College Sports Cash Flow: A New Era of Athlete Pay
A Major Shift in College Sports
Starting July 1, schools can now pay athletes directly. This marks a significant departure from the traditional model where athletes were not compensated for their skills.
The Rise of Collectives
Before this change, collectives were providing athletes with substantial sums. Spending surged dramatically:
- June 2023: 824% increase from last year
- January 2023: 215% increase
- April 2023: 182% increase
These spikes coincided with transfer windows, allowing athletes to move to new schools.
Schools Investing Heavily
Some schools capitalized on this opportunity. Texas Tech, for example, recruited top players, with their athletic director calling it a once-in-a-decade chance.
Where Is the Money Going?
- Football: Quarterbacks receive the highest payouts.
- Basketball: Guards earn the most in men's games, while centers dominate in women's basketball.
Revenue Sharing Begins
Schools will now share revenue with athletes, a novel approach requiring careful distribution. Football will likely receive the largest share, but other sports will also benefit.
The Future of Athlete Compensation
While NIL (Name, Image, Likeness) money from collectives may decline—potentially dropping from $1.3 billion to $77.9 million by 2028—schools will have new funds to allocate. Overall, athlete compensation could still rise.
Adapting to the New System
Schools must now market their players effectively to generate additional revenue. This new system is complex, representing a major shift from the past.