WEST LAFAYETTE — Purdue athletic director Mike Bobinski is settling in for one final year of business as usual in college sports — and preparing for a major shift.
In 2025, a new financial model arrives due to the House vs. NCAA settlement and other ongoing litigation. That settlement, if finalized, will allow teams to begin directly paying athletes 22% of the average Power 5 program’s revenues. That pool of over $20 million will increase in the second and third years, then be reevaluated.
Where does Purdue, with annual revenues of around $120 million, find another $20 million? Bobinski told IndyStar last week final decisions have not been made. However, he does not consider the most drastic step — reducing the number of teams or sports offered — a viable solution.
INSIDER: Revenue sharing is coming, and IU Athletics is ready.
DOYEL: The NCAA is weak, the Power 5 is greedy, and the smaller conferences are paying the price.
“Because we’re so lean, there’s just not a lot of opportunity — I can’t solve the problem through that," Bobinski said. “So it really doesn’t make sense to have that be part of your initial plan to how you’re going to deal with this.
“That doesn’t mean that, as time goes by, things just become so challenging that you have no choice but to somehow, some way adjust how you compete in certain sports or not compete in certain sports. That would be on the table, certainly. But it wouldn’t be my suggestion for a first option.”
Purdue's efficient plan
Purdue offers 20 varsity sports, counting both indoor and outdoor track and field and not counting spirit squad. For the 2022-23 fiscal year — the last year for which data is available — only football and men’s basketball turned a profit. As with most schools, those programs — especially football — turned such a profit the athletic department finished comfortably in the black.
Programs of all sizes across the country face the same dilemma as they brace for paying athletes:
Purdue Athletics, though, has always practiced fiscal prudence. Northwestern is the only Big Ten program offering fewer sports programs. It financed recent facility projects with donations, not new debt. The budget does not contain much bloat.
Also, about 35% of the athletic department’s expenses go to football and men’s basketball — the two sports whose revenue funds the entire program. Both men’s and women’s tennis combined, for instance, accounted for $1.7 million in expenses — about 1.4% of the budget. Other than core programs women’s basketball and volleyball, no other sport accounted for even 2% of the department’s expenses.
Purdue, though, also has already maxed out some of those primary revenue sources.
Football and men’s basketball accounted for all but 4% of the program’s $18.1 million in ticket sales in 2022-23. Bobinski said men’s basketball and volleyball both sell out their season ticket allotment. He said football was at approximately 97% capacity on season tickets as of last week.
Passing some of the cost of directly paying players on to fans may be inevitable.
"There’s not a lot of unsold seats where you’ll fill those up and that will do it,” Bobinski said. “So it’s pricing adjustments as time goes by to try to generate some more revenue. It’s being aggressive with our Learfield partnership through Purdue Sports Properties and maybe driving some additional revenue there. It’s philanthropy — being more connected with our alumni base."
Other solutions
This problem will not be Bobinski’s alone to solve, however. He said President Mung Chiang and the Board of Trustees are both aware the relationship between the athletic department and the university will change in this new era.
Purdue has not charged a student fee for athletics, nor does it take direct financial support from the university. Athletics also has given money to the university for years as part of its annual budget.
Media rights accounted for nearly $48 million of the $124.2 million in revenues Purdue cited in its NCAA financial report for 2022-23. That income source will continue to rise, thanks to the new Big Ten broadcast deal and a new College Football Playoff deal. Correlating expenses will also rise, specifically additional travel to California and the Pacific Northwest for conference games.
Also, the $2.8 billion the NCAA itself must pay as part of the House settlement is expected to show up in decreased payments to member schools. Purdue claimed $4.5 million in NCAA distributions in 2022-23. Bobinski said he expects to lose $1.2-1.3 million of that distribution for the foreseeable future.
Bobinski likened the financial hit of paying players to the one COVID-19 made on athletic budgets in 2020, but with one key difference — this one’s permanent. The pandemic could be managed in the short term with normal income levels on the horizon. The new athletic budget will require new ways of thinking.
“I feel confident that we’ll get there,” Bobinski said. “It’s just a matter of how we ultimately organize it and structure it.”
Follow IndyStar Purdue Insider Nathan Baird on X at @nwbaird.
This article originally appeared on Indianapolis Star: Cutting sports not Purdue's 'first option,' but creativity, efficiency needed in order to pay athletes
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