Idaho State University athletics likely to help pay legal liabilities of power conference schools

Only in the world of collegiate athletics does this make sense:

Small athletic departments that never generated much revenue anyway are likely going to be helping to pay the legal liabilities of large athletic departments that managed to generate and spend hundreds of millions of dollars a year.

Those liabilities will be paid to athletes who played at the larger athletic departments, most of which never set foot anywhere near those smaller schools that will be helping to cover the bill.

I know all of that is confusing, but what it comes down to for Idaho State University is this:

The ISU athletic department is likely going to be hit with an estimated $250,000 to $300,000 a year bill for the next ten years (a total of between $2.5 million and $3 million) to help bail out its power conference brethren.

That’s the bottom line of the legal settlement the NCAA and its power conferences are hoping to finalize in a class action lawsuit brought by former athletes who say they were illegally denied the right to earn money through the use of their name, image and likeness.

If the settlement is approved by the federal judge hearing the class action lawsuit, the NCAA and its member schools will be on the hook for $2.7 billion in damages to be paid to former athletes. As part of the process to generate that money, 27 NCAA-affiliated leagues that were not part of the lawsuit will be required to chip into the damage fund through withheld NCAA revenues over the next decade. The Big Sky Conference, which both Idaho State and the University of Idaho are members of, is one of those 27 leagues that will lose revenue.

“So Idaho State is going to pay approximately $2.5 to $3 million to student athletes we don’t know, from revenue we didn’t get, over the next 10 years,” said ISU Athletic Director Pauline Thiros.

Thiros expects that loss of revenue will significantly impact many smaller athletic departments around the Big Sky and the nation, some of which will be forced to cut sports or positions within their athletic departments. She is determined, however, not to let it significantly damage the ISU athletic department.

“A lot of schools at our level will make dramatic cuts to come up with that,” Thiros said. “How did we manage during COVID? We had to make cuts. But I’m not really willing to do that — to cut money from our student -athletes to pay student-athletes we don’t know for a liability we didn’t create. I’m very committed to replacing that revenue. It’s going to be through attendance. It’s going to be through fundraising. ... We’re going to balance our budget. We’re going to find it, but we have five weeks until our budget year starts. Our budget was planned, committed and submitted, so in a lot of ways, we’re going to have to go back to the drawing board.”

While $250,000 to $300,000 a year is a relatively small nick in ISU’s annual $12.5 million athletic department budget, it represents another financial stress on a department that just has to keep ducking new financial sucker punches thrown its way by the changing collegiate athletic landscape.

A few years ago, the NCAA approved the payment of “cost of attendance” stipends to athletes to reimburse them for things not normally covered by an athletic scholarship, like round-trip travel during breaks in the school year. It’s not a mandatory expense, but ISU has used cost of attendance stipends as a recruiting tool for some of its athletes in some sports.

Then came along the transfer portal and the attendant changes in eligibility rules, which now essentially allow college athletes to transfer every year if they desire and to be immediately eligible. The ISU women’s basketball team lost nine players to the portal two years ago, the men seven after this most recent season. Replacing all those athletes is a costly process — ISU has to cover the cost of coaches going on the road to evaluate potential recruits and to start creating a relationship with recruits and their family. Then they have to pay for visits to campus by those recruits who are most interested in signing. Not every recruit who visits winds up committing, so it might take three or four paid visits to fill one or two empty roster spots.

The more transfers you experience in a given year, the higher the recruiting bill.

Finally, there is the development of name, image and likeness payments to athletes. The changes in NIL rules allow athletes to essentially earn money by endorsing products, participating in promotional activities or performing other duties as determined by the NIL sponsor. Most power conference schools have “collectives” that raise and distribute money to athletes at the schools of their choice. Power conference schools often raise and distribute millions of dollars each year to athletes.

A collective devoted to Idaho State athletics was just recently formed. The collective is operated separately from the ISU athletic department, and is a relatively small endeavor at this juncture — raising perhaps $50,000 to $100,000, according to Thiros. But it is another competing mouth among many ISU mouths looking for food. There is a limited number of donors to Idaho State causes, with limited bankrolls.

When I asked Thiros how many of the ISU basketball players who went into the portal found the pot of gold they were hoping for, she responded in general terms.

“There are always student-athletes getting into the portal looking for money and don’t find it,” she said. “And there are student-athletes who get into the portal looking for money and they do. It’s a complete gamble and it’s very unpredictable. Sometimes it’s good to be the earliest guy in the portal and sometimes, trust me, it’s good to be the last. ... On average, we found that most of our student-athletes (who went into the portal) made lateral moves. I don’t know that their financial situation improved dramatically, or I don’t know that their playing time situation will improve at all. But they have that freedom to move around and ultimately they made choices they felt were good for them.”

So ISU has seen the cost of doing athletic business rise on a number of fronts − increased recruiting costs, providing cost of attendance stipends and at least getting into the NIL game. Now, the power conference schools are also going to have the option of “revenue sharing” with their athletes — providing a piece of the television and ticket revenue piece to their athletes. Just a few years ago, providing anything to athletes over and above scholarship-related funding was strictly forbidden.

Revenue sharing won’t be mandatory, however, and that’s a good thing for small schools like ISU, which already significantly subsidize its athletic programs with state funds and student fees. Even in a good year with strong attendance at ISU football and basketball games, there is very little “revenue” to share with athletes after the expenses are paid.

“You’re not going to see schools like us with revenue to distribute and share for a very long time. And maybe not ever,” Thiros said. “We may separate into a different division. I think that’s a possibility that we will have a different model that is much more similar to the spirit of amateur sports in the NCAA that we’ve been accustomed to in the past.”

Unfortunately, the culture changes in collegiate athletics are not just about dollars and sense. Thiros, who played volleyball at Idaho State in the 1990s, talked about the lifelong friendships she made with teammates after competing together for four or five years. Her daughter Zoe, who just graduated after a five-year career at Gonzaga, had the same experience.

“Kids don’t build that anymore,” Thiros said. “They don’t feel it. They don’t even know what it’s like because in some cases, they might come into a collegiate program and they might not have played on the same club team or high school for four years. So many of those things that we experienced that we really value are becoming relics in this model.”

Fortunately, Idaho State and its Big Sky Conference cohorts seem to be at least a bit shielded from the financial craziness that has almost completely overtaken the power conference schools.

“It feels like a luxury to be in the Big Sky Conference and at this level, because even though it’s harder than ever, it still feels like we are committed to that mission (of academics first),” Thiros said. “We’re going to keep slugging. If it means bringing sophomores into our program with three years of eligibility left, or more kids with two, it’s something we’re going to try.”

But then pausing to reflect on all the dramatic changes that have occurred in college athletics in the last five years, Thiros added a warning that nothing is guaranteed.

“The fiscal pressures are mounting and managing them is a huge challenge, and to still provide access to kids in Idaho who can get an education paid for through their skills and talents, playing a sport,” she said. “We’re ultimately going to limit those opportunities or make them not as attractive in time in states and schools like ours. I think the trickle-down effect on communities and kids and higher education is an unintended negative one because of what’s happening at higher levels. ...To me, our mission is fundamentally changing.”

Brad Bugger has been observing athletics in southeastern Idaho for 45 years as a sports writer, broadcaster and fan. He can be reached at bpbugger@gmail.com.