00:22:03,600 --> 00:22:06,280 forward. If you look at TV revenues in 388 00:22:06,280 --> 00:22:11,960 the Big 10 just over a period from 2013 to 2018, as you can 389 00:22:11,960 --> 00:22:16,600 see up here on the screen again, it is almost a direct diagonal 390 00:22:16,600 --> 00:22:20,480 line, like almost an exponential growth of of television revenues 391 00:22:20,480 --> 00:22:22,080 just coming into the Big 10 conference. 392 00:22:22,080 --> 00:22:24,080 Same thing was happening with the SEC. 393 00:22:25,360 --> 00:22:30,200 So what does all that lead to, You know, in this world where 394 00:22:30,200 --> 00:22:33,440 you've got college administrators and coaches 395 00:22:33,440 --> 00:22:35,640 saying no players shouldn't be paid. 396 00:22:35,640 --> 00:22:37,520 That would destroy the system that we have. 397 00:22:38,440 --> 00:22:40,880 Who is getting paid? Well, it's college coaches 398 00:22:40,880 --> 00:22:42,280 because you got to put the money somewhere. 399 00:22:42,280 --> 00:22:44,640 Because one of the things that I think is fundamentally 400 00:22:44,640 --> 00:22:47,040 misunderstood about college athletics is that college 401 00:22:47,040 --> 00:22:50,120 athletics departments, as I've said on the show before, are not 402 00:22:50,440 --> 00:22:53,120 businesses. They're not profit centers, at 403 00:22:53,120 --> 00:22:55,240 least not yet. They're some of them may become, 404 00:22:55,240 --> 00:22:59,920 that's very soon. So as a result, if you make 50 405 00:22:59,920 --> 00:23:02,640 million extra dollars over the course of a 10 year period of 406 00:23:02,640 --> 00:23:05,000 time, you got to find a way to spend that money because you're 407 00:23:05,000 --> 00:23:06,880 not going to be able to keep it in reserve. 408 00:23:07,160 --> 00:23:08,880 That's not the way that the budget is set up. 409 00:23:08,880 --> 00:23:11,720 So a lot of that money goes into coach's salaries. 410 00:23:11,720 --> 00:23:15,040 You can see this quote. According to research by Charles 411 00:23:15,040 --> 00:23:18,760 Klopfelter and The Economist at Duke, the average compensation 412 00:23:19,320 --> 00:23:22,680 for head coaches at public universities, head football 413 00:23:22,680 --> 00:23:27,400 coaches, which at the time was more than $2,000,000, has grown 414 00:23:27,400 --> 00:23:32,720 750%, adjusted for inflation, since 1984. 415 00:23:33,200 --> 00:23:37,240 That's more than 20 times the cumulative 32% raise for college 416 00:23:37,240 --> 00:23:39,080 professors. So over the same time period, 417 00:23:39,080 --> 00:23:42,640 college coaches salaries went up 750%. 418 00:23:43,280 --> 00:23:47,480 And the average college professor who's theoretically in 419 00:23:47,480 --> 00:23:51,280 the same business, if you take the schools at their word during 420 00:23:51,280 --> 00:23:54,200 this time period that they're engaged in education, the 421 00:23:54,200 --> 00:23:56,800 college professor salaries went up 32%. 422 00:23:57,280 --> 00:24:01,160 That's an illustration of something amiss in the numbers 423 00:24:01,160 --> 00:24:04,480 and something amiss in the, the economic evaluation of what's 424 00:24:04,480 --> 00:24:07,320 going on. And really what it is, is we've 425 00:24:07,320 --> 00:24:10,960 got all of this money, we have to keep it within, you know, 426 00:24:10,960 --> 00:24:14,320 the, the, the non student ranks of college athletics. 427 00:24:14,520 --> 00:24:17,720 What you end up with is coaches getting paid, facilities getting 428 00:24:17,720 --> 00:24:20,160 paid for, assistant coaches getting paid for. 429 00:24:20,600 --> 00:24:22,760 And that's the bubble, essentially that's occurred 430 00:24:23,160 --> 00:24:26,240 within coach contracts over the course of the last 25 years. 431 00:24:26,240 --> 00:24:31,560 That's where it comes from. All of this money is generally 432 00:24:31,760 --> 00:24:36,560 coming from what we would, you know, essentially call media 433 00:24:36,560 --> 00:24:38,880 revenues. And as I mentioned earlier, 434 00:24:38,880 --> 00:24:41,640 college football's the second biggest audience draw in 435 00:24:41,640 --> 00:24:45,160 television right now. In all of television, the NFL is 436 00:24:45,160 --> 00:24:47,640 first. And the NFL ends up, you know, 437 00:24:47,640 --> 00:24:52,520 comprising like 75 or 80 of the 100 most watched television 438 00:24:52,520 --> 00:24:56,280 programs in the entirety of the United States in any given year. 439 00:24:56,600 --> 00:25:00,760 But college football often times occupies the next 10 spots. 440 00:25:00,760 --> 00:25:02,760 And then, you know, sometimes they'll be higher ranked. 441 00:25:03,560 --> 00:25:06,320 You know, college football in general is a tremendous audience 442 00:25:06,320 --> 00:25:09,840 draw and what you get out of that if you're a television 443 00:25:10,600 --> 00:25:14,720 company is you get higher levels of brand search and activation, 444 00:25:14,720 --> 00:25:16,240 which is what I was talking about earlier. 445 00:25:16,400 --> 00:25:18,720 So not only are your advertisers getting a better demographic, 446 00:25:18,720 --> 00:25:20,400 they're getting a more active demographic. 447 00:25:20,880 --> 00:25:23,720 You've also got some different approaches that have been taken 448 00:25:24,040 --> 00:25:27,560 by different conferences about what the best way is to go about 449 00:25:27,760 --> 00:25:30,640 dealing with all of this money and, and how to handle the 450 00:25:30,640 --> 00:25:33,440 television, you know, circumstances that are 451 00:25:33,440 --> 00:25:35,120 generating the revenue in the 1st place. 452 00:25:35,480 --> 00:25:38,600 So one of the things that I think it's important for people 453 00:25:38,600 --> 00:25:43,240 to know about the Big 10 is that back in the mid 2000s, right of 454 00:25:43,240 --> 00:25:50,360 2005, 2006, ESPN goes through this process where they're 455 00:25:50,360 --> 00:25:54,080 trying to get the Big 10 to sign on to essentially become the 456 00:25:54,080 --> 00:25:59,360 house conference, so to speak, for their new channel, for ESP 457 00:25:59,360 --> 00:26:03,680 NS, new channel ESPNU. And they want to use the Big 10 458 00:26:03,680 --> 00:26:07,280 essentially as cover for trying to get a bunch of cable 459 00:26:07,280 --> 00:26:10,160 companies to add ESPNU to their packages. 460 00:26:10,160 --> 00:26:13,280 And the idea is, oh, we'll put all of your games on the ESPNU. 461 00:26:13,520 --> 00:26:16,040 People will be forced to subscribe because they're going 462 00:26:16,040 --> 00:26:19,560 to want to get your games. Big 10 was like, well, that 463 00:26:19,560 --> 00:26:21,880 doesn't seem like a great deal. That almost puts us at a 464 00:26:21,880 --> 00:26:25,480 disadvantage in the marketplace. So the Big 10 ends up going and 465 00:26:25,480 --> 00:26:30,320 partnering with Fox and they craft the Big 10 network. 466 00:26:30,320 --> 00:26:34,200 And the Big 10 network very uniquely is actually part owned 467 00:26:34,200 --> 00:26:36,120 by the schools in the conference. 468 00:26:36,120 --> 00:26:39,640 So, you know, when you see numbers coming out about how 469 00:26:39,640 --> 00:26:42,400 much money the Big 10 is making in media revenue, it's a little 470 00:26:42,400 --> 00:26:45,680 bit of a different calculation because the Big 10 has actually 471 00:26:45,680 --> 00:26:50,680 created something in partnership with Fox where the Big 10 is 472 00:26:51,480 --> 00:26:54,520 part owner of the network rather than just being cut a check. 473 00:26:55,200 --> 00:26:57,040 The SEC went the other direction. 474 00:26:57,040 --> 00:26:59,880 The SEC partners with ESPN and Hearst. 475 00:27:00,480 --> 00:27:03,120 Those are the partners for the parties that own the SEC 476 00:27:03,120 --> 00:27:05,840 Network. And then ESPN cuts them checks 477 00:27:06,200 --> 00:27:08,560 based upon the amount of money that ESPN has made. 478 00:27:08,560 --> 00:27:10,440 And it's a guaranteed number every year. 479 00:27:10,760 --> 00:27:14,800 But what we're starting to see now is that the Big 10s model, 480 00:27:14,800 --> 00:27:17,600 where you combine the Big 10 Network with all of these 481 00:27:17,600 --> 00:27:25,000 national broadcasting groups, Fox, CBSNBC, they're able to 482 00:27:25,000 --> 00:27:28,480 generate more money now on a yearly basis than the SEC is. 483 00:27:28,680 --> 00:27:31,040 This is actually one of the reasons why if you've been 484 00:27:31,040 --> 00:27:35,560 following along with the College Football Playoff debate about 485 00:27:36,080 --> 00:27:38,640 who is supposed to get into the College Football Playoff, 486 00:27:38,640 --> 00:27:40,120 whether there's going to be auto bids. 487 00:27:40,280 --> 00:27:44,920 There's been a lot of arguments back and forth about the SEC 488 00:27:44,920 --> 00:27:48,040 wanting a 5 + 11 model and the Big 10 wanting automatic 489 00:27:48,040 --> 00:27:51,240 qualifiers. A lot of it comes down to the 490 00:27:51,240 --> 00:27:54,160 idea that the SEC only plays 8 conference games, whereas the 491 00:27:54,160 --> 00:27:58,800 Big 10 plays 9, the Big 12 plays 9, the ACC plays nine, and the 492 00:27:58,800 --> 00:28:02,920 Big 10 saying we are not going to agree to a fully at large 493 00:28:02,920 --> 00:28:06,440 focused or largely at large focused College Football Playoff 494 00:28:06,440 --> 00:28:10,560 set up unless the SEC moves to 9 conference games. 495 00:28:11,480 --> 00:28:15,280 But the reason the SEC doesn't move to 9 conference games is 496 00:28:15,280 --> 00:28:18,080 because they want ESPN to pay them more money for that extra 497 00:28:18,080 --> 00:28:20,800 conference game and ESP NS. Like, no, we really don't want 498 00:28:20,800 --> 00:28:22,560 to do that. And technically, according to 499 00:28:22,560 --> 00:28:25,560 the contract, we don't have to. So there will likely be a 500 00:28:25,560 --> 00:28:28,960 negotiation on that front. Or I think we're going to see 501 00:28:28,960 --> 00:28:32,040 some problems in the College Football Playoff because I think 502 00:28:32,080 --> 00:28:36,560 rightfully so, the Big 10 looks at this situation and says we're 503 00:28:36,560 --> 00:28:39,760 not going to put ourselves in a position where we're supposedly 504 00:28:39,760 --> 00:28:44,480 comparing apples to apples on playoff resumes when the SEC is 505 00:28:44,480 --> 00:28:48,280 playing one weaker competition a year or at least one out of 506 00:28:48,280 --> 00:28:51,320 conference competition a year more than the Big 10 is. 507 00:28:51,680 --> 00:28:54,760 So, but all that really goes back to the financial models 508 00:28:54,760 --> 00:28:56,920 that are set up and the way that these things are working. 509 00:28:56,920 --> 00:28:59,720 Like the Big 10, when they added a 9th conference game, they 510 00:28:59,720 --> 00:29:02,800 looked at it and said this is actually good for us because as 511 00:29:02,800 --> 00:29:05,640 part owners of the Big 10 Network, where the bulk of that 512 00:29:05,640 --> 00:29:08,240 inventory would go, we're actually going to make more 513 00:29:08,240 --> 00:29:11,200 money off of that. Whereas the SEC to add a ninth 514 00:29:11,200 --> 00:29:14,640 game would have to go back to ESPN and essentially renegotiate 515 00:29:14,640 --> 00:29:17,720 the deal, something that ESPN is not really that excited about 516 00:29:17,720 --> 00:29:21,080 doing. But one of the things that we're 517 00:29:21,080 --> 00:29:25,000 also seeing in this mix is, as you know, realignment has 518 00:29:25,000 --> 00:29:26,560 occurred. And I, I really should do a 519 00:29:26,560 --> 00:29:28,920 whole podcast where I just talked through the entire 520 00:29:28,920 --> 00:29:31,440 history of realignment because there's some surprising stuff in 521 00:29:31,440 --> 00:29:34,120 there. But obviously we've been paying 522 00:29:34,120 --> 00:29:36,320 attention to what's going on with the ACC. 523 00:29:36,640 --> 00:29:41,200 You know, Florida State sues the ACC to try to get out of the 524 00:29:41,200 --> 00:29:44,480 agreement that was signed between the ACC and ESPN. 525 00:29:44,680 --> 00:29:48,000 Clemson does the same thing. There are arguments through that 526 00:29:48,000 --> 00:29:51,880 whole process where essentially we can't financially compete at 527 00:29:51,880 --> 00:29:55,520 the level that we feel we're at nationally because we are 528 00:29:55,720 --> 00:29:59,680 handcuffed by this deal with ESPN that pays an artificially 529 00:29:59,680 --> 00:30:03,640 low level of money because it was signed with a 20 year term 530 00:30:03,640 --> 00:30:07,240 back in 2016. We feel like, you know, we, 531 00:30:07,240 --> 00:30:08,720 we're going to have to sue to get out of this. 532 00:30:08,720 --> 00:30:12,600 Now, what ended up happening was Florida State and Clemson both 533 00:30:12,600 --> 00:30:16,160 dropped their lawsuits in exchange for differential 534 00:30:16,160 --> 00:30:19,040 payouts, where they're going to get significantly more money 535 00:30:19,200 --> 00:30:23,880 than other schools in the ACC. That'll keep them there in the 536 00:30:23,880 --> 00:30:26,080 short term. Chances are they're still going 537 00:30:26,080 --> 00:30:30,960 to find a way to get out of the ACC around 2030 or 2031 because 538 00:30:30,960 --> 00:30:34,280 that's when the next negotiation of television rights comes in 539 00:30:34,440 --> 00:30:39,360 for the Big 10 in the SEC. And again, a lot of this really 540 00:30:39,360 --> 00:30:44,200 does come down to an idea of these schools are not just right 541 00:30:44,200 --> 00:30:48,360 now fighting for money, they're also fighting for prominence. 542 00:30:48,840 --> 00:30:51,480 And there's a couple of different ways that that is 543 00:30:51,480 --> 00:30:54,960 weighing into this equation when it comes to player compensation 544 00:30:54,960 --> 00:30:58,160 and nil and all of those items. Because you've got schools who 545 00:30:58,160 --> 00:31:01,320 are, on the one hand, trying to control costs and trying to 546 00:31:01,320 --> 00:31:04,320 regulate a market that really doesn't have a legal precedent 547 00:31:04,320 --> 00:31:06,000 for being regulated. And I'm going to talk about that 548 00:31:06,000 --> 00:31:09,240 in a little bit. But then you've also got schools 549 00:31:09,240 --> 00:31:12,960 trying desperately to not get left out in the cold and willing 550 00:31:12,960 --> 00:31:19,160 to take lesser deals in order in some cases to stay at least 551 00:31:19,160 --> 00:31:21,680 somewhat in the limelight. And so, you know, there was a 552 00:31:21,680 --> 00:31:24,800 lot of talk about, oh, we're going to just end up with a 553 00:31:24,800 --> 00:31:27,400 super conference and a bunch of schools are going to get kicked 554 00:31:27,400 --> 00:31:28,440 out. And, you know, we heard a bunch 555 00:31:28,440 --> 00:31:31,840 about like, oh, Indiana's going to get kicked out in favor of, 556 00:31:32,480 --> 00:31:35,000 you know, having a, a smaller conference that's just the Super 557 00:31:35,000 --> 00:31:37,360 teams that's less likely to happen. 558 00:31:38,320 --> 00:31:40,800 You know, and actually, I think Indiana's in much better shape 559 00:31:40,800 --> 00:31:42,680 financially than most people give it credit for. 560 00:31:43,200 --> 00:31:46,000 So they would not be first on the chopping block like Purdue, 561 00:31:46,240 --> 00:31:50,240 Rutgers, Northwestern, they're in much bigger trouble with 562 00:31:50,240 --> 00:31:53,680 these things. But the, the other aspect of 563 00:31:53,680 --> 00:31:57,920 this that I think is worth noting is that there are going 564 00:31:57,920 --> 00:32:00,240 to be some moments as we go through these next sets of 565 00:32:00,240 --> 00:32:03,400 negotiations where the larger brands, as we're, as we've seen 566 00:32:03,400 --> 00:32:07,120 in the ACC, as we saw in the Big 12 with Texas and Oklahoma, 567 00:32:07,640 --> 00:32:11,480 where they're going to say we deserve more money than the 568 00:32:11,520 --> 00:32:15,720 teams in the conference that are not generating the, the revenue, 569 00:32:15,720 --> 00:32:17,200 the ratings, the things like that. 570 00:32:17,200 --> 00:32:19,600 They if you're not bringing in money, you shouldn't be getting 571 00:32:19,600 --> 00:32:23,840 as much money in return. And that could be the biggest 572 00:32:23,840 --> 00:32:26,880 destabilizing force that we see in college athletics in general, 573 00:32:27,840 --> 00:32:30,640 because they're going to be schools who are going to be 574 00:32:30,640 --> 00:32:33,120 willing to take that deal because the alternative will be 575 00:32:33,120 --> 00:32:35,360 getting, you know, removed from your conference. 576 00:32:35,360 --> 00:32:37,440 But there's going to be schools that are kind of in the middle 577 00:32:37,440 --> 00:32:40,800 of things who don't want to be a a second class citizen 578 00:32:40,800 --> 00:32:42,280 financially in their own conference. 579 00:32:42,280 --> 00:32:45,520 And I'm curious to see, you know, how that process goes. 580 00:32:46,400 --> 00:32:50,320 You at this point really can't afford from a marketing 581 00:32:50,320 --> 00:32:52,880 perspective and from a reputational perspective, if 582 00:32:52,880 --> 00:32:55,800 you're a college or university, to be left out of a major 583 00:32:55,800 --> 00:32:59,840 college athletics conference. That's why Stanford and Cal 584 00:33:00,440 --> 00:33:03,880 moved heaven and earth behind the scenes to get admitted to 585 00:33:03,920 --> 00:33:07,320 the ACC. It's why SMU was willing to 586 00:33:07,320 --> 00:33:12,040 forgo media payouts for nine years or whatever the term was 587 00:33:12,200 --> 00:33:15,360 to get into the ACC. You know, it was like, we have 588 00:33:15,360 --> 00:33:18,320 to get on this boat because if we don't, we're going to end up 589 00:33:18,440 --> 00:33:21,120 like what happened with Oregon State and Washington State, who 590 00:33:21,120 --> 00:33:24,880 really did get out of left standing in the game of musical 591 00:33:24,880 --> 00:33:28,320 chairs and now find themselves in a position where they don't 592 00:33:28,320 --> 00:33:31,040 really have a great way of marketing themselves nationally. 593 00:33:31,520 --> 00:33:35,280 Because I mean, realistically, if you, if you lived in Indiana, 594 00:33:35,280 --> 00:33:39,000 if you lived in Tennessee, if you lived in Virginia, like what 595 00:33:39,000 --> 00:33:41,840 occasion would you have other than occasionally throwing on 596 00:33:41,880 --> 00:33:45,320 like a a basketball game or a baseball game to have heard of 597 00:33:45,320 --> 00:33:49,240 or think about Washington State or Oregon State just doesn't 598 00:33:49,240 --> 00:33:51,320 happen that that much. Like there's not a really good 599 00:33:51,320 --> 00:33:54,720 reason for that to resonate. And yet most of these colleges 600 00:33:54,720 --> 00:33:56,840 are competing at least at a regional level, if not a 601 00:33:56,840 --> 00:34:01,280 national level for students, you know, for for all kinds of 602 00:34:01,280 --> 00:34:03,840 different things that they they have to have that that 603 00:34:03,840 --> 00:34:07,360 prominence in order to maintain a position in the national 604 00:34:07,360 --> 00:34:10,080 conversation. Sports is the easiest way to do 605 00:34:10,080 --> 00:34:12,239 that and the probably the most effective. 606 00:34:12,520 --> 00:34:16,480 So anyway, that's going to be something worth keeping an eye 607 00:34:16,480 --> 00:34:20,280 on. And that is how far the industry 608 00:34:20,280 --> 00:34:25,679 of college sports has evolved and changed since just 2000, let 609 00:34:25,679 --> 00:34:29,560 alone 1946 when, you know, we kind of restructured college 610 00:34:29,560 --> 00:34:33,040 athletics into what we currently see now on the player payment 611 00:34:33,040 --> 00:34:35,400 front. I've talked about this before on 612 00:34:35,400 --> 00:34:37,679 the podcast. But I think what we're seeing 613 00:34:37,679 --> 00:34:43,040 right now with essentially major college athletics capitulating 614 00:34:43,239 --> 00:34:47,719 to the courts about paying athletes, you know, this was 615 00:34:47,719 --> 00:34:51,520 something that we talked about for years prior to the NIL 616 00:34:51,520 --> 00:34:56,360 situation unfolding in 2021. And it was this idea that his 617 00:34:56,360 --> 00:34:59,920 revenues continue to rise. Eventually there was going to be 618 00:34:59,920 --> 00:35:04,080 a break point where, you know, athletes and lawyers and 619 00:35:04,080 --> 00:35:07,680 lawmakers, we're going to look at it and say this is not right. 620 00:35:07,680 --> 00:35:12,440 Like this does not pass the the smell test in terms of how you 621 00:35:12,440 --> 00:35:16,080 are claiming the money is going and what is needed for versus 622 00:35:16,080 --> 00:35:18,520 what's actually occurring. Anytime you get this huge growth 623 00:35:18,520 --> 00:35:21,400 in revenue, you start to get people who want the revenue 624 00:35:21,400 --> 00:35:23,760 besides just the people who claim that it's theirs and they 625 00:35:23,760 --> 00:35:26,800 should be able to keep it. And So what I look at within 626 00:35:26,800 --> 00:35:29,760 this context is very similar to what happened with Major League 627 00:35:29,760 --> 00:35:31,960 Baseball in World War, post World War Two. 628 00:35:31,960 --> 00:35:34,120 You have this big expansion of interest in the game. 629 00:35:34,400 --> 00:35:36,520 You get, you know, new markets being opened up. 630 00:35:36,840 --> 00:35:39,480 You get the West Coast suddenly hosting Major League Baseball 631 00:35:39,480 --> 00:35:42,080 teams. You, you've got a real 632 00:35:42,360 --> 00:35:45,840 interesting development just in terms of like the growth of the 633 00:35:45,840 --> 00:35:49,360 game and the growth of interest in the game, not just in person 634 00:35:49,360 --> 00:35:51,760 but also increasingly via television. 635 00:35:53,360 --> 00:35:54,960 Baseball during this time period. 636 00:35:55,080 --> 00:35:58,880 And it and again, baseball by that point had been around 637 00:35:59,000 --> 00:36:01,240 professionally for about 8090 years. 638 00:36:01,680 --> 00:36:03,440 Had this thing called the reserve clause. 639 00:36:03,520 --> 00:36:06,960 And the reserve clause essentially said that if you got 640 00:36:06,960 --> 00:36:10,680 cut by a team, you could go and sign somewhere, but a team had 641 00:36:10,680 --> 00:36:16,120 the right to essentially sign you to one year contracts in 642 00:36:16,120 --> 00:36:18,240 perpetuity, whether you agree to it or not. 643 00:36:18,640 --> 00:36:21,360 They also could trade you without any input. 644 00:36:21,360 --> 00:36:23,080 Like you. There were no no trade clauses. 645 00:36:23,080 --> 00:36:25,880 Like none of that actually ever. None of that existed during this 646 00:36:25,880 --> 00:36:29,480 time period in baseball. And players started to agitate 647 00:36:29,480 --> 00:36:32,560 against that because they're looking at the increasing amount 648 00:36:32,560 --> 00:36:34,560 of revenue that their teams are making. 649 00:36:34,560 --> 00:36:37,120 And they're like, why are we not being paid at a higher level? 650 00:36:37,120 --> 00:36:38,440 And it's because they had no leverage. 651 00:36:39,080 --> 00:36:42,160 So you start to see lawsuits around this idea of players 652 00:36:42,160 --> 00:36:45,280 should have their own, more of their own determination about 653 00:36:45,280 --> 00:36:49,160 where they go and what they do. Curt Flood's lawsuit happens 654 00:36:49,160 --> 00:36:51,560 during this time period. And so this period from like 655 00:36:51,560 --> 00:36:55,720 1968 to 1976, you've got this back and forth. 656 00:36:55,720 --> 00:36:58,000 You've got the court's ruling in favor of Major League Baseball. 657 00:36:58,000 --> 00:37:00,280 And then you've got the courts going back on it and saying, no, 658 00:37:00,280 --> 00:37:04,880 actually what we're seeing here is a violation of, of Labor law 659 00:37:05,200 --> 00:37:08,160 and a violation of, of, you know, what works from a 660 00:37:08,160 --> 00:37:11,760 contractual perspective. And you end up with a situation 661 00:37:11,760 --> 00:37:15,560 where baseball very arrogantly refused to ever sit down at the 662 00:37:15,560 --> 00:37:18,200 negotiating table with players in any meaningful way. 663 00:37:18,800 --> 00:37:22,160 And then the courts essentially forced baseball into 664 00:37:22,520 --> 00:37:26,160 unrestricted free agency. And that caused them to have to 665 00:37:26,160 --> 00:37:28,440 completely redo the rules on the fly. 666 00:37:28,880 --> 00:37:33,920 And that ends up in a situation where by the 1980s, you've got 667 00:37:34,160 --> 00:37:37,160 illegal activities, literally illegal activities happening 668 00:37:37,280 --> 00:37:39,960 with Major League Baseball. You've got collusion. 669 00:37:40,520 --> 00:37:44,040 You know, there was this one summer in the 1980s where Major 670 00:37:44,040 --> 00:37:46,560 League Baseball owners essentially all got together and 671 00:37:46,560 --> 00:37:49,640 said, don't offer money to free agents. 672 00:37:49,880 --> 00:37:53,760 We're going to keep free agent levels low because, you know, 673 00:37:53,760 --> 00:37:56,360 when a player decides they're going to become a free agent, we 674 00:37:56,360 --> 00:37:58,520 don't want them to have anywhere else to sign with and they'll 675 00:37:58,520 --> 00:38:00,760 have to go back and sign with their original team at a deep 676 00:38:00,800 --> 00:38:03,360 discount from what their market value might have been. 677 00:38:03,800 --> 00:38:06,920 This was discovered, went before a federal arbitrator, and the 678 00:38:06,920 --> 00:38:09,000 arbitrator ruled that, yes, Major League Baseball was 679 00:38:09,000 --> 00:38:13,680 colluding to keep salaries down. That process lasted about 15 680 00:38:13,680 --> 00:38:17,760 years and ended up with the system we have now eventually 681 00:38:17,920 --> 00:38:20,440 where, you know, baseball players are pretty well 682 00:38:20,440 --> 00:38:24,440 compensated their their guaranteed contracts. 683 00:38:24,680 --> 00:38:27,120 They get a certain percentage of overall revenues. 684 00:38:27,440 --> 00:38:29,760 And teams are actually incentivized now to spend a 685 00:38:29,760 --> 00:38:34,120 significant amount of money with, you know, a luxury tax 686 00:38:34,120 --> 00:38:36,320 essentially on top of that. But if you're willing to pay the 687 00:38:36,320 --> 00:38:40,400 luxury tax, these are the things that that happened organically 688 00:38:40,400 --> 00:38:43,880 over time. But all of it goes back to Major 689 00:38:43,880 --> 00:38:46,400 League Baseball being in a position where they would refuse 690 00:38:46,400 --> 00:38:49,680 to deal with athletes, and they've ended up losing in court 691 00:38:50,440 --> 00:38:52,200 and have had to scramble. And I think you can make an 692 00:38:52,200 --> 00:38:54,600 argument that, you know, for the longest time, the Major League 693 00:38:54,600 --> 00:38:57,600 Baseball players union was probably the most powerful union 694 00:38:58,120 --> 00:39:02,760 in professional sports because they were able to force the 695 00:39:02,760 --> 00:39:06,400 issue time and time again. And Major League Baseball owners 696 00:39:06,400 --> 00:39:09,400 really weren't on the same page. That's kind of what you could 697 00:39:09,400 --> 00:39:13,520 potentially see with college athletics, with the notable 698 00:39:13,640 --> 00:39:15,720 exception that you're dealing with a much younger group of 699 00:39:15,720 --> 00:39:17,960 athletes here at the collegiate level. 700 00:39:18,080 --> 00:39:21,320 But a lot of the legal issues aren't that terribly different 701 00:39:21,440 --> 00:39:23,280 from what we saw during this time period. 702 00:39:23,280 --> 00:39:26,120 So I think this is a helpful example for most people to 703 00:39:26,120 --> 00:39:28,920 understand. There's value, I think, in 704 00:39:28,920 --> 00:39:32,040 coming to the the bargaining table, working out a reasonable 705 00:39:32,040 --> 00:39:35,800 agreement versus having the courts force an agreement on 706 00:39:35,800 --> 00:39:38,280 you. Because if you're the business 707 00:39:38,280 --> 00:39:41,680 organization, in this case the NCAA or the OR the conferences, 708 00:39:41,680 --> 00:39:46,240 or in the case of Major League Baseball, MLB itself, when 709 00:39:46,240 --> 00:39:49,080 something's imposed upon you, the terms of the deal are almost 710 00:39:49,080 --> 00:39:51,400 never as good as when you are able to sit down with the 711 00:39:51,680 --> 00:39:53,800 parties that you're supposed to be dealing with and come up with 712 00:39:53,800 --> 00:39:58,200 something worthwhile. A lot of this then goes down to 713 00:39:58,200 --> 00:40:00,400 college athletics budgets and where they're at right now. 714 00:40:00,400 --> 00:40:03,120 So I wanted to show you a couple of slides here. 715 00:40:04,760 --> 00:40:07,880 The growth of revenue within college athletics has been 716 00:40:07,880 --> 00:40:10,880 pretty intense over the course of just the last five or six 717 00:40:10,920 --> 00:40:12,760 years. So if you go back to 2019. 718 00:40:13,120 --> 00:40:15,640 And you look at the amount of money in college athletics 719 00:40:15,640 --> 00:40:19,520 budgets, Ohio State at the time had the biggest athletic budget 720 00:40:19,880 --> 00:40:24,320 in the country, 220.6 million. Texas was second at 204. 721 00:40:24,480 --> 00:40:26,720 Those are the only two schools that it eclipsed the $200 722 00:40:26,720 --> 00:40:31,160 million mark in revenues. Michigan was third at 190.9, 723 00:40:31,400 --> 00:40:34,880 Alabama with $185 million budget, and then Texas Tech at 724 00:40:34,880 --> 00:40:39,960 169 in 2023. Just four years later, Ohio 725 00:40:39,960 --> 00:40:43,040 State goes up by over 25,000,000. 726 00:40:43,040 --> 00:40:46,760 They're at 251.6. Texas is at 239.2 million, 727 00:40:47,160 --> 00:40:52,920 Alabama's at 2.214, point 3, Michigan's at 210.6, Georgia's 728 00:40:52,920 --> 00:40:57,560 at 203. Since then, we've seen even 729 00:40:57,560 --> 00:40:59,680 greater growth. I mean, there was a story that I 730 00:40:59,680 --> 00:41:04,720 was reading the other day that Tennessee who back in 2023, if 731 00:41:04,720 --> 00:41:09,160 you go back and look at the numbers, Tennessee was 18th in 732 00:41:09,160 --> 00:41:12,480 the country with athletics revenues of 154,000,000. 733 00:41:12,880 --> 00:41:18,040 Tennessee just reported that for fiscal year 2024, Tennessee 734 00:41:18,040 --> 00:41:24,640 athletics had $234 million in total operating revenue and that 735 00:41:24,640 --> 00:41:29,200 was a $32 million increase over what they had reported the 736 00:41:29,200 --> 00:41:33,520 previous fiscal year. So this is, you've seen just an 737 00:41:33,520 --> 00:41:36,440 immense amount of growth and most of it is coming through 738 00:41:36,440 --> 00:41:39,640 media deals. And you're starting to see a lot 739 00:41:39,640 --> 00:41:41,880 of these athletic departments just kind of fully 740 00:41:41,880 --> 00:41:44,960 professionalized what they're doing and how they're doing it. 741 00:41:45,320 --> 00:41:48,800 And also going to their institutions and saying we need 742 00:41:48,800 --> 00:41:53,240 to get some additional money to do what you need us to do to 743 00:41:53,440 --> 00:41:57,320 market the university, to service alumni, to generate 744 00:41:57,320 --> 00:42:01,000 donations, so on and so forth. So all of this is happening 745 00:42:01,000 --> 00:42:04,800 simultaneously with now the requirement in the house 746 00:42:04,800 --> 00:42:07,240 settlement that you need to come up with essentially 20 and a 747 00:42:07,240 --> 00:42:10,440 half, $1,000,000 to pay athletes if you're going to compete at 748 00:42:10,440 --> 00:42:15,440 the revenue share level. So in addition to needing more 749 00:42:15,440 --> 00:42:18,960 money for coaches, needing more money for facilities, you now 750 00:42:18,960 --> 00:42:21,600 need money to pay athletes. And that's where a lot of these 751 00:42:21,600 --> 00:42:23,920 advances in revenue are going directly to. 752 00:42:24,120 --> 00:42:27,920 And even with that $20 million extra is a lot of money. 753 00:42:28,160 --> 00:42:31,520 I mean, that's 10% in some cases of just the top budgets. 754 00:42:31,520 --> 00:42:35,480 And when you get down to even even like, you know, if you go 755 00:42:35,480 --> 00:42:38,880 back to the 2023 numbers, I'm actually going to stop sharing 756 00:42:38,880 --> 00:42:43,920 this and, and share these revenues and expenditures. 757 00:42:43,920 --> 00:42:45,000 Let's see if I can get this up here. 758 00:42:45,000 --> 00:42:48,160 There we go. So if you look at this was this, 759 00:42:48,480 --> 00:42:51,960 this report was from 2024, but it's actually the 2023 budget 760 00:42:51,960 --> 00:42:53,720 numbers. You know, if you look at the 761 00:42:53,720 --> 00:42:57,960 numbers that you're dealing with right now, if you get down to 762 00:42:58,000 --> 00:43:01,360 say the 20th ranked teams, you're talking about, like 763 00:43:01,360 --> 00:43:04,880 Wisconsin's a great example, $150 million athletics revenues. 764 00:43:05,480 --> 00:43:09,880 If you have to suddenly pay 20 and a half million dollars, I 765 00:43:09,880 --> 00:43:14,800 mean, that's, that is what 15% of that revenue structure you 766 00:43:14,800 --> 00:43:17,320 have to come up with again, or you have to cut a bunch of 767 00:43:17,320 --> 00:43:20,920 things underneath the surface that like, I don't think people 768 00:43:20,920 --> 00:43:22,720 understand the math involved here. 769 00:43:22,720 --> 00:43:25,920 But you don't just generate 20 million extra dollars out of 770 00:43:25,920 --> 00:43:27,440 thin air. It's got to come from somewhere. 771 00:43:27,720 --> 00:43:33,080 And a lot of it is coming from a gradual pullback in certain 772 00:43:33,080 --> 00:43:36,080 areas that college athletics has kind of prided itself on up to 773 00:43:36,080 --> 00:43:40,160 this point. If you look at where the money's 774 00:43:40,160 --> 00:43:46,840 going right now, if you go back to 2005, the a, a plurality, a 775 00:43:46,840 --> 00:43:50,400 very small plurality of the money was going to athletic 776 00:43:50,400 --> 00:43:55,480 scholarships. So about $736 million of college 777 00:43:55,480 --> 00:43:59,760 sports money was going to scholarships, followed by 778 00:43:59,760 --> 00:44:02,440 coach's compensation, which was about at the same number. 779 00:44:02,440 --> 00:44:05,600 And then administration and support staff compensation was 780 00:44:05,600 --> 00:44:08,240 in 3rd. By the time we get to fiscal 781 00:44:08,240 --> 00:44:14,480 year 2018, coach compensation had shot up to $1.9 billion per 782 00:44:14,480 --> 00:44:16,920 year. Athletic scholarships have 783 00:44:16,920 --> 00:44:20,000 dropped below administration and support staff. 784 00:44:21,200 --> 00:44:23,160 So you're dealing with the situation where yes, you're 785 00:44:23,160 --> 00:44:27,640 still spending a lot of money on athletic scholarships, but 786 00:44:27,640 --> 00:44:31,000 you're spending a significant amount of money more on coaches 787 00:44:31,000 --> 00:44:34,840 and the administrative structure that you need to run this multi 788 00:44:34,840 --> 00:44:38,600 billion dollar business. I'm going to stop here for a 789 00:44:38,600 --> 00:44:41,600 second and and a couple other things I wanted to note before I 790 00:44:41,600 --> 00:44:46,160 dive into the last part of this. It's important to understand 791 00:44:46,160 --> 00:44:51,360 that college athletics has always rested on this idea that 792 00:44:51,360 --> 00:44:55,040 there are rules, But most of the schools that are competing at 793 00:44:55,040 --> 00:44:58,000 the highest levels are not paying attention to the rules, 794 00:44:58,440 --> 00:45:02,200 knowing that there's not going to be a huge penalty delved out 795 00:45:02,200 --> 00:45:05,720 to them in most cases. And that ultimately, if you know 796 00:45:05,720 --> 00:45:09,200 what you're doing, it's very hard to police violators of the 797 00:45:09,200 --> 00:45:12,120 rules. And this is where, you know, I 798 00:45:12,120 --> 00:45:14,920 think it's easy to, you know, and I've done this myself on the 799 00:45:14,920 --> 00:45:19,760 show before, get very frustrated with coaches and, you know, 800 00:45:19,760 --> 00:45:23,680 reporters who are acting as the the mouthpieces of coaches 801 00:45:23,680 --> 00:45:26,560 complaining about all the rule breaking and all the tampering 802 00:45:26,560 --> 00:45:28,360 and all this and that. And then no names are actually 803 00:45:28,360 --> 00:45:30,480 named. And, and it's, it's a very 804 00:45:30,480 --> 00:45:33,560 frustrating system for fans. It's a very frustrating system 805 00:45:33,560 --> 00:45:38,280 for outside observers because it's clear that people want to 806 00:45:38,280 --> 00:45:41,360 complain and make excuses for when they're not winning because 807 00:45:41,520 --> 00:45:44,840 other teams are cheating. But there's never any real 808 00:45:44,840 --> 00:45:48,360 effort by the system or by the schools to do anything about the 809 00:45:48,360 --> 00:45:51,200 cheating or to codify a system where the cheating would be 810 00:45:51,200 --> 00:45:53,840 faced with like real, actual penalties. 811 00:45:54,560 --> 00:45:57,200 And So what that ends up doing is creating, you know, 812 00:45:57,200 --> 00:46:01,800 historically in college sports, an underground marketplace where 813 00:46:01,920 --> 00:46:04,800 there's money being paid out to athletes and everybody knows it. 814 00:46:04,800 --> 00:46:07,280 If, I mean, anybody that's around college athletics knows 815 00:46:07,280 --> 00:46:10,240 that that's taking place. You know, and one of the things 816 00:46:10,240 --> 00:46:13,720 that's been brought up here recently, for all the talk about 817 00:46:13,720 --> 00:46:18,200 how a playoff would destroy competitive balance, again, 818 00:46:18,400 --> 00:46:20,160 false. But that was the argument for 819 00:46:20,160 --> 00:46:23,240 many years that you can't have a College Football Playoff because 820 00:46:23,240 --> 00:46:25,560 that will that'll hurt competitive balance. 821 00:46:25,560 --> 00:46:28,280 And, and this and that you can't pay athletes because that'll 822 00:46:28,280 --> 00:46:32,000 hurt competitive balance. When the shackles came off of 823 00:46:32,120 --> 00:46:35,040 the NIL payment structure and teams could suddenly start 824 00:46:35,040 --> 00:46:39,480 paying players their market value, suddenly you started 825 00:46:39,480 --> 00:46:44,000 seeing a lot of teams competing at high levels that were not 826 00:46:44,000 --> 00:46:45,720 competing at those levels before. 827 00:46:46,160 --> 00:46:49,120 You know, and in football, I think it's been a very 828 00:46:49,120 --> 00:46:51,560 interesting thing to watch because the hegemony that the 829 00:46:51,600 --> 00:46:56,440 SEC has had for years in college football, you know, the, the 830 00:46:56,440 --> 00:46:59,240 marketing was like, oh, it just means more, which is crap. 831 00:47:00,120 --> 00:47:03,800 That's that's, that's a ridiculous cover story for the 832 00:47:03,800 --> 00:47:08,080 reality that, you know, schools in the SEC are generally willing 833 00:47:08,080 --> 00:47:12,400 to pay a lot of money to get the best players to play for them. 834 00:47:12,920 --> 00:47:16,200 And it wasn't just the SEC. Ohio State's thrived on this 835 00:47:16,200 --> 00:47:18,160 very thing. Michigan's thrived on this very 836 00:47:18,160 --> 00:47:21,280 thing. There, there was a essentially a 837 00:47:21,280 --> 00:47:24,080 hegemony of schools that had figured out the system, knew I 838 00:47:24,080 --> 00:47:29,600 was going to go and those schools jealously guard that 839 00:47:30,360 --> 00:47:33,400 particular set up because they don't want anybody else 840 00:47:33,440 --> 00:47:35,680 threatening their access to talent. 841 00:47:36,000 --> 00:47:39,200 It's why when you see like Ole Miss going in and signing 842 00:47:39,200 --> 00:47:41,880 players immediately, you're starting to see stories about, 843 00:47:41,880 --> 00:47:44,880 oh, this guy got paid this amount of money by this school 844 00:47:44,880 --> 00:47:47,600 or this booster. There's a it's, it's almost like 845 00:47:47,600 --> 00:47:52,280 an allergen gets into the system if the money is threatened by an 846 00:47:52,280 --> 00:47:55,920 outsider trying to come in. It's why to some degree there 847 00:47:55,920 --> 00:47:57,960 was such a backlash against Indiana football. 848 00:47:58,200 --> 00:48:01,720 Indiana football finally starts paying, you know, being able to 849 00:48:01,720 --> 00:48:05,840 pay players, being able to, you know, to, to devote resources to 850 00:48:05,840 --> 00:48:09,960 coaching and whatnot. And no one in the old guard 851 00:48:09,960 --> 00:48:12,040 wants to see Indiana football in the mix. 852 00:48:13,120 --> 00:48:15,400 That's the kind of thing that's going to be interesting to watch 853 00:48:15,400 --> 00:48:18,120 as we move forward with all of this because it's not just about 854 00:48:18,120 --> 00:48:22,840 finding money to pay athletes, but it's also about a power 855 00:48:22,840 --> 00:48:27,400 struggle in college athletics where you've got this built in 856 00:48:27,400 --> 00:48:31,680 hegemony of of schools that does not want to let other schools 857 00:48:31,680 --> 00:48:33,920 have access to the competitive aspects of things. 858 00:48:34,160 --> 00:48:36,120 And it's really one of the primary differences between 859 00:48:36,120 --> 00:48:40,000 professional sports and college sports where at the professional 860 00:48:40,000 --> 00:48:42,880 level, you know, you have varying levels of this. 861 00:48:42,880 --> 00:48:45,000 You have small market teams and big market teams. 862 00:48:45,000 --> 00:48:48,480 But the, the, the sports that are thriving the most right now, 863 00:48:48,680 --> 00:48:53,400 the NBA, the NFL, like they have a system where it can be 864 00:48:53,400 --> 00:48:55,360 equitable enough. And you see this in the NBA 865 00:48:55,360 --> 00:49:00,320 Finals this year where you have two small market teams who used 866 00:49:00,320 --> 00:49:03,520 different methodologies to take advantage of the current rule 867 00:49:03,520 --> 00:49:07,280 set, were very smart with their money and are in the NBA Finals 868 00:49:07,920 --> 00:49:11,480 in the NFL. You know, it's how smart can you 869 00:49:11,480 --> 00:49:14,480 be with the salary cap? Yes, you've got some big market 870 00:49:14,480 --> 00:49:16,800 teams that are playing, but you've also got smaller market 871 00:49:16,800 --> 00:49:19,680 teams that have won Super Bowls or gone to Super Bowls because 872 00:49:19,680 --> 00:49:21,400 everybody's essentially in the same business there. 873 00:49:21,400 --> 00:49:24,160 And there's an acknowledgement that they're growing overall 874 00:49:24,160 --> 00:49:26,680 revenues and that the competition aspects are more 875 00:49:26,680 --> 00:49:31,280 about how good am I at doing XY and Z under the rules of 876 00:49:31,280 --> 00:49:32,920 collective bargaining in the salary cap. 877 00:49:32,960 --> 00:49:35,520 That's not really how colleges and universities think about it. 878 00:49:36,600 --> 00:49:38,600 You know, everybody wants to market their schools. 879 00:49:38,840 --> 00:49:41,760 Everybody wants to put themselves in a position where 880 00:49:41,760 --> 00:49:45,920 they are, you know, getting thought of as a place for, you 881 00:49:45,920 --> 00:49:49,120 know, a high schooler to go and attend college. 882 00:49:49,360 --> 00:49:51,440 Everybody wants to get their alumni satisfied. 883 00:49:51,680 --> 00:49:55,280 But there are also schools for whom winning at college sports 884 00:49:55,640 --> 00:49:58,360 is very important from a cultural perspective, from a 885 00:49:58,360 --> 00:50:01,880 pride perspective. And in many cases, it covers up 886 00:50:01,920 --> 00:50:05,080 a lack of other accomplishments that that institution might 887 00:50:05,080 --> 00:50:08,720 have. You know, a lot of what we see 888 00:50:08,720 --> 00:50:12,120 in the SEC like there is a civic pride, but there's also the the 889 00:50:12,120 --> 00:50:14,600 idea that a lot of the SEC schools are not great academic 890 00:50:14,600 --> 00:50:18,920 institutions just by rankings. So how do you attract students 891 00:50:18,960 --> 00:50:20,400 otherwise? Well, you attract them by 892 00:50:20,680 --> 00:50:23,480 saying, hey, we win at football. We win increasingly now at 893 00:50:23,480 --> 00:50:25,560 basketball. And whether or not you want to 894 00:50:25,560 --> 00:50:29,200 acknowledge that those things should or shouldn't matter in 895 00:50:29,200 --> 00:50:32,640 college choice, the reality is they do, you know, students want 896 00:50:32,640 --> 00:50:36,320 to go someplace where it's fun. And college sports is about the 897 00:50:36,320 --> 00:50:40,880 most fun thing that you can think of for a large number of 898 00:50:40,880 --> 00:50:42,000 people that are going to college. 899 00:50:42,000 --> 00:50:44,280 Not everybody, but a large number of people. 900 00:50:44,600 --> 00:50:48,320 So that is the kind of thing that you have to factor into all 901 00:50:48,320 --> 00:50:49,520 of this. And I think it's important to 902 00:50:49,520 --> 00:50:54,360 keep in mind that the amount of money that you're generating and 903 00:50:54,360 --> 00:50:58,360 the amount of money that you bring in is increasingly A proxy 904 00:50:58,360 --> 00:51:01,200 for how important or not you are within the college sports 905 00:51:01,200 --> 00:51:02,520 landscape. I want to go back to those 906 00:51:02,520 --> 00:51:06,160 revenue numbers again because I think it's really interesting 907 00:51:06,480 --> 00:51:08,880 looking at, let me get this up here. 908 00:51:08,880 --> 00:51:13,480 There we go. Sorry, we need to let me remove 909 00:51:13,480 --> 00:51:14,680 this for a second. There we go. 910 00:51:16,440 --> 00:51:18,880 If you go back a couple of years ago and you look at the revenue 911 00:51:19,200 --> 00:51:21,680 processes, you know what's interesting is you go down the 912 00:51:21,680 --> 00:51:24,840 list of who's generating the most revenue, the top ten 913 00:51:24,840 --> 00:51:29,720 schools in 2023, Ohio State, Texas, Alabama, Michigan, 914 00:51:29,720 --> 00:51:31,720 Georgia, no surprises there, right? 915 00:51:31,720 --> 00:51:35,280 LSU, Texas A&M, Florida, Penn State, Oklahoma, no surprises 916 00:51:35,280 --> 00:51:38,200 there. You get down into that next 10 917 00:51:38,720 --> 00:51:41,200 and it's a little surprising, at least to my eye. 918 00:51:41,200 --> 00:51:44,560 You got Auburn, not a surprise. Michigan State and Indiana, 919 00:51:44,640 --> 00:51:47,520 surprise. It is a bit of a surprise that 920 00:51:47,520 --> 00:51:51,280 both of those schools are there, but that's a byproduct of A, 921 00:51:51,280 --> 00:51:56,120 being in the Big 10 and B, in Indiana's case, having a, a 922 00:51:56,640 --> 00:51:59,640 nationwide network of people who are very interested in watching 923 00:51:59,640 --> 00:52:03,160 IU athletics. You know, the Virginia, a bit of 924 00:52:03,160 --> 00:52:07,800 a surprise, but some of that with Virginia and Florida State 925 00:52:07,960 --> 00:52:10,600 is a little bit misleading because there's a lot of 926 00:52:10,880 --> 00:52:14,560 university appropriations coming in to help with their budgets 927 00:52:14,560 --> 00:52:16,000 and their overall revenue streams. 928 00:52:16,160 --> 00:52:21,360 Kentucky, Clemson, Tennessee, Oregon, Arkansas, and then Iowa 929 00:52:21,360 --> 00:52:25,240 in 21st. You know, so what's interesting 930 00:52:25,240 --> 00:52:28,080 is like a Nebraska or a Washington who you would expect 931 00:52:28,080 --> 00:52:30,760 to maybe be a bit higher. They're a bit further down the 932 00:52:30,760 --> 00:52:32,240 list. And as you continue to go down 933 00:52:32,240 --> 00:52:35,640 the list, like North Carolina, a school that really feels like it 934 00:52:35,640 --> 00:52:38,240 should be very prominent is actually in the 30s. 935 00:52:38,600 --> 00:52:43,440 So the the reason I bring all of that up is if you're an Indiana 936 00:52:43,440 --> 00:52:47,560 fan looking at the landscape, I think to some degree Indiana's 937 00:52:47,560 --> 00:52:52,160 lack of success in football have made it look like a weak school 938 00:52:52,160 --> 00:52:55,000 from a revenue perspective and a school that doesn't have a lot 939 00:52:55,000 --> 00:52:58,240 of pull nationally. And yet the actual revenue 940 00:52:58,240 --> 00:53:00,600 numbers paint a different picture all together. 941 00:53:00,840 --> 00:53:04,520 Indiana's got a ton of money, Indiana's got a ton of of, of 942 00:53:04,520 --> 00:53:08,120 resources available to it. It is just kind of now for the 943 00:53:08,120 --> 00:53:12,880 first time maybe ever, truly taking football seriously. 944 00:53:13,120 --> 00:53:16,600 And a lot of the things that you're seeing at IU are a 945 00:53:16,640 --> 00:53:21,320 restructuring of the culture of the business of IU athletics 946 00:53:21,600 --> 00:53:24,680 around that reality. And you see the dividends. 947 00:53:24,680 --> 00:53:27,040 I mean, we know we as much as that first year with Kurt 948 00:53:27,040 --> 00:53:30,560 Zignetti and the staff were was amazing. 949 00:53:30,800 --> 00:53:35,320 You're seeing recruiting payouts above and beyond what we're 950 00:53:35,320 --> 00:53:38,560 very, you know, what we're used to seeing with IU athletics in 951 00:53:38,560 --> 00:53:40,760 football. And a lot of that is just simply 952 00:53:40,760 --> 00:53:45,360 the shift in mentality that they went through first with, you 953 00:53:45,360 --> 00:53:48,280 know, the the way that they handled the Tom Allen contracts 954 00:53:48,280 --> 00:53:51,440 after they went to the Gator Bowl and after the 2020 year. 955 00:53:51,920 --> 00:53:55,720 But continuing that on, not just shrinking into the background 956 00:53:55,720 --> 00:54:00,160 once the Allen experiment failed, you know, in 2023 like 957 00:54:00,160 --> 00:54:02,480 that, that's a really big difference. 958 00:54:02,480 --> 00:54:04,960 And and it's important that Indiana's doing this at this 959 00:54:04,960 --> 00:54:06,840 time. I think you could make an 960 00:54:06,840 --> 00:54:09,640 argument that Indiana elevating itself into the upper echelons 961 00:54:09,640 --> 00:54:13,240 revenue wise of college sports came like at just the right 962 00:54:13,240 --> 00:54:15,520 moment. Because you can look at other 963 00:54:15,520 --> 00:54:19,120 schools and you know, like Purdue's a great example. 964 00:54:19,520 --> 00:54:25,280 In 2023, Purdue's revenues in athletics were $115 million, 965 00:54:25,280 --> 00:54:30,360 Indiana's were $166 million. And if you go to what the report 966 00:54:30,360 --> 00:54:38,240 was for 2024, Indiana's revenue in 2024 was 173.5 million in 967 00:54:38,240 --> 00:54:41,480 athletics revenues. You know, and that included a 968 00:54:41,480 --> 00:54:44,600 $3,000,000 increase in meteorites, a $4 million 969 00:54:44,600 --> 00:54:48,640 increase in donor contributions. There was direct institutional 970 00:54:48,640 --> 00:54:50,000 support. Certainly that was pretty 971 00:54:50,000 --> 00:54:52,000 sizable. But that's kind of the norm, as 972 00:54:52,000 --> 00:54:53,880 we're seeing now in a lot of college athletics. 973 00:54:53,880 --> 00:54:58,440 So there's an acknowledgement here, even if you aren't reading 974 00:54:58,440 --> 00:55:00,040 about it much or aren't noticing it. 975 00:55:00,840 --> 00:55:04,080 IU has looked at this landscape and said like, this is 976 00:55:04,080 --> 00:55:06,400 essentially A proxy war around revenue. 977 00:55:06,520 --> 00:55:10,320 We can't afford to not be engaging in that war because 978 00:55:10,320 --> 00:55:12,400 we're going to end up on the outside looking in and and 979 00:55:12,400 --> 00:55:13,920 that's not something that anybody's looking for. 980 00:55:13,920 --> 00:55:18,080 If you look at what Indiana's, you know, overall setup looks 981 00:55:18,080 --> 00:55:20,120 like. Let me, I'm going to, I wanted 982 00:55:20,120 --> 00:55:23,040 to just kind of show you how much this has changed over time. 983 00:55:23,040 --> 00:55:26,160 Let me let me remove that and share something else because I 984 00:55:26,160 --> 00:55:29,880 think this is again important for people to get a, a sense of, 985 00:55:30,160 --> 00:55:32,640 you know, how exactly this is gone. 986 00:55:32,640 --> 00:55:35,560 All right, let me present here. Let me go to this. 987 00:55:35,880 --> 00:55:38,120 So if you look at Indiana's revenues and and how they've 988 00:55:38,120 --> 00:55:41,480 changed over time and their expenses, if you go all the way 989 00:55:41,480 --> 00:55:47,000 back to 2004, IU Athletics was bringing in $37 million, thirty, 990 00:55:47,160 --> 00:55:53,080 almost $38 million. And you know, that was 8.3 991 00:55:53,080 --> 00:55:57,400 million, 8.4 million in ticket sales, about 8.1 million in 992 00:55:57,400 --> 00:56:02,240 contributions and then about 18 million in media rights and 993 00:56:02,240 --> 00:56:05,000 other rights and licensing. And then at that time there was 994 00:56:05,000 --> 00:56:07,320 still a student fee that IU Athletics was making. 995 00:56:08,320 --> 00:56:12,040 If you look at where Indiana's gone since then, you know, they 996 00:56:12,040 --> 00:56:16,680 had a gradual climb and then a big jump between 2016 and 2017 997 00:56:16,680 --> 00:56:19,680 where they got up into the 120, two $123 million range in 998 00:56:19,680 --> 00:56:23,040 revenue all the way up to the present day where it's now at 999 00:56:23,040 --> 00:56:26,600 the 173,000,000 range. What is Indiana spending money 1000 00:56:26,600 --> 00:56:30,880 on? You know, total expenses have 1001 00:56:31,200 --> 00:56:35,000 been relatively, you know, around 132 million. 1002 00:56:35,440 --> 00:56:37,760 And this is not a complete accounting of everything, 1003 00:56:37,760 --> 00:56:40,120 obviously, because there's a large category here that says 1004 00:56:40,120 --> 00:56:42,560 other, but coaching staff salaries. 1005 00:56:42,680 --> 00:56:47,120 Now Indiana's paying about 4647 million in that, paying about 1006 00:56:47,120 --> 00:56:51,800 17.4 million in scholarships and then paying about $28 million in 1007 00:56:51,800 --> 00:56:55,000 facilities and overhead. I, I just find all of this 1008 00:56:55,000 --> 00:56:58,840 fascinating because if you, you know, you look at a school like 1009 00:56:58,840 --> 00:57:02,960 Michigan and what you find is a similar pattern where, you know, 1010 00:57:02,960 --> 00:57:08,400 back in 2004, Michigan was at about $78,000,000 in revenue. 1011 00:57:08,400 --> 00:57:10,440 So about double what Indiana was. 1012 00:57:10,440 --> 00:57:14,360 Michigan's now at 210 million. That's a flattening of the 1013 00:57:14,360 --> 00:57:16,280 curve. Instead of Michigan making 1014 00:57:16,280 --> 00:57:20,280 double the revenue that Indiana is making, Michigan's only 1015 00:57:20,280 --> 00:57:24,840 making about what, 3540%? I'm doing math off the top of my 1016 00:57:24,840 --> 00:57:28,240 head here, but it's not an overwhelming difference between 1017 00:57:28,240 --> 00:57:31,560 Indiana and the top of the Big 10, whereas it certainly was 20 1018 00:57:31,560 --> 00:57:33,520 years ago. So these are all things I think 1019 00:57:33,520 --> 00:57:36,520 that are important to remember and keep in mind as we go 1020 00:57:36,520 --> 00:57:41,240 through all of this. So anyway, the last thing I 1021 00:57:41,240 --> 00:57:43,800 wanted to talk about was basketball revenues and and 1022 00:57:43,800 --> 00:57:49,680 again, people get the wrong idea sometimes about basketball here 1023 00:57:49,680 --> 00:57:52,240 in Indiana because it's such a popular sport. 1024 00:57:52,520 --> 00:57:55,560 Indiana does make a significant amount of revenue compared to 1025 00:57:55,640 --> 00:57:59,640 other schools for basketball, but realistically speaking, the 1026 00:57:59,640 --> 00:58:03,360 amount of money being made off of basketball is just nowhere 1027 00:58:03,360 --> 00:58:07,400 close to the amount being made on college football on a week by 1028 00:58:07,400 --> 00:58:10,520 week basis. And if you look at the NCAA 1029 00:58:10,800 --> 00:58:16,240 basketball tournaments in 2019, the men's tournament made $917 1030 00:58:16,240 --> 00:58:19,160 million in revenue. The women's tournament made $15 1031 00:58:19,160 --> 00:58:23,000 million in revenue. Flash forward five years, you've 1032 00:58:23,000 --> 00:58:26,040 had about a $40 million increase in the men's tournament in 1033 00:58:26,040 --> 00:58:28,080 revenue. You've had a significant 1034 00:58:28,080 --> 00:58:31,200 increase, about a little over almost a four fold increase in 1035 00:58:31,200 --> 00:58:32,880 the women's tournament. So you're starting to see some 1036 00:58:32,880 --> 00:58:37,040 growth in terms of women's sports and, and how they 1037 00:58:37,040 --> 00:58:39,760 resonate on the national level. I think that revenue number is 1038 00:58:39,760 --> 00:58:42,400 going to go up to close to $100 million next year for the 1039 00:58:42,400 --> 00:58:44,520 women's tournament. This is where the men's 1040 00:58:44,520 --> 00:58:47,560 tournament is trying to add inventory so that they can 1041 00:58:47,560 --> 00:58:49,640 continue to generate more revenue there. 1042 00:58:49,920 --> 00:58:52,640 But the reality is, you know, over the course of a full 1043 00:58:52,640 --> 00:58:57,560 season, college football between ticket sales and the revenue 1044 00:58:57,560 --> 00:59:01,320 that you're generating off of television is just a much bigger 1045 00:59:01,320 --> 00:59:04,440 financial driver and it's a much bigger audience driver. 1046 00:59:04,440 --> 00:59:07,760 And then again, you got to go back to that basic idea of here, 1047 00:59:07,960 --> 00:59:09,640 like this is ultimately the goal. 1048 00:59:09,840 --> 00:59:11,680 You want to get things that attract the most number of 1049 00:59:11,680 --> 00:59:14,400 people get it on television because you're going to have 1050 00:59:14,400 --> 00:59:16,640 advertisers wanting to advertise there. 1051 00:59:16,760 --> 00:59:18,960 That makes the television networks money. 1052 00:59:19,400 --> 00:59:22,080 And in the case of the Big 10, makes them money because they're 1053 00:59:22,080 --> 00:59:24,720 a part owner of the network that those people are advertising on 1054 00:59:24,920 --> 00:59:28,640 In the SEC and others cases, that's giving you larger checks 1055 00:59:28,640 --> 00:59:32,680 because the networks are making more money off of your product, 1056 00:59:32,680 --> 00:59:34,080 which in this case is your games. 1057 00:59:36,120 --> 00:59:38,760 So the big question moving forward as we wrap this up is 1058 00:59:38,760 --> 00:59:43,560 going to be how on earth do college athletic departments 1059 00:59:43,560 --> 00:59:46,960 reconcile the need to have more money in their budgets because 1060 00:59:46,960 --> 00:59:49,760 they are voluntarily said now that they're going to pay 1061 00:59:50,120 --> 00:59:54,280 college athletes directly? And how successful are they 1062 00:59:54,280 --> 00:59:58,000 going to be in trying to limit outside payments knowing that 1063 00:59:58,000 --> 01:00:00,560 some schools don't actually want to limit outside payments? 1064 01:00:00,560 --> 01:00:03,360 And this is the big rub with this entire structure with the 1065 01:00:03,360 --> 01:00:06,560 house settlement, because it is supposed to be 20 and a half 1066 01:00:06,560 --> 01:00:09,480 million dollars Max coming out of athletic departments going 1067 01:00:09,480 --> 01:00:13,480 directly to athletes. And then NIL deals are supposed 1068 01:00:13,480 --> 01:00:16,800 to be legitimate NIL, and they're supposed to be an 1069 01:00:16,800 --> 01:00:19,880 arbiter that will ultimately decide whether or not an NIL 1070 01:00:19,880 --> 01:00:23,680 deal is legitimate or not. Why are colleges doing that? 1071 01:00:23,760 --> 01:00:25,120 Like, what is the purpose of that? 1072 01:00:26,880 --> 01:00:29,720 And that's really the set of questions that we're going to be 1073 01:00:29,720 --> 01:00:32,200 exploring on future episodes. But think about everything that 1074 01:00:32,200 --> 01:00:35,160 we've learned today. And so much of it really, in my 1075 01:00:35,160 --> 01:00:39,320 opinion, comes back to college athletics wants to consolidate 1076 01:00:39,320 --> 01:00:41,520 revenue back into athletic departments. 1077 01:00:41,800 --> 01:00:45,440 It's been, obviously, even with all these increases, it's been 1078 01:00:45,440 --> 01:00:47,440 uncomfortable for college athletic departments to 1079 01:00:47,440 --> 01:00:49,960 essentially feel like they're in financial competition with their 1080 01:00:49,960 --> 01:00:52,480 own athletes. And it's been difficult for 1081 01:00:52,480 --> 01:00:55,760 those athletic departments and those coaches to have to go in 1082 01:00:55,760 --> 01:00:58,960 and say you need to give to the NIL collective because that's 1083 01:00:58,960 --> 01:01:01,960 the money that athletes want. Mike Locksley has complained 1084 01:01:01,960 --> 01:01:04,480 like athletes don't want facilities or this or that. 1085 01:01:04,480 --> 01:01:05,840 They want, they just want to check. 1086 01:01:06,760 --> 01:01:09,440 And that's probably where we're headed. 1087 01:01:10,360 --> 01:01:14,360 It's going to be interesting though, because what college 1088 01:01:14,360 --> 01:01:18,200 athletics wants is control over all the money that's flowing in. 1089 01:01:18,200 --> 01:01:21,440 And again, going all the way back to what happened in the 70s 1090 01:01:21,440 --> 01:01:24,360 and 80s, they want to control as much of that and have as much of 1091 01:01:24,360 --> 01:01:26,280 that coming to them directly as possible. 1092 01:01:26,720 --> 01:01:29,240 And then they want to be in charge of metering the money out 1093 01:01:29,240 --> 01:01:31,680 to athletes. The fact that we've gotten to 1094 01:01:31,680 --> 01:01:33,680 the point where athletes will make any money at the college 1095 01:01:33,680 --> 01:01:39,480 level is clearly a big evolution and a much more equitable system 1096 01:01:39,520 --> 01:01:43,240 than what existed before. The flip side of it is there's a 1097 01:01:43,240 --> 01:01:45,800 significant amount of money in this system. 1098 01:01:47,600 --> 01:01:52,040 And as that continues to grow, colleges and universities want 1099 01:01:52,080 --> 01:01:55,480 to amass as much of that revenue going directly to them as 1100 01:01:55,480 --> 01:01:58,560 possible and limit as much as possible what's going to the 1101 01:01:58,560 --> 01:02:02,600 athletes outside of this sequential system that they've 1102 01:02:02,600 --> 01:02:04,160 tried to come up with this house settlement. 1103 01:02:04,520 --> 01:02:07,120 And The thing is, I don't know that the courts are going to 1104 01:02:07,120 --> 01:02:09,920 agree with college athletics because college athletics 1105 01:02:10,200 --> 01:02:12,800 doesn't really agree with itself on what the method's going to 1106 01:02:12,800 --> 01:02:15,400 be. And for all the proclamations 1107 01:02:15,400 --> 01:02:17,160 from these conference commissioners, as we've heard 1108 01:02:17,160 --> 01:02:20,920 over the course of the last week about how NIL GO is going to 1109 01:02:21,000 --> 01:02:25,360 regulate this system, and, you know, they're going to tie money 1110 01:02:25,360 --> 01:02:28,000 to enrollment, which it'll cut down on transfers. 1111 01:02:28,000 --> 01:02:31,680 They've got this clearly defined system in their head, but it's 1112 01:02:31,680 --> 01:02:34,920 not really legally enforceable. There's no antitrust exemptions 1113 01:02:34,920 --> 01:02:37,400 in play. They're relying on a bill from 1114 01:02:37,400 --> 01:02:39,760 Congress that will almost certainly not come, at least not 1115 01:02:39,760 --> 01:02:44,200 in this legislative cycle. And they fundamentally refused 1116 01:02:44,200 --> 01:02:47,680 to sit down and just kind of establish an actual business 1117 01:02:47,880 --> 01:02:50,360 involving a certain number of participants from across the 1118 01:02:50,360 --> 01:02:53,640 various conferences. So what I think is going to be 1119 01:02:53,640 --> 01:02:56,040 fascinating is whether or not college athletics find 1120 01:02:56,040 --> 01:02:58,440 themselves in a position where now they're out laying a bunch 1121 01:02:58,440 --> 01:03:02,760 of money in revenue share to athletes, but they're still 1122 01:03:02,760 --> 01:03:05,200 finding themselves in a position where significant amounts of 1123 01:03:05,200 --> 01:03:09,040 money is flowing to college athletes outside of the 1124 01:03:09,040 --> 01:03:11,640 distribution process. And as you seen with like Texas 1125 01:03:11,640 --> 01:03:14,960 Tech and with some of these other schools who SMU being 1126 01:03:14,960 --> 01:03:18,080 another one where the donors have said, we want to be great 1127 01:03:18,080 --> 01:03:20,560 in college athletics, we're willing to do whatever it takes. 1128 01:03:20,560 --> 01:03:24,720 We're just going to pay and people can sue us and we'll win 1129 01:03:24,720 --> 01:03:26,800 because there's nothing that says that we can't. 1130 01:03:27,080 --> 01:03:29,880 That's going to be the really interesting thing as we move 1131 01:03:29,880 --> 01:03:32,560 forward, you know, and I think it's important to have the whole 1132 01:03:32,560 --> 01:03:35,080 backdrop of what's happened financially over the last 25 1133 01:03:35,080 --> 01:03:37,920 years because that's where the seeds have been planted for the 1134 01:03:37,920 --> 01:03:39,960 direction that we seem to be going in right now. 1135 01:03:39,960 --> 01:03:42,760 So it's going to be a really fascinating next couple of years 1136 01:03:42,960 --> 01:03:46,280 as these things play out in court and as we see what the 1137 01:03:46,280 --> 01:03:49,680 market will actually bear when it comes to college athletics 1138 01:03:49,760 --> 01:03:52,840 and, and how it all meters itself out from a financial 1139 01:03:52,840 --> 01:03:55,560 perspective and where the money's flowing and then 1140 01:03:55,560 --> 01:03:58,760 ultimately who has access to it. So anyway, hope that this was 1141 01:03:58,760 --> 01:04:00,840 informative and useful. We'll be back. 1142 01:04:00,840 --> 01:04:04,040 We've got Ben Portnoy coming up. I think tomorrow we'll have more 1143 01:04:04,440 --> 01:04:07,680 podcast next week as I do a full breakdown of what's going on 1144 01:04:07,680 --> 01:04:11,320 with NIL go and how that's going to impact what IU is doing and 1145 01:04:11,320 --> 01:04:12,800 other schools across the country. 1146 01:04:12,800 --> 01:04:16,920 So thanks for paying attention and hopefully this wasn't too 1147 01:04:16,920 --> 01:04:20,000 dry for you, but some really interesting stuff and I think, 1148 01:04:20,280 --> 01:04:22,600 you know, popping the hood and actually getting a sense of 1149 01:04:22,600 --> 01:04:25,560 what's going on in college athletics really does help you 1150 01:04:25,560 --> 01:04:28,520 better understand what you're reading and hearing about on a 1151 01:04:28,520 --> 01:04:30,640 day by day basis. We'll be back with more here on 1152 01:04:30,640 --> 01:04:32,120 Crimson Cast. Thanks for listening. 1153 01:04:32,400 --> 01:04:34,200 Thanks for watching. Thanks for being a part of the 1154 01:04:34,200 --> 01:04:35,640 back home network. We'll catch you folks. 1155 01:04:35,680 --> 01:04:37,200 On the flip side, stay never daunted. 1156 01:04:37,400 --> 01:04:37,960 So on everybody.