Revenue sharing in college sports will truly transform the financial landscape for student-athletes and the schools they attend. But to many the term may seem so vague… what does it actually mean? Even as a former DI athlete, even I had questions about how revenue sharing will play a role in athletes lives and college sports as a whole. With the recent antitrust settlement paving the way for schools to share revenue with athletes, here are a few questions (and key things to know) that might help you better understand revenue sharing and it’s future impact on college sports.
What Is Revenue Sharing?
Revenue sharing refers to the distribution of profits generated by a business or organization among its stakeholders. In the context of college athletics, this means schools will share a portion of the revenue generated through athletics programs, such as from broadcasting rights, sponsorships, ticket sales, and merchandise, with their student-athletes. While this concept has long been part of professional sports, the move toward revenue sharing in college sports marks a significant shift from the traditional model, where athletes have primarily received scholarships and non-monetary benefits.
Key Things to Know About Revenue Sharing in College Athletics
A New Era for College Athletes. One of the biggest implications of revenue sharing is that it recognizes student-athletes as key contributors to the financial success of their institutions. Previously, college athletes were restricted to scholarships and other educational benefits. Now, they will be able to earn a share of the revenue generated by their performance. This marks a major shift, as student-athletes will be compensated in ways that more closely resemble professional athletes.
It Could Lead to Increased Earnings for Athletes. Athletes, particularly in high-revenue sports like football and basketball, could see significant financial benefits. These sports generate millions of dollars for colleges through TV deals, merchandising, and ticket sales. Under a revenue-sharing model, athletes in these programs stand to receive a portion of that income. This could be life-changing for many student-athletes, particularly those from low-income backgrounds, as they begin to receive direct financial compensation beyond scholarships and stipends.
Impact on Non-Revenue Sports. While revenue sharing could be a boon for athletes in high-profile sports, the outlook for athletes in non-revenue sports (such as tennis, swimming, or gymnastics) is less clear. Schools may prioritize sports that generate the most money, potentially leading to reduced funding or support for programs that don’t bring in substantial revenue. This could widen the gap between revenue-generating sports and others, with athletes in the latter category receiving less financial benefit.
Potential Reduction in Scholarships. One potential downside of revenue sharing is the effect it could have on the scholarship system. As schools begin allocating funds directly to athletes, they may be forced to reduce the number of athletic scholarships they offer. Schools have limited budgets, and if a significant portion is allocated to direct compensation for athletes, there may be fewer resources available to support athletes via scholarships. This could particularly affect athletes in non-revenue sports.
Increased Pressure on Schools to Generate Revenue. For colleges, the shift to revenue sharing could create new financial pressures. Schools that are heavily dependent on athletics revenue may feel compelled to increase their focus on winning and marketing to maximize their profits. This could lead to heightened competition among schools for the best athletes, and even more commercialization of college sports, as institutions look for ways to increase their earnings to support both athletic programs and athlete compensation.
Athletes’ Role as Stakeholders. With revenue sharing, athletes become more than just participants in their sports programs; they are now stakeholders in the financial success of their institutions. This could lead to athletes having a greater voice in decisions that affect the program, including coaching hires, facilities improvements, and even decisions about which games to schedule. As their financial stake in the program grows, athletes could potentially have a greater say in how programs are run.
Revenue sharing marks a huge change in the structure of college sports, potentially offering significant financial rewards for athletes, particularly in high-revenue sports. But it also presents challenges, especially for non-revenue sports and the traditional scholarship system. Both athletes and schools will need to adapt to this new model, but overall, revenue sharing has the potential to reshape college athletics by providing greater fairness and opportunities for student-athletes.