When he was younger, LSU athletic director Scott Woodward remembered, people argued free agency would ruin the NFL. Owners fought for decades to control player movement until they had to settle an antitrust lawsuit in 1993, leading to unrestricted free agency.
But rather than crumble, the league flourished.
Woodward thought back to those debates as college sports changed when the NCAA and its power conferences agreed Thursday to settle three federal antitrust lawsuits. The NFL is “still pretty popular,” Woodward said, and he believes major college sports will continue to be when schools pay athletes directly for the first time.
“[The NFL] did change,” Woodward told The Advocate. “But did it end it? Did it cause it to decline? Not really. I think this is kind of going to be similar, in my opinion. [College sports are] going to be different. Do I like the way it is? Do I prefer the way it was? Of course. But we’re going to thrive in the way it is and we’re going to make the best of it.”
Under the settlement terms, the NCAA must pay $2.78 billion in damages over 10 years and Division I schools can pay their athletes roughly $20 million per year on top of existing scholarships and benefits. The deal must still be approved and details remain unclear — particularly related to Title IX, NIL and employment — but the system could begin in fall 2025.
I’m most pleased with it because it’s going to put some certainty back in what we do,” Woodward said. “Do I like it? Not necessarily. No one likes change. But I see this as a good opportunity for us because our athletic department had great success in this chaotic world that we’re in right now with NIL and the (transfer) portal and all that stuff. I think that’s a testament to LSU and the brand and how strong it is. I look forward to the future, frankly.”
Revenue sharing will change how LSU and other athletic departments manage the books in order to compete. They have pumped cash into salaries and facilities for years, and now they will have to decide how to distribute funds to their players.
Schools can pay those players up to 22% of the average power conference athletic department’s revenue. Combined with tuition and other benefits, NCAA president Charlie Baker confirmed in a letter to membership obtained by The Advocate that many major schools would devote “nearly 50%” of athletics revenue to their players.
With one of the country’s most lucrative departments, LSU appears capable of absorbing the hit. It recorded the sixth-highest total revenue ($199.3 million) in the nation during the 2022 fiscal year, according to a USA Today database. But paying athletes will require an adjustment.
According to the most recently available NCAA financial report, LSU athletics would have used 10% of its revenue on player compensation during the 2023 fiscal year. That would have been the department’s fourth-highest expenditure behind coaches’ salaries ($38.8 million), support staff compensation ($36 million) and unspecified operating expenses ($27.8 million). During the same fiscal year, LSU reported $200.4 million in revenue, the most the department had ever generated. But it spent $199 million to cover everything from recruiting to meals, finishing with a $1.37 million profit. It will have to raise money and/or cut spending to account for what is expected to be at least $200 million in additional expenses over the 10-year settlement.
As part of the deal, the NCAA will withhold an estimated $2 million annually in distributions to major conference teams to cover the damages owed to athletes from 2016-20 who could not receive name, image and likeness benefits. That’s a small piece of LSU’s budget, but it adds to the change in calculations. It’s going to come from a lot of places,” Woodward said. “From growth in revenue, and everyone knows what that is. It’s TV growth, it’s admissions [ticket prices] growth, which we do very carefully. It’s growth in our apparel contracts or multimedia rights contracts. And then a big part of this is us continuing to try to keep our expenses relatively sane and run it as efficiently as possible.”
It could help that a combined $5 million can be offset through annual Alston payments and potential new scholarships. LSU already makes Alston payments. Additional scholarships created out of new roster sizes and the elimination of scholarship limits can also count toward the cost. Future roster sizes have not been determined.
For athletic departments, the most lucrative sources of revenue are tickets, donations, media rights and sponsorships. Most of that comes from the football program, which accounted for a little more than half ($105.7 million) of LSU’s revenue during the 2023 fiscal year. LSU football made $40.7 million on tickets, $27.9 million in donations and $15.1 million from media rights.