With a potentially new era of college athletics set to start in July 2025 with revenue sharing, Tennessee and athletic departments around the country are preparing for the added cost of doing business in sports.
The proposed House case settlement calls for an increase in scholarships, as well as revenue to student athletes, at a total cost of somewhere around $35 million for some Power 4 schools.
To help with the increase in costs, Tennessee is generating additional revenue by adding a 10% talent fee on all season ticket invoices, athletic director Danny White announced via email to season-ticket holders on Tuesday. The revenue generated from the tax will serve as a small percentage revenue stream for the additional costs created by revenue sharing.
“You’ve heard me say before, resources lead to championships,” White told Volquest last month in a sit down interview. “There has to be a correlation between what our expectations are and how we’re resourcing our programs. And there’s been historically you want to have the best facilities and we’re in the process of getting back to that place. You need to have the best coaches that costs money. You have the best student athlete experience that costs money.
“There’s a lot of things that we’ve done and we will continue to do that are probably inefficient ways financially to create competitive advantages. Now with NIL and revenue share, there’s a pretty efficient way to create competitive advantages, but it’s obviously even more resource.”
Those resources mean more expenses in areas of every sport. To help with those costs, White informed season ticket holders that there will be a moderate, per-seat price increase – averaging 4.5 percent across the stadium.
In addition to generating revenue growth through areas like corporate partnerships and television revenue, White and his staff are also looking at areas where there could be a reduction on expenses that wouldn’t affect the investment in winning in every sport across the board.
“I mean it was always going to continue to get more expensive,” White said. “Everything does. But that correlation between competitiveness and resource is even tighter than it ever was before which makes me feel great to be at the University of Tennessee with our fan base.
“I think we’re up to number six right now in operating budget from somewhere around 30 a few years ago. And I think we can shoot all the way to the top. We got the best fans in the country.”
Since the arrival of NIL, college leaders have called for guardrails. Some have advocated that revenue sharing through the university is the only avenue to go. All the while, the uncertainties of what’s next and the ever evolving changing policies – because of litigation – have made things challenging.
“We need to be more proactive as an industry and accept the realities of where we are and come up with some rational, just common sense plans and guardrails around all things NIL revenue sharing, whatever you want to call it,” White said
“These kids deserve a piece of the pie, some of the resources they always have. It’s great that they’re getting that now, but we have way too many people nationally with their head in the sand and trying to fight an old set of beliefs that just not relevant anymore. So I’m not impressed with how we as an industry handled the last year. Maybe we can do better this coming year in getting closer to what I’d call a modernized, actually organized format for the future of college sports.”
The frustrations for finding that format continues to grow as the uncertainties remain. As of now, it’s unclear if there will be changes in scholarship numbers for 2025 or if there will be revenue sharing to student athletics. But White’s job, along with AD’s all over the country, is to have a plan.
“For people that do what I do and for our coaches, it’s a 365 day a year problem,” White stated. “I don’t know if there’s ever been a time as hard as it is right now to work in college sports. And we went from Covid to this legal stuff and the lack of leadership at the NCAA from the onset and the lack of real direction from anybody has put us all in where it’s a moving target.”
Season ticket renewals start today (Sept. 17th) and run through the end of February.
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