Your college football team is about to pay players. What can Utah and BYU afford?

A settlement with the NCAA could change the operating procedure for Power Four schools, forcing BYU and Utah to adjust.

(Francisco Kjolseth | The Salt Lake Tribune) BYU athletic director Tom Holmoe, adds his name to alumni wall under the class of 1982 as he joins the festivities put on to celebrate the school’s entry into the Big 12 Conference on Saturday, July 1, 2023.

The day BYU entered the Big 12 conference, athletic director Tom Holmoe stepped away from a midday celebration and gave a candid assessment of the future.

Sure, the Cougars had just made it to the Power Five. This was the acceptance into college football’s elite he had craved.

But Holmoe already saw changes on the horizon. The day’s celebration shouldn’t be conflated with stability, he said. To him, any admission to the elite was temporary. How well BYU adapted to whatever came next would determine how long the party lasted.

“This is a time in college athletics where it is not normal,” he said. “There are so many new features. … I’m asking for creativity in every area [to keep up].”

Less than a year later, the most significant changes in the history of college athletics are knocking at the door. Or, more accurately, change is kicking down the door after a string of lawsuits and a multi-billion-dollar settlement that will give players a direct share of their schools’ revenue for the first time.

The NCAA and its power conferences on Thursday signed off on the settlement that paves the way for university athletic departments to pay players themselves for the first time. A salary cap could be put in place for different leagues. It would be the closest model to professional sports that college has ever seen.

And schools like BYU, Utah and the rest of the sport have to figure out how to make it work or get left behind.

How did the NCAA get here?

Over the years, there have been dozens of challenges to the college athletics model. But none made it quite as far as the House v. NCAA case that is currently the catalyst for all this. It is a class-action lawsuit that demanded the NCAA pay damages to former athletes who could not profit from their name, image and likeness before 2021. The damages could apply to players dating back to 2016.

The second part of the lawsuit revolved around the future and how players could get some cut of the revenue generated by massive television contracts inked by the SEC, Big Ten, Big 12 and ACC.

Losing the case could have cost the NCAA a reported $20 billion. Instead, it’s led to a settlement agreement, where the NCAA will pay $2.7 billion to former athletes for damages.

How much will future athletes make?

Then there is a possible revenue-sharing plan to satisfy the future athletes.

Essentially, Power Four programs — who are benefiting from the multi-million dollar television deals — can opt into paying their athletes directly from their yearly revenue up to $20 million. That would be around 22% of the average revenue of Power Four schools, according to Yahoo Sports.

Each conference could set a salary cap to maintain some competitive balance and ensure no school is paying athletes far more than another. Is it possible that the SEC and Big Ten schools, who have the largest budgets and television revenue, would set the highest salary cap?

What does it mean for Utah and BYU?

But it leaves Big 12 schools like BYU and Utah in limbo. Conference leaders have to answer the big questions first: Would they opt into the revenue-sharing plan (although most schools will likely do that, Yahoo Sports reported)? And then how much of a revenue-sharing option can it afford?

Just because a school could theoretically pay up to $20 million to athletes a year doesn’t mean it has to do it. It doesn’t mean that every school can afford that either.

Utah’s current athlete budget shows how thin the margins are already. In 2023, the Utah athletic department brought in over $126 million. But it also spent around $124 million, giving it a surplus of just over $1.8 million.

(Bethany Baker | The Salt Lake Tribune) Utah Utes fans cheer ahead of the game against the Colorado Buffaloes at Rice-Eccles Stadium in Salt Lake City on Saturday, Nov. 25, 2023.

That means in order to theoretically find $20 million, it would either have to generate almost $18 million more or it would have to cut expenses somewhere else. This could be in coaches’ salaries or the number of programs it offers. Utah currently sponsors 20 varsity sports.

BYU will have a similar question. While its athletic budget is not public like Utah’s, it is estimated that the athletic department made around $95 million, according to the NCAA equity report. It is still ramping up its revenue as it doesn’t have a full share of the Big 12 television money yet.

As for expenses, BYU paid out around $80 million, according to the NCAA report. While that surplus would be higher than Utah’s, it is still not quite at the $20 million mark.

Plus, for both schools the margins of surplus could become even smaller in future years. As part of the settlement, it is expected that the scholarship cutoff will be lifted, syphoning off more athletic department resources.

When contacted this week, both BYU and Utah declined to comment on how they planned to deal with a revenue-sharing model and where the money would come from.

What will happen to NIL?

Another potential element is what will happen to schools’ current name, image and likeness collectives. Both BYU and Utah have officially endorsed NIL collectives. But if schools are directly paying athletes, would that make them obsolete?

There are no firm answers, but multiple potential solutions are being floated. One option, according to a source close to BYU’s NIL arm, would be to move the NIL collectives in house. All the money the Royal Blue Collective was raising to pay athletes could be absorbed by BYU’s athletic department and then go out to players officially through the school.

(Bethany Baker | The Salt Lake Tribune) Utah Utes center Lawson Lovering sits in a Dodge pickup truck after the Crimson Collective unveils brand new vehicles for athletes on the womenÕs gmnastic team and the menÕs and womenÕs basketball teams at the Jon M. Hunstman Center in Salt Lake City on Wednesday, Dec. 13, 2023.

This would allow schools two positives. For one, it would give the athletic department another source of revenue outside of its current budget to start paying players and getting closer to $20 million (without cutting current expenses). And two, it would be a more formalized process.

Instead of the collective signing every player individually to different deals — with many pitfalls and deals falling through — this would be standardized. The money would come directly from schools, like professional teams paying their players, and the deals would theoretically be more reliable.

At this point, the idea of moving NIL in house isn’t shocking. Many schools work closely with their officially endorsed collectives anyway and often influence decision making. NIL rules have already loosened so coaches and administrators can help raise funds for their players. Holmoe gave a speech about how fans should donate to the Royal Blue collective after basketball coach Mark Pope left for Kentucky.

Still, even if NIL does move in house, some believe there will be a role for outside NIL collectives to exist. If schools do opt into revenue sharing, it is still unclear what each player would make individually. Outside collectives could help supplement income if a player needs more money to stay at a school.

For example, of that $20 million, not every penny would go to the football program. It is possible that half of that money would be split evenly between men’s and women’s athletes to adhere to Title IX rules. In the NIL era, some argued that NIL perks did not have to be distributed evenly because it was theoretically outside the school’s purview (see Utah’s original truck deal). But if NIL moves in house, that argument might be weakened.

So if Title IX does apply, it might leave only a percentage of the $20 million to fund the football program’s cash supply to pay players. Outside NIL sources could act as pay supplements for top players. This could be outside the salary cap, like endorsement deals for professional athletes outside of their team contract.