Inside the big business of college sports

The NCAA and its sporting events generate nearly $1 billion a year. To put that into perspective, prominent apparel company Vans generated just over $475 million in revenue last year, according to its 2021 annual financial report.

Stewart Stadium filled with cheering spectators. Photo credit: Weber State Athletics

“It’s about $800 million that the NCAA makes in revenue,” said Meagan Thunell, associate athletic director and senior women’s administrator at Weber State University. “They turn around and distribute over $600 million to participating institutions.”

More than half of the revenue generated from tournaments and championships goes to Division I programs, leaving a much smaller amount for Division II and Division III programs.

According to official financial reports, $100 million is being used to stage the March Madness Tournament, College Football Playoffs, and other NCAA sporting events.

This method of funding is why the NCAA is a hotspot for Dynasties. Schools like Duke University, University of North Carolina and University of California Los Angeles have won multiple NCAA basketball championships while schools like University of Alabama, University Louisiana State and the University of Southern California dominated college football in the fall.

“The rich stay rich,” Thunell said. “The programs that advance in the tournament, they get more distribution.”

While the wealthy are paid to stay powerful, smaller schools have to scramble for funding to stay as competitive as possible.

At NCAA March Madness tournaments, each Division I conference receives an automatic bid. In order to ensure that smaller programs receive NCAA funding and have a chance to compete in front of a national audience, some schools must win their conference championship to enter the tournament.

“Because of this even distribution of conferences, each conference that has an automatic bid gets a share,” Thunell said. “If we then have a team that wins in the first round and moves on to the second round, which has happened a few times in Big Sky conference history, then you get another share because you’re playing a second game. .”

Auto Bids help mid-sized programs like Weber State receive funds for sporting events, scholarships, facilities, and equipment.

“Like most other middle schools, we don’t get the majority of our funding because we don’t have teams that qualify for the tournament,” Thunell said. “But it’s the money that makes a big difference.”

Thunell says the pandemic made 2020 a tough year for fundraising, as no March Madness tournaments were held for the first time since 1938.

“During COVID, instead of handing out $600 million, they handed out less than $300 million,” Thunell said. “It had a huge impact on the schools.”

Much of the wealth generated by the NCAA is distributed to major institutions and student-athletes through scholarships.

Thunell said the structure could change, however, with talk of expanding the college football playoffs as well as rumors that schools in the power-five conferences will split off from the rest of the Division I schools to form a great league.

The power-five conferences consist of the Big Ten, Big 12, Atlantic Coast, Pac-12, and Southeastern Conference. If these conferences break up, it is assumed that their schools will receive even more funding from the NCAA. While it is possible that the funds will flow to players, the impact this decision could have on student-athletes, staff, fans and communities is not yet known.

Until recently, student-athletes were not allowed to make money with their name, image or likeness, also known as NIL, without punitive action from the NCAA. On July 1, 2021, the NCAA changed its policy to grant these privileges to student-athletes.

“The NCAA landscape is definitely changing right now with the name, image and likeness opportunities and the fact that there’s no national law about it,” Thunell said.

Stewart Stadium
Weber State University, like other mid-major programs, uses auto-bids to help fund their programs. Photo credit: Weber State Athletics

Athletes from award-winning schools like Alabama have benefited the most from these opportunities. During a press conference at a Texas High School Coaches Association event, Alabama head coach Nick Saban discussed the earning potential of some Crimson Tide players, in especially star quarterback Bryce Young.

“Our quarterback has already approached ungodly numbers,” Saban said. “It’s almost seven figures. And it’s like the guy ain’t even played [professionally] Again.”

In an effort to help student-athletes find and complete NIL deals, Big Sky Conference Commissioner Tom Wistrcill announced a partnership with the INFLCR in July 2021. INFLCR is an Alabama-based software company that helps student-athletes build their personal brand and connect with sponsors without violating NCAA guidelines.

“Big Sky Conference is thrilled to partner with the industry leader in this dynamic and evolving space,” Wistrcill said at a press conference following the announcement.

During this press conference, INFLCR Founder and CEO Jim Cavale said the software will help generate revenue for Big Sky student-athletes.

“The Big Sky is innovative and strategic in its approach to this new NIL era by providing the INFLCR verified product solution to each of its 11 department-wide member institutions,” Cavale said.

While Weber State athletes may not get the same national attention and financial support as school athletes attending power-five conferences, they can still make local NIL deals to grow their brand.

“The opportunity for them to be able to have an endorsement, even minimal, with a local establishment, be it a restaurant or anything else. These are exciting opportunities for student-athletes,” said Thunell. “People have said over the years that many top athletes have been taken advantage of for their talent. It’s hard not to look at the facts and tend to agree with it.

Although not all athletes sign an NIL agreement, the NCAA has organized student-athlete advisory committees at all levels to influence the decision-making process.

“It’s made up of student athletes who are basically in a leadership position to help make decisions and to help guide their own athletic departments,” Thunell said.

Thunell also said the NCAA is “requesting the votes on the legislation and really wants to give more voice to the student athlete.”

To further support student-athletes, the NCAA contributes more than $69 million annually to the Student Athlete Opportunity Fund, helping athletes in financial difficulty. A student-athlete’s medical expenses are often covered by the fund to make up for what insurance does not cover. A similar program is the Special Assistance Fund, which received just about $19 million last year.

In June 2020, the NCAA established the Academic Performance Fund, a program for all Division I schools that encourages academic excellence. In 2021, the amount allocated to the Academic Performance Fund was over $30 million.

NCAA funding has historically only favored power-five conference schools. However, student-athlete funds and NIL opportunities have enabled Division I athletes from other schools to receive the recognition they deserve.

[feather_share show=”twitter, facebook, mail” hide=”reddit, pinterest, linkedin, tumblr, mail”]