SALT LAKE CITY — BYU and Utah meet on the football field 8:15 p.m. Saturday. The FOX 13 Investigates team is running onto the field with a discussion of the finances of the two universities’ athletics departments and how that – and maybe other factors, one researcher says – motivated their moves to the Big 12.
FOX 13 Investigative reporter Nate Carlisle spoke with Stephanie Herbst-Lucke, of Georgia State University, the associate chair of student success and who also conducts research on conference realignment in college sports. Carlisle also interviewed Ben Portnoy, a reporter at the Sports Business Journal.
Both agreed name, image and likeness, or NIL, as well as the pending settlement in the House v. NCAA case is changing the finances of college sports. NIL allows collegiate athletes to receive money from a third party. The House settlement is expected to begin an era where universities share sports revenues directly with their athletes.
(EDITOR'S NOTE: The interview has been edited for grammar and clarity.)
Nate: “What kind of factor was money for Utah and BYU to join the Big 12?”
Herbst-Lucke: “I think a separate question is, ‘Why would they join the Big 12?’ And I think they would argue that it's for resource enhancement, and that's been the argument for all realignment.
“But what we really know about realignment from the research that we've done, both qualitative and quantitative, is the true driver of college conference change is a combination of social identity, where there's pressures to be in certain groupings and relevance, right? That it's preservation. And I would argue that in both cases, this was about preservation for these teams, if you want to be relevant.”
Portnoy: “I think there's two pieces that would say, why Utah and BYU would join the Big 12. I think money is a big one. And, I think, stability, right? You look at the Pac-12 falling apart and sort of the implosion there. A lot of these schools were left to kind of fend for themselves.
“And Utah, in particular, saw the Big 12 was a sort of soft landing spot. It's probably understating it. And for BYU, this has been a long standing thing, you know, I spoke with BYU AD Tom Holmoe not that long ago, and he said to me that this has been something that they've been looking for years, was to get into a power conference, and that football independence in particular, and the challenges of that, whether it was building a schedule, or crisscrossing the country and all of those things, is a really challenging existence in 2024 and I think that when you tie that into the fact you're guaranteed somewhere between $30 and $35 and maybe $40, $45 million in revenue from the Big 12 media contract annually, compared to what BYU would get for its own TV contract just on its own, those are big financial decisions that I think drove the administrators at those schools to find themselves in the Big 12.”
Nate: “We've got some data now on how much revenue universities take into their athletic programs. But is that really the key metric anymore? Has NIL changed that?”
Herbst-Lucke: “I don't think it's NIL that changed it. I think expenses change that.”
“NIL pulls money that would otherwise probably go to athletic departments, and instead that's going into a collective that, in many cases, is going to the student athletes so you have less money supporting athletic departments at the same time that the requirements for recruiting and infrastructure and now payment to those athletes is going to be a bigger and bigger issue.”
Portnoy: “Collectives and NIL are certainly more important, or as important as they've ever been, right? I think that we are in a landscape that has totally flipped from ticket sales and attendance and things like that, to, ‘How much can your collective raise right now?’
“Now, it depends on the place and the conference and all of these things, but I do think there's a there's a heightened sense that schools need to be fundraising for NIL now that could look a lot different shortly, depending on what happens with the House settlement and things along those lines, and where the money is coming from. But between what conferences are getting in their media rights deals and what they're fundraising in their sort of NIL collectives, that, to me, is sort of the biggest indicators of, you know what schools are able to compete at what level right now in college sports.”
Nate: “But to what extent do athletic departments still need to make money for facilities upgrades and paying off bonds and stuff like that? Does that still have any role in attracting athletes at this point?”
Herbst-Lucke: “Yeah, I mean, it's, it's probably a bigger role than it ever was right now. It's getting harder and harder to compete. You're either got the big dogs who are able to play both in NIL, because they're able to form pretty strong collectives, at the same time they're able to sustain their programs, and there's very few that are able to do both right now.”
Portnoy: “Yeah, I think this is the interesting dynamic that a lot of schools are going through right now, is that they've said, ‘OK, we need to fundraise for money for the NIL collective. We need to fundraise money for revenue share if that were to go through with the House settlement. But you're also balancing that with, how do you keep your facilities updated? How do you keep your staffing financially relevant and sort of in the same realm as what you would pay coaches and other things? So, I think that a lot of athletic departments are playing this balancing act.
“Per the terms of the House settlement, [that] would be starting in 2025-2026 [and] would be about $20 million a year. You're not necessarily cutting anything. You're just adding an extra $20 million expense in addition to also figuring out, how do you fund facility projects and other things that you know people have spent money on for years in college athletics, and I think that's where schools live in, this really interesting crux that creates an issue for a lot of places, and I think you're seeing that happen put a bigger, bigger, bigger and bigger strain on college athletic departments.”
Nate: “I'm not arguing with paying college athletes, but this sounds a little bit like a cross between Monopoly and my fantasy baseball team, and we've already seen coaches quit because it's too hard. Is there any indication the fans don't like this arrangement?”
Herbst-Lucke: “Fans love the history, the tradition, the legacy of this program, they like coming in person. And what NIL does, it is professionalizing this sport.
“And we know the fans are looking for amateurism. That's what distinguishes college athletics. That's what makes the beauty of basketball still feel authentic, especially in the women's leagues right now, versus what's becoming more and more professionalized in men's basketball, but specifically college football, with NIL and the paying of athletes.
“And I think what's beautiful about BYU and Utah is you've got enough money in NIL to be relevant, but not enough money that you're really competing in those transfer portals that you know some of the big dogs, for instance, are. So, I think that they're able to keep some of their players a little bit longer.”
Portnoy: “I would say there's always vitriol around this payment of players, and there's been a lot of, sort of, a vocal minority that has said, ‘Hey, what are we doing here? Why are we paying players?’
“But I think you look at the TV ratings. College football is having its best season in history, or one of its best seasons in history. “College Game Day” is in the middle of its best season in history.
“Just because Caitlin Clark can be in a Gatorade commercial, I don't think changes the perception that college basketball is still great, or college football is. Just because a quarterback can be in a commercial doesn't make it work any worse than it was before.
“Conferences are getting paid more and more in their media rights deals. Money is continuing to flow into the into the industry.”
Nate: “How much better is this really going to be for Utah State at this point? Is the Pac-12 anything like it was before?”
Herbst-Lucke: “That is yet to be seen. I think the relevant conferences are the other conferences.
“I think it's ironic what's happened to the Pac-12 since Larry Scott, you know, was first there, and that became the first of the leagues to kind of professionalize [by hiring a commissioner, Scott, from outside the industry]. And then if you look what's happened with that conference today, it's come kind of full circle, but I think it's great for the teams, like Utah and like BYU, that are able to transfer into something like the Big 12. I think that's probably a safer place to be.”
Portnoy: “How much time you got? No, look, I think Utah State joining the Pac-12, I think is an interesting dynamic because I think, if you look at the construct of what the new Pac-12 is, it's functionally the Mountain West with a shinier, new logo. Now, folks within that league, media consultants, others that are working with the Pac-12 are optimistic that they're going to be able to net a bigger return on the event inevitable TV contract that they're going to have to negotiate and figure out than what they would have gotten with the Mountain West as it existed previously.
“Now whether that comes to fruition, we'll see. I think there's a lot of skepticism within the industry about how big that media rights contract and the PAC-12 and their consultants are touting might actually be in practice. If you're Utah State, I think that the short version is, you look at it and say, ‘OK, we can either sit here and get a little bit of a bigger cut of the pie [in the Mountain West], or we take the bottom half of this league [move to the Pac-12], reshape it, with the best brands in [the Mountain West], and add some stronger branches to the bottom, and hopefully we end up with a higher return.
“And I think that's functionally the calculus, but I do think there's a lot of questions to be answered around it as well.”
(Note: The conversation with Herbst-Lucke was abbreviated due to a bad internet connection. Nate and Portnoy talked longer.)
Nate: “OK, Ben, unless there's something I failed to ask that you don't think we've covered here….”
Portnoy: “I don't know if you need any more info on like the Pac-12 breakup or anything like that.”
Nate: “Hey, people never get tired of being pissed off at the management of the Pac-12. So, please go ahead.”
Portnoy: “I think if you talk to a lot of people in the industry, a lot of folks that will tell you the thing that really, I think set college athletics to sort of cross the Rubicon was the breakup of the Pac-12 and the Big Ten going after UCLA and USC. And I think once that happened, it opened the door again for massive realignment.
“And I think it left college athletics in this sort of sprint to the bottom, a little bit of, ‘Who can nab the brands as quickly as they can and where do those schools land?’ And I think it's why you see sort of the fracturing of college athletics right now. The rich have gotten richer, and they only continue to be stronger in the way that the system is set up, between the Big 10 and the SEC in particular. And I think that it's all a means to an end. Now, what that end actually is we'll see, but I do think that college athletics is, if they're not at the point of reckoning, they're nearing it. And I think that, you know, certainly this is something that is going to take a few years to resolve, and I don't think it's all going to happen overnight.”
Nate: “Is the Pac-12 going to be a Power 5 conference again?”
Portnoy: “I don't think so.
“And I think that the perception that the Pac-12 might end up being a Power 5 or a Power 4, whatever number we're using these days to qualify those schools, I think right now, no, I think could it change, certainly. But I think right now, the Pac-12 was in about the same spot, I think most people would tell you, and as the American Athletic Conference, or maybe some others.”