Gophers will 'pay for play' under new college athlete revenue-sharing settlement

Gopher football staff fielded questions from the media Wednesday morning as the team readies for another season.

The football program is usually a revenue producer for the University of Minnesota Athletics Department. This year, however, the department is looking at a $8.7 million budget shortfall, as Athletics Director Mark Coyle presented to the Board of Regents last week.

The deficit is in part because colleges are starting to pay some athletes after a recent settlement with the NCAA.

Chip Scoggins with the Minnesota Star Tribune joined MPR News host Cathy Wurzer on Morning Edition to explain what this all means for students, fans and schools.

The following has been lightly edited for clarity. Listen to the conversation by clicking the player button above.

How does a revenue-sharing deal between higher-education institutions and student athletes work?

This case has been tied up in courts for a while now, but the schools have anticipated this happening. A federal judge in California approved the House v. NCAA antitrust settlement in June. Basically, schools can opt into revenue-sharing, and if they do, they can spend up to $20.5 million on their athletes per year, and that goes up 4 percent every year.

The Gophers are going to commit to paying athletes $20.5 million this year. Mark Coyle said that money is going to be spread across five programs: the football team, men's and women's basketball, volleyball and men's hockey. He wouldn't say what percentage each team is going to get, citing competitive reasons. But within the industry, most people expect that football is going to get 75 percent of that pie. Now it's up to Football Coach PJ Fleck and each individual program to see how they're going to divvy up that money, but those checks started going out July 1.

Is this straight cash or scholarships?

This is in addition to scholarships and name, image and likeness (NIL) — which I think people are familiar with now. Those are kind of endorsement deals that athletes can get on their own. And all Minnesota athletes are still eligible for the NIL deals. This is just straight cash. They sign contracts. It's the first time in NCAA history that schools can directly compensate their athletes. This is pay for play.

How will the U of M backfill its athletics budget deficit?

They're going to work with the university and try to figure this out. In future years, TV revenue and media rights distribution from the Big 10 and the NCAA are going to continue to increase. I think most people expect that the college football playoff is going to go from 12 to 16 teams in a couple of years. That's going to be a big jump in revenue for them. And really, they need men's basketball to start producing more money. Their attendance was way down in recent years, and so they need to squeeze more out of that.

This is the kind of pressure that these major colleges face now. They need to make as much money as they can off football and men's basketball, because those are the two primary generators of revenue. And so there's a gap there between what the Gophers are taking in men's basketball, what they need to get to. And I think that's part of the reason why you saw a coaching change and bringing in Niko Medved, because they need that program to be more successful.

So what are the next steps?

They just start paying the athletes, and part of the deal, too, is that schools could add scholarships starting in July that would count against that $20.5 million. Mark Coyle is committed to adding 11 new scholarships: six for women's sports, and then five more for football.

This is the new world in college athletics. Athletes are starting July 1. They're getting paid. And so you can look at it as this has become professional sports, and it'd be hard to argue against that.

Can student athletes not included in this agreement profit off their sport in other ways?

For sure, and that's where the NIL comes in, that's a separate bucket. I would bet all the football players at least have some. Many athletes across all of their 22 sports have NIL deals on campus. So even if you're not part of the revenue-sharing, you're there's still the possibility to make revenue off name, image and likeness, off of popularity, they could do autograph signings, visits, endorsements — those types of things.

Is this fair to students who aren’t athletes? Or just the way of the world now?

I mean, we could argue fair all day. This is where college sports are. The university put in place a new student fee to try to help cover this cost. It's $100 per semester per student to try to generate revenues for athletics and help cover these expenses. That probably doesn't sit well with some students, but a lot of schools have turned into this because these athletic departments have a brand new expense — a $20 million expense — that they didn't have to account for before this year, and they have to find that money somewhere.