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Texas Tech readies revenue-sharing strategy in anticipation of July 1 changes
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- Texas Tech readies revenue-sharing strategy in anticipation of July 1 changes
Texas Tech athletics director Kirby Hocutt outlined in mid-December how his department plans to divide up $20.5 million in annual revenue among its athletes in a pending new era of college sports. More than 91% will go to football and men's basketball players to reflect the percentage of revenue those two sports bring in.
But athletes on all 16 Tech sports teams will get a little something. Assuming a federal judge gives final approval to the House v. NCAA settlement proposal on April 7, new roster limits and revenue sharing would go into effect July 1.
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In terms of day-to-day operations, Tech's financial dealings with athletes will be administered internally.
"We've worked on NIL contracts that we will award to the designated student-athletes," Hocutt said, "so a football player that is on our roster next year more than likely will have an NIL contract with us that is inclusive of tuition, room, board and then whatever NIL amount that is determined appropriate. So we will administer those contracts internally, administratively and work with our coaches on managing the amount of revenue share that they have to award, helping them monitor that."
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It won't necessarily be a foreign concept to coaches, especially those in partial or "equivalency-scholarship" sports already accustomed to determining how to allocate scholarship benefits among their athletes.
"It'll be similar to our financial-aid process as it relates to coaches making decisions on financial aid for student-athletes," Tech deputy athletics director Jonathan Botros said. "They can also make decisions as it relates to an NIL licensing and endorsement agreement value, and then we just take over as far as the administration as it relates to executing the contract for the student-athletes — storing it, making sure payments are made, things like that."
Texas Tech director of athletics Kirby Hocutt speaks during a press conference at Jones AT&T Stadium, Friday, August 23, 2024.
Texas Tech's revenue-sharing execution a collaboration of compliance, business office, legal counsel, teams' management staff
Tech coach Joey McGuire said recently he expects multi-year contracts with buyouts to become common among players, just like with coaches. Hocutt said it's too early to say how many Tech athletes might be signed for more than one year.
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In preparation for the new way of doing business, Botros has led an internal group made up of professionals from Tech's compliance department, its business office and management from the individual sports teams.
"We've spent considerable time, energy and effort with legal counsel and the internal group that Jonathan has led," Hocutt said.
More: Texas Tech athletics to get more financial support from university
Though the House v. NCAA settlement proposal would allow it, Hocutt said Tech will not add scholarships in any sport, because any new spending on scholarships up to $2.5 million must be deducted from the $20.5 million revenue pool. For the same reason, Tech soon will discontinue the education-related benefit checks known as Alston awards for which it has budgeted about $1.7 million a year the past three years.
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The goal, Hocutt said, is to enable coaches to use their team's share of the $20.5 million however they see fit.
The House v. NCAA settlement would set new roster limits and make all athletics scholarships equivalencies. Football, with a 105-player roster, for example, could spread the benefits of 85 scholarships among more than 85 players in the same way baseball coaches can spread the benefits of 11.7 scholarships over a roster more than double that number. Hocutt said earlier this year players not on scholarship could receive revenue sharing sufficient to pay for school.
Texas Tech urges Red Raider Club giving as donor collectives face uncertain future
One group whose impact could be lessened, at Tech and elsewhere, is the donor collective.
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Between Dec. 11 and Dec. 19, McGuire got commitments from 16 players out of the NCAA transfer portal, aided by The Matador Club donor collective providing financial backing to attract talent.
The House v. NCAA settlement proposal could blunt the influence of collectives, too, after July 1. All third-party offers of $600 or more related to name, image and likeness would be subject to a fair-market-value assessment. Deloitte's been chosen to review such offers.
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If the settlement goes through, it's expected The Matador Club will cease operations July 1.
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"If The Matador Club does cease to exist as it stands currently," Botros said, "there'll be that fork in the road where it's critically important for us to continue to receive the support from fans and donors to the Red Raider Club now to support revenue sharing. And then the other piece of it will be to create opportunities for our student-athletes for true NIL."
That's another component of Tech's preparation.
"In the true NIL space," Hocutt said, "we're seeing more and more young people who will have their own individual agents and representatives that will solicit NIL opportunities in the business community. We're still talking about options for us to help engagement in that space — if it's building out something internally or if it's an outside agency that we partner with. We have not finalized any decision there, but would anticipate there would be opportunities that present themselves to certain athletes."
This article originally appeared on Lubbock Avalanche-Journal: Texas Tech readies revenue-sharing strategy as July 1 changes loom
