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4-Down Territory: Payoffs and Playoffs Make for a Tough Week in the College Football Neighborhood

First Down: Flip This House:


This week in the college football neighborhood, the NCAA looked at their house. It’s run down and its amateur model is wildly outdated. Estimates for what the remodel will cost them look like they will be very steep. So, the NCAA decided to flip the house with a DIY makeover. They want to update their house so they can get the public and the next generation of athletes to move in.


In a massive makeover, the NCAA proposed allowing certain high-revenue FBS schools to set up a new subdivision. Lots in this new subdivision won't be cheap. The buy-in is an educational trust for student-athletes. They would have to give at least half of all eligible student-athletes $30,000 a year. This was an attempt to hold onto the last piece of amateur model real estate and avoid the much costlier issues of players as employees, collective bargaining and costly benefits.


But will anyone buy this? Don’t bet on it. There are court cases rocketing towards the Supreme Court. Those cases will likely allow or require athletes to be employees and get paid straight out, not via a trust. The National Labor Relations Board has shown that in the cases of private institutions they are inclined to permit organization and collective bargaining for student-athletes. And you can bet that if USC gets to pay their players because they have to collectively bargain, every public university will do the same to keep up in recruiting.


And in naming $30,000 a year publicly, the NCAA made the first mistake in bargaining—they set the floor in negotiations. That number is only going to go up.


The future is coming. The NCAA is at least taking a first step towards the new reality that is long overdue. Old school fans may not like it, but with the billions of dollars being made an overdue reckoning and remake of the school/ student-athlete relationship is coming.


Second Down: Financing The House:


If a school like Penn State wants to meet the criteria of paying “at least half” the eligible student-athletes that is a lot of money. “Eligible student-athlete” has not been defined, so we’ll use the 800 athletes that Penn State has. Paying half of them would amount to $12 million a year. That is a big budget number to cover. And that is assuming that the $30K ends up being enough, and that does not include arranging additional NIL money for athletes.


That new expense will be troublesome after the latest national wave of highly leveraged facilities and stadium upgrades. Schools have also made massive long-term contract commitments to coaches. Many are also pissing away millions of dollars in dead money to pay fired coaches. This whole business model was all leveraged on future bigger TV revenues and college football playoff revenues (and in most, if not all, cases without accounting for any disruptions in the current business model).


And for athletic departments looking to take on big bond debt going forward, they will be reliant on the academic institutions to backstop those bonds to get more favorable rates. A model that requires big outlays of revenue to pay athletes will require cutting expenses from staff sizes to coaches' salaries. Given the uncertain athletics business model ahead, it would be hard for athletic departments to go to the bond market alone.


That is why Florida State has openly retained a Wall Street firm to talk about equity in their athletic department to finance their exit from the ACC. That firm sees athletic departments as undervalued assets akin to professional sports franchises (more on FSU later). And while we’re talking about Wall Street……


Let’s take a look at some numbers. Let’s assume every Power 5 school decides to opt in. And let’s assume that at a MINIMUM they give every scholarship football and men’s basketball player $30K a year. That is roughly 100 players. Because Title IX is mentioned specifically that means 100 women’s athletes will also have to get the $30K. Conservatively that’s 200 athletes per school because at a school like Penn State you'd certainly see ice hockey, wrestling and others as part of that pool.


So here are some estimates based on that conservative 200 number. Be forewarned, these national numbers are staggering.


68 schools x 200 athletes 13,600 athletes

13,600 athletes x $30,000 $408,000,000


That is a big number nationally. But that is just $6 million per school. Schools are now paying head football coaches or basketball coaches over $7 million and football coordinators $2 million. They're in overkill and overstaffing mode paying dozens of employees as well as consultants and outside firms to do work like branding or statistics. The schools have the money, they just need to find efficiencies by asking fewer people to do more work to free up money for the athletes.


Back to the numbers....


In year one $408 million goes into an educational trust fund. But we’re not done. Four years from now you’ll have a senior class, a junior class, a sophomore class and a freshman class. These are the total accrued assets by year four—a number that will be a constant as four classes keep rolling in and out of the trust.


Senior Class $1.632 BILLION

Junior Class $1.224 BILLION

Sophomore Class $ 816 million

Freshman Class $ 408 Million


Total assets under management $4.08 BILLION.


Here’s where the fun begins. Is this a national educational trust administered by one firm hired by the NCAA investing that money for all the athletes? That means massive "asset under management fees" for some lucky firm.


But there are far more questions....


Can players opt to have their own wealth management professional invest their funds?

Will conferences or schools administer their own educational trust fund?

Do players and their parents start asking for a prospectus to see which conferences or which teams have the best track records of returns on the money invested?

Does that become a recruiting edge for the schools with the best returns?

If the market tanks who covers the shortfall?

If it goes up 20% do the athletes benefit or are they getting a flat $30K annually/ $120K over 4 years?


That is just the start of so many questions,


Bottom line, in the world of educational trusts someone administering these funds is going to be making a whole lot more money than the athletes.


This one is a long way from over.


Third Down: Kicked Out Of The House:


Next door to the NCAA’s house is the College Football Playoff House. That house is getting egged and the trees are getting rolled with toilet paper by Florida State fans. And it looks like there is a burning bag of dog crap on the front porch.


In setting up the 2023 season’s version of the Nick Saban/SEC Invitational Tournament the committee for the first time took a top-4 undefeated team that won their Power-5 Championship game and kicked them out of the house. Georgia got kicked out because they lost. Everyone saw that coming. They were the house guest that looked like would never leave.


Texas beat Alabama this year and had the same 12-1 record. The Longhorns showed up first with a chocolate babka while Alabama arrived second with a cinnamon babka. And even though cinnamon babka is a lesser babka, the committee decided it was worth kicking out the Seminoles to make way for a one-loss SEC team.


The Playoff committee has never been without an SEC team in the house. It just wouldn’t seem right. They’re usually deserving roommates in the playoff house. But are they the most deserving in 2023?


Florida State went 13-0. They lost their starting quarterback in their 11th game. That is why they’re getting held back. But in the two weeks without their starter, they won at Florida with their back-up. He got hurt in that game. So last week with their 3rd-team QB, FSU beat the #14 team in the country by 10 points with a dominating defensive performance and some creative play-calling.


The next day they got kicked out because the committee didn’t like the look of that win. One might ask their opinion on Alabama needing a miracle throw to win on a 4th and 31 against a team that lost to New Mexico State by 31 the week before.


The FSU players faced a Power-5 schedule in an ACC conference that went 6-4 in head-to-head matchups against the SEC. And for all the SEC boasting, they compiled a 7-9 non-conference record against the teams in the other four Power-5 conferences. (The ACC was 10-9, The Pac 12 was 7-3) The best SEC non-conference win based on the final CFP rankings, was Mississippi State’s home OT win over #14 Arizona. And Mississippi State fired their coach. I guess it does mean more.


But back to FSU. That same group of FSU players beat two SEC teams in the non-conference schedule at Florida and on a neutral field over LSU by 21 points. Those young men put everything they had into the season, they played a tough schedule and won every game. And as for the quarterback argument, the quarterback who started and won against Florida would be back for the playoff.


And the committee told those players that winning all your games isn't enough anymore.


The SEC had three swings to make their case ON THE FIELD. LSU or Florida could have beaten FSU. Alabama could have beaten Texas. If any one of those things happened Alabama is in without a controversy. The SEC missed on all three of the three pitches they needed to hit.


Apparently, they were allowed a fourth pitch to get Alabama in the side door when Florida players hit and injured FSU's 2nd-team quarterback’s head during a voluntary slide.


Fourth Down: Sent Down The Block



In 2009 Penn State played LSU in the Citrus Bowl (then the Capital One Bowl) when that stadium still had grass. A few days earlier Wisconsin and Miami had torn up the field. As torrential rain came down in biblical proportions chunks of the field started to float on the pooling water.


One of the bowl reps said to me “The good news is that next year we’ll have artificial turf.”


Not wanting to be a jerk I kept my thoughts to myself “A lot of good that does us today.” I thought. We did win the game 19-17 on a late Colin Wagner field goal from what looked like US Open at Oakmont deep rough.


So as the FSU fans hear “At least next year this won’t be a problem”, I’d say the same thing. “A lot of good that does for the FSU coaches and players now.” That's next year. This year FSU gets sent down the street to room with Georgia and others in the New Year’s Six Bowl house for the next-tier teams.


Fifth Down: Neighborhood Watch


If the college football neighborhood has a “Neighborhood Watch” it would be the service academy teams. This weekend Army and Navy play again in one of the great enduring traditions in all of sport.


What you get to witness on Saturday is two teams of future leaders competing for sixty minutes on a weekend when their game stands alone as the only game in all of FBS football. That is as it should be.


And best of all, when the game is over the two teams sing their respective Alma Maters while the other team stands by respectfully. The order of singing is determined by the outcome of the game on the field.


Ultimately the game is all about the young men on the field. And as we look at all that has happened this week, it’s one last great reminder of the core of what makes college football the best game we have in America.


After a rough week for college football today and for its future, a game like Army-Navy is just what we need to keep things in order in this neighborhood.



Looking for a Holiday Gift for the college football fans on your list? Check out Jay Paterno's two Books. The memoir "Paterno Legacy" has been an Amazon best-seller. The novel "Hot Seat" is an inside look at the pressures of big-time college football based on real-life experiences from his 22 years as a college football coach. Click Here to get more information.


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