What I heard at Big 12 spring meetings: Settlement fallout, ‘value creation’ on everyone’s minds

IRVING, Tex. — The uncertain future of college sports was on the agenda at Big 12 spring meetings this week.

Presidents, athletic directors and administrators from the conference’s soon-to-be 16 member universities gathered at the Ritz-Carlton over the course of four days, along with Big 12 commissioner Brett Yormark and other league officials. The recent settlement in the House v. NCAA lawsuit, including direct revenue-sharing with athletes, and the changing financial landscape of college sports were the overriding topics of conversation, publicly and privately.

“The overall, overarching theme for the week was all about creating value for our membership. Value creation is the number one initiative and priority,” Yormark said Friday. “A lot of work to be done. I look at this as a bit of a reset for our industry, and we’re prepared for that.”

Yormark also announced the conference will distribute a record $470 million to its 14 member universities this year, though that represents a per-school decrease from a year ago due to the additions of BYU, Cincinnati, UCF and Houston.

With Texas and Oklahoma set to depart for the SEC and the Four Corner schools — Arizona, Arizona State, Colorado and Utah — officially joining the Big 12 this summer, these were the main takeaways from the league’s spring meetings, based on Friday’s public comments and numerous conversations with those in attendance this week.

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New revenue opportunities

The phrase “maximize revenue” was a common one.

With revenue sharing to the tune of more than $20 million a year per school on the horizon, along with other financial demands as the Big Ten and SEC widen the media rights gap, there’s more pressure for Big 12 schools to find new sources of revenue.

Power-conference programs are flush with money, but they’ve spent the past couple of decades finding ways to spend all of it on anything but direct athlete compensation. Now that the bill has come due, there will have to be some trimming — but don’t expect many wholesale changes. Spending to the limits of the $20-plus million a year cap set down by the House settlement will be a tough ask for most (if not all) of the Big 12, though they will do their best to have their media rights-funded cake and eat it, too.

That means potentially adding things like on-field branding and logos, a proposal the NCAA Playing Rules Oversight Panel will consider at its meeting next week, a source familiar with the panel’s agenda confirmed to The Athletic. Uniform sponsorship patches are another possibility, as are things like expanded naming rights, dynamic ticket prices and unique fan experiences.

Yormark said the league introduced an updated vision statement “built around being the most relevant and nationally recognized conference in America.”

None of this is unmarked territory within college sports by any means, but it will clearly be a renewed emphasis for the conference. It’s also familiar terrain to Yormark — a former vice president of corporate marketing for NASCAR, chief of business operations for the Brooklyn Nets and CEO of Roc Nation — and a big reason why he got the commissioner job in 2022.

“When I think about my background, I certainly believe that collegiate athletics is shifting more closely to where I came from than where we are today,” he said. “We as a conference can get better. We gotta continue to be more progressive, think outside the box and thrive in this new chapter.”

One area that would be new to college sports is private equity involvement, which has garnered some more attention (and trepidation) within the industry in the wake of the House settlement announcement. Yormark didn’t outline any specific plans regarding private equity on Friday, but he didn’t denounce or hide from it, either.

“In some respects, (interest from) private equity is a validation of where this industry is going and the growth trajectory,” he said. “So I don’t look at it as a bad thing.”

Settlement fallout

Similar to the vibes coming out of the SEC spring meetings, the unknowns surrounding the House settlement are as important as the facts, though that hasn’t stopped administrators from strategizing for things like revenue sharing and roster limits.

Hard numbers on the roster limits were not detailed in the initial settlement terms and are likely to be determined with conference input in the coming months, but just as SEC coaches coordinated their uproar over a possible limit of 85 for football programs — which could functionally eliminate walk-ons — numerous Big 12 athletic directors expressed similar concerns if that is the final decision. There will be challenges within the other sports as well, most of which expect to see an increase in roster limits.

“There’s not a consensus right now,” said Yormark in terms of roster-limit specifics. “That’s a work in progress. Nothing definitive.”

Another gray area is how Title IX policy will impact revenue sharing, and whether there will need to be a proportional distribution between men’s and women’s sports’ athletes. There seemed to be a growing sentiment among Big 12 folks over the course of the week that revenue sharing would not be directly beholden to Title IX because the money would be considered NIL payments via broadcast rights and therefore driven by an athlete’s market value. According to Title IX experts, it’s not that simple.

“Title IX is going to apply to the way schools distribute revenues or scholarship dollars or other benefits under the settlement agreement,” said Dan Cohen, an attorney with Barnes & Thornburg and former college sports administrator who specializes in sports law and Title IX cases. “Once a school takes those dollars on campus — whether to distribute TV revenues or facilitate NIL deals — the schools take responsibility for making such dollars equitably available to male and female student athletes.”

Creative ways to serve market-value demands while remaining Title IX compliant may be out there, but those will require time and attention — and may still have to hold up in court.

“We recognize that certain players are likely responsible for generating more of the underlying revenue,” Cohen said. “Meanwhile, the (Title IX) legal standard remains in place. We don’t yet have legal guidance to reconcile those differing factors, if schools are the ones paying the players, but I believe there will be ways to satisfy both interests simultaneously.”

Linda Livingstone, the president of Baylor and chair of the Big 12’s Board of Directors, acknowledged that leaders across college sports are still seeking more guidance on the topic.

“Because there is some uncertainty around Title IX and some other things, in some ways you’re working on models without understanding the complete playing field yet,” said Livingstone. “Hopefully we’ll get some clarification on some of the questions that will really help us understand better how to do the (revenue sharing) allocation.”

An interesting aspect of the revenue sharing is how the Big Ten and SEC’s widening of the power-conference financial gap will factor in, particularly for the most resource-rich schools at the top of those two leagues. The 22 percent cap on schools’ revenue sharing will be based on an annual average of the main power-conference revenue streams (media rights, ticket sales, sponsorships), which is the source of the rough athlete compensation calculations of $20 million per year per school. But as new television and College Football Playoff contracts kick in, the differences in revenues across power-conference teams will become more significant. Spending to that 22 percent cap will be much less of a burden for schools such as Ohio State, Texas, Alabama and Michigan than for others, especially in the Big 12 and ACC.

The House settlement has further established a divide between the power conferences and everyone else in college athletics, but it could also create a stratification within the power conferences.

Asked whether he expects all 16 of the Big 12’s schools to hit that 22 percent cap on revenue sharing if it does begin in 2025, Yormark reiterated the conference’s lofty ambitions.

“From what I’ve heard and the engagement I’ve had, what I can tell you is that we’re going to compete at a very high level, and making the right investments is part of that. I anticipate doing what we need to do when it comes to the (revenue sharing) cap,” he said. “We’re not afraid of it. We’re going to embrace it.”

On that same front, there has been talk across college sports that the financial ripple effect of a House settlement could cause athletic departments to reduce resources and administrative positions or even cut sports. None of that is outside the realm of possibility, even for power-conference schools, and these changes could be enough to push departments in directions they were already leaning. But similar rhetoric during the pandemic proved to be overblown.

“I’d like to think we could do this in a way that is fair to our student athletes that are helping to generate lots of revenue, but also doesn’t do damage to sports that are really important nationally and internationally in the Olympic movement,” said Livingstone.

Any suggestions otherwise — that significant cuts or sweeping changes are coming — feel like posturing.

“We always find the money,” said one Big 12 athletic director.

The future of collectives

What becomes of NIL collectives is another unanswered question. Athletic departments are preparing for NIL operations to be brought in-house, and the expectation among many in the industry is that the House settlement will afford the NCAA more power to enforce NIL regulations, including “true NIL” and not the pay-for-play model that collectives have developed.

An interesting power struggle could emerge out of that. Would bringing collectives in-house make their payments to athletes part of the revenue-sharing cap? Schools could license their athletes’ NIL rights under the cap and then help facilitate additional third-party deals. But there will absolutely be resource-rich programs who might prefer to keep collectives outside the department’s cap, allowing them to supplement revenue-sharing distributions with collective payments.

“In the House settlement you can (bring NIL collectives) in-house if you want to, so I think it will be a conversation that individual schools have, and potentially conferences could have that conversation as well,” said Livingstone.

It wasn’t all revenue brainstorming and settlement hand-wringing at the spring meetings. There were discussions on things like scheduling and how to handle the growth of sports gambling. But the financial model of college sports’ arrival on the verge of a historic transformation has created an obvious focus for Yormark and the Big 12 moving forward.

“Obviously it’s going to be a changing landscape, but I do see opportunities in that changing landscape. The work really starts now,” said Yormark. “We as a conference need to continue to be bold.”

(Photo: David Purdy / Getty Images)