College athletics is entering a new era that will challenge fans’ commitment and responsibility to ensure their favorite schools remain competitive, as college sports start to resemble professional sports organizations more closely.
The House Settlement, approved by a federal judge in June, allows Division I colleges and universities to pay athletes for Name, Image, and Likeness directly. Schools can directly pay athletes with a cap of $20.5 million the first year. That will increase by four percent each year for the next ten years.
For WVU, that means about 20 percent of the annual athletic budget would need to be diverted to player compensation or find new ways to raise revenue. WVU and other universities are choosing the latter.
Examples of revenue-increasing plans include Arkansas has increased the cost of concessions by three percent. Tennessee has instituted a “talent fee” to the price of tickets. Clemson has added a $150 “athletic fee” per semester to the price of tuition.
WVU Athletics Director Wren Baker recently joined the “3 Guys Before The Game” podcast to discuss strategies to meet this new obligation. He outlined a diverse plan that includes increased fundraising, a new $125 “Mountaineer Athletics Advantage Fee” for WVU students, and putting a price on everything.
Initiatives may include reseating men’s basketball games, examining parking pass allotments, and doing away with wink-and-nod agreements that have given longtime ticket holders freebies here and there. There will also be increased required donations to the Mountaineer Athletic Club to go along with the cost of season ticket packages.
This new era of player compensation and increased emphasis on revenue generation also comes at a time when higher education overall is facing financial challenges.
Colleges and universities are dealing with an enrollment cliff. A decline in birthrates in the United States since 2008 has created a drop in the college-aged population of about 15 percent. That’s expected to continue through 2041.
According to the Western Interstate Commission for Higher Education, West Virginia is expected to experience a 26 percent drop in high school graduates over the next ten years, due largely to the state’s declining birthrates and shrinking population. With fewer students enrolling in college, there will be less revenue coming in overall.
And there are West Virginia’s challenging demographics. According to US Census Bureau data, the median income in West Virginia is just under $32,000 per year. There is a limit to how much the average college sports fan is financially able to support their favorite program.
College athletics is big business and leaders are attempting to merge the new reality with the old revenue-generating strategies that are being repackaged, asking fans and students to “invest” in athletics’ success.
It is yet to be seen how long this model will be sustainable, and how much money can be squeezed out of fans, donors, and students before college athletics ends up at what seems to be an inevitable destination, collective bargaining and true revenue sharing.
That is probably still years down the road. In the meantime, colleges are banking on fans’ passion for their favorite college programs.