Conference Realignment

[SkyBrickey]

What we have here is a failure to communicate. I'm connecting dots about what is happening, and you are asking me to defend it. That's not my job, especially since I didn't want this to happen --- and also. --- predicted this would be the result. So is it better to have winning football and less or no non revenue sports? YES, in this new universe. That is the new priority. Live it, learn it, love it. Welcome to NIL / portal / conference realignment USA land.

Reaping and sewing. All I'm doing is connecting the dots. You don't like how they connect. I don't blame you, but please don't accuse me of making these decisions and do not blame the messenger.

Ok let me be direct then. I disagree with your dots. The Big East has no football and lots of non-revenue sports. You seem to be making the case that the new world of NIL will force Duke ultimately to axe non-revenue sports to preserve football. Those dots don't connect for me and a lot of people.

 

[ChillinDuke]

Ok let me be direct then. I disagree with your dots. The Big East has no football and lots of non-revenue sports. You seem to be making the case that the new world of NIL will force Duke ultimately to axe non-revenue sports to preserve football. Those dots don't connect for me and a lot of people.

I don't really want to get in the middle of a back-and-forth between Sky and HBCK, but of course I will.

Let's play out a simple but presumably real-time scenario using some assumptions. Let's assume Duke Basketball pays its players (through NIL) $10mm per year, roughly $1mm per player on average. Just an assumption.

Let's also assume Arkansas pays its players $20mm per year, double what Duke does.

Now, let's assume, as seems to inarguably be the case, that there is an increasing trend where players are asking for and/or holding out for larger and larger NIL deals. Let's assume Arkansas continues to meet those asks and its budget for players continues to $25mm or $30mm or more.

How will this impact Duke Basketball, in your opinion?

Do you believe that the size of Duke's "NIL Pie" will grow via increased donations from boosters (it will not grow meaningfully from TV revenue in a contract that has already been signed)? Or do you believe the NIL Pie will just be sliced differently such that Duke Basketball will get a larger slice and other allocations will have a smaller slice of the same sized pie?

I believe that is the crux of this back-and-forth.

I, for one, do not believe the NIL Pie will get meaningfully larger. I work in finance and often hear non-finance people talk about "endless money" and that "someone will pay for it". Generalizations that are simply not true. Everything has a limit. The NIL Pie cannot and won't grow endlessly. Whether the NIL Pie can grow incrementally to keep pace in an arm's race of increasing player costs while still keeping other stakeholders' (women's swim team, e.g.) slices the same is an open question. The market for players will eventually peak and we should level out from there. But how high is anyone's guess and will Duke be able to get to that level when our TV revenues are notably smaller to begin with versus a large chunk of other schools in the SEC and B1G.

Trying to referee a bit here to keep this constructive...

- Chillin

 

[FosterCoachK82]

I don't really want to get in the middle of a back-and-forth between Sky and HBCK, but of course I will.

Let's play out a simple but presumably real-time scenario using some assumptions. Let's assume Duke Basketball pays its players (through NIL) $10mm per year, roughly $1mm per player on average. Just an assumption.

Let's also assume Arkansas pays its players $20mm per year, double what Duke does.

Now, let's assume, as seems to inarguably be the case, that there is an increasing trend where players are asking for and/or holding out for larger and larger NIL deals. Let's assume Arkansas continues to meet those asks and its budget for players continues to $25mm or $30mm or more.

How will this impact Duke Basketball, in your opinion?

Do you believe that the size of Duke's "NIL Pie" will grow via increased donations from boosters (it will not grow meaningfully from TV revenue in a contract that has already been signed)? Or do you believe the NIL Pie will just be sliced differently such that Duke Basketball will get a larger slice and other allocations will have a smaller slice of the same sized pie?

I believe that is the crux of this back-and-forth.

I, for one, do not believe the NIL Pie will get meaningfully larger. I work in finance and often hear non-finance people talk about "endless money" and that "someone will pay for it". Generalizations that are simply not true. Everything has a limit. The NIL Pie cannot and won't grow endlessly. Whether the NIL Pie can grow incrementally to keep pace in an arm's race of increasing player costs while still keeping other stakeholders' (women's swim team, e.g.) slices the same is an open question. The market for players will eventually peak and we should level out from there. But how high is anyone's guess and will Duke be able to get to that level when our TV revenues are notably smaller to begin with versus a large chunk of other schools in the SEC and B1G.

Trying to referee a bit here to keep this constructive...

- Chillin

One caveat first. Duke seems to get a discount on NIL because of our success with one-and-dones (and some say the Brotherhood).

That said, if Arkansas starts paying players, say 2 M IN NIL (just making this up for an example giving your numbers), Duke will have to decide if we match. I am confident that we won’t. We don’t have the money in the collectives, and Duke (I’m speaking loosely here accepting that money is fungible) will not want to get it from the endowment or from raising student tuition or cutting non-rev sports, although they may cut back on them somewhat. At this point Duke will no longer be able to compete at the top of the college stage in basketball.

But, this would not be forever. Surely there will be responses in the college athletics world if just a few programs are able to compete by buying up all the players. Even pro sports have a salary cap.

 

[Mtn.Devil.91.92.01.10.15]

One caveat first. Duke seems to get a discount on NIL because of our success with one-and-dones (and some say the Brotherhood).

I suspect that Duke will need to continue to put players into the first round for this to be an asset. If other schools are paying top dollar and Duke isn't, that advantage will dry up quickly. 17 year old kids aren't known for choosing "delayed gratification."

 

[FosterCoachK82]

I suspect that Duke will need to continue to put players into the first round for this to be an asset. If other schools are paying top dollar and Duke isn't, that advantage will dry up quickly. 17 year old kids aren't known for choosing "delayed gratification."

Agree. That advantage won’t last long if we can no longer draw the best players. The discount is remporary.

 

[arnie]

Ok let me be direct then. I disagree with your dots. The Big East has no football and lots of non-revenue sports. You seem to be making the case that the new world of NIL will force Duke ultimately to axe non-revenue sports to preserve football. Those dots don't connect for me and a lot of people.

I wasn't going to get in the middle either; but . . . Seems the issue won't be cutting back non-revenue sports so much, but reducing the number of scholarships and drastically reducing the costs associated with travel/equipment, etc. When I was at Duke in the 70s most of non-revenue sports were played by non-scholarship students and other costs were minimized. Football scholarships make it difficult with Title IX, but we could really slash all the men's non-revenue costs and scholarships.

Do Big East schools like Georgetown, Xavier etc. provide significant scholarships in non-revenue sports?

 

[phaedrus]

I wasn't going to get in the middle either; but . . . Seems the issue won't be cutting back non-revenue sports so much, but reducing the number of scholarships and drastically reducing the costs associated with travel/equipment, etc. When I was at Duke in the 70s most of non-revenue sports were played by non-scholarship students and other costs were minimized. Football scholarships make it difficult with Title IX, but we could really slash all the men's non-revenue costs and scholarships.

Do Big East schools like Georgetown, Xavier etc. provide significant scholarships in non-revenue sports?

I was a non-revenue athlete, and I always understood (or assumed) that top Big East schools like Georgetown had more men's scholarships to give in part because the Title IX math worked out differently for them. It was clear they had more scholarships in my sport, where Duke had only one.

 

[SkyBrickey]

I don't really want to get in the middle of a back-and-forth between Sky and HBCK, but of course I will.

Let's play out a simple but presumably real-time scenario using some assumptions. Let's assume Duke Basketball pays its players (through NIL) $10mm per year, roughly $1mm per player on average. Just an assumption.

Let's also assume Arkansas pays its players $20mm per year, double what Duke does.

Now, let's assume, as seems to inarguably be the case, that there is an increasing trend where players are asking for and/or holding out for larger and larger NIL deals. Let's assume Arkansas continues to meet those asks and its budget for players continues to $25mm or $30mm or more.

How will this impact Duke Basketball, in your opinion?

Do you believe that the size of Duke's "NIL Pie" will grow via increased donations from boosters (it will not grow meaningfully from TV revenue in a contract that has already been signed)? Or do you believe the NIL Pie will just be sliced differently such that Duke Basketball will get a larger slice and other allocations will have a smaller slice of the same sized pie?

I believe that is the crux of this back-and-forth.

I, for one, do not believe the NIL Pie will get meaningfully larger. I work in finance and often hear non-finance people talk about "endless money" and that "someone will pay for it". Generalizations that are simply not true. Everything has a limit. The NIL Pie cannot and won't grow endlessly. Whether the NIL Pie can grow incrementally to keep pace in an arm's race of increasing player costs while still keeping other stakeholders' (women's swim team, e.g.) slices the same is an open question. The market for players will eventually peak and we should level out from there. But how high is anyone's guess and will Duke be able to get to that level when our TV revenues are notably smaller to begin with versus a large chunk of other schools in the SEC and B1G.

Trying to referee a bit here to keep this constructive...

- Chillin

I appreciate you jumping in!

Where is Option C, shift the football dollars to basketball and non-rev sports?

I am in the camp that 1) our basketball team has tremendous market value and can leverage that to remain competitive, 2) our university has funded non-rev men's and women's sports for many decades and will continue to do so, 3) it may eventually become an impossible task to field a P5 competitive football team given the size/limitations of our fanbase.

 

[dlmzzz]

I...do not believe the NIL Pie will get meaningfully larger. The NIL Pie cannot and won't grow endlessly. The market for players will eventually peak and we should level out from there.

- Chillin

I think the NIL pie will get meaningfully larger, for two reasons.

First, it is (or will become) the most significant change to the hierarchy of college sports in our lifetimes. Jay Wright said (paraphrasing), "The era of the blue bloods is over." You listed Arkansas as the big money player in college basketball. They recently went through a 20 year drought of NCAA tournament appearances. BYU was mentioned recently as the likely landing spot for AJ Dybantsa, the #1 prospect in the 2025 class, with an NIL deal projected to be in the $3-5M range. There are so many schools who have not been able to compete at the highest levels of player acquisition, and now have a chance to do so. As one billionaire tires of the game, another will get excited about the chance to put their school on the map.

Second, corporate sponsorships can start to matter. FedEx already has their name on the building (FedExForum) where Memphis plays, so funding their NIL program just made sense. You're literally driving traffic to a huge advertisement you already decided to make. I see no reason why this won't get repeated.

 

[ChillinDuke]

I appreciate you jumping in!

Where is Option C, shift the football dollars to basketball and non-rev sports?

I am in the camp that 1) our basketball team has tremendous market value and can leverage that to remain competitive, 2) our university has funded non-rev men's and women's sports for many decades and will continue to do so, 3) it may eventually become an impossible task to field a P5 competitive football team given the size/limitations of our fanbase.

I note that you didn't explicitly take a stance on the NIL Pie getting larger or not. "Shifting football dollars" is the equivalent of the NIL Pie not getting larger but giving football a smaller slice of pie and giving basketball a larger slice. This should, in a vacuum, reduce the competitiveness of our football team which has downstream repercussions, again in a vacuum, where we likely don't land in the B1G or SEC if the ACC implodes and thereby effectively lose a significant amount of revenue for our sports teams in the future. What happens then?

I agree with your #1, but it's kind of a throwaway line. How will we leverage it to remain competitive? We presumably already leverage it today, which makes it table stakes. Will we leverage it further to grow the NIL Pie?

The first part of #2 is obviously true but the second part means nothing when none of those many decades included NIL and the speed of change we're witnessing today. Why and how will we continue to do so?

I definitely share your opinion on #3. But my personal hope is that if the ACC implodes we don't reallocate any incremental dollars away from football, try to remain competitive enough (close to last year) to garner attention from B1G (or SEC, bleh) based on our strong basketball brand and [hopefully passable] football performance. If the ACC doesn't implode, I hope it's because we outlasted the B12 and poached their strongest programs at the end of this decade to create the clear 3rd strongest conference to renegotiate our TV deal in early 2030s - and grow our NIL Pie that way.

- Chillin

 

[ChillinDuke]

I think the NIL pie will get meaningfully larger, for two reasons.

First, it is (or will become) the most significant change to the hierarchy of college sports in our lifetimes. Jay Wright said (paraphrasing), "The era of the blue bloods is over." You listed Arkansas as the big money player in college basketball. They recently went through a 20 year drought of NCAA tournament appearances. BYU was mentioned recently as the likely landing spot for AJ Dybantsa, the #1 prospect in the 2025 class, with an NIL deal projected to be in the $3-5M range. There are so many schools who have not been able to compete at the highest levels of player acquisition, and now have a chance to do so. As one billionaire tires of the game, another will get excited about the chance to put their school on the map.

Second, corporate sponsorships can start to matter. FedEx already has their name on the building (FedExForum) where Memphis plays, so funding their NIL program just made sense. You're literally driving traffic to a huge advertisement you already decided to make. I see no reason why this won't get repeated.

I'm not sure how your "first" proves the NIL Pie will get meaningfully larger at Duke. By NIL Pie, I mean the amount of money we have to spend on our collective sports programs. Are you implying that some billionaire will get excited about Duke at some point and pump up our NIL Pie? Only to become disinterested at some future date and deflate our NIL Pie?

Your "second" doesn't really track with me for a few reasons.

#1 - we already have corporate sponsorships. Everyone does. That's table stakes. So we would have to expand our corporate sponsorships more than every other program in order to "outrun" other schools' NIL Pie growth.
#2 - our biggest asset is Duke Basketball. Do we really think we will rename Cameron Indoor Stadium the Stride Rite's Cameron Indoor Stadium. I think over Duke's dead body. So the only route would be expanding and increasing the cost of our in-stadium marketing, which I'm sure we already try to maximize right now. We'd be silly not to.
#3 - our football asset is weaker than most others. So most other programs can outrun us by further leveraging their football stadium marketing dollars versus what we can do.

I sincerely hope our NIL Pie does get meaningfully larger. I don't see it happening, but it's certainly possible. My best hope is that we get floated by some wealthy donors for the next ~5 years (wealthy donors in line with other programs' wealthy donors) so that we tread water long enough to poach B12 schools when their contract is near renegotiation.

- Chillin

 

[Maged]

I still hope Duke ends up in the Big 12. I'd love to play home and homes with Kansas and I personally enjoy watching Big 12 basketball more than any other conference (Big 10 is unwatchable IMO).

Anyone who doesn't see the benefits to big time football for Duke wasn't as excited for the Clemson and ND games last season as I was. It appeared to me that those were the most exciting events at Duke since the 2015 national championship almost a decade ago. And that was for a borderline top 25 team. I want Duke to continue to compete and hope it improves its status in the football arena.

 

[phaedrus]

Do we really think we will rename Cameron Indoor Stadium the Stride Rite's Cameron Indoor Stadium. I think over Duke's dead body.

Ok, but how about "Cameron International Corporation, A Schlumberger Company, Indoor Stadium"?

 

[SkyBrickey]

I still hope Duke ends up in the Big 12. I'd love to play home and homes with Kansas and I personally enjoy watching Big 12 basketball more than any other conference (Big 10 is unwatchable IMO).

Anyone who doesn't see the benefits to big time football for Duke wasn't as excited for the Clemson and ND games last season as I was. It appeared to me that those were the most exciting events at Duke since the 2015 national championship almost a decade ago. And that was for a borderline top 25 team. I want Duke to continue to compete and hope it improves its status in the football arena.

Good post. Just to be clear, I want our football team to live on and be competitive. These big games are so much fun.

But I'm not a fan of cutting longterm non-rev sports in order to add incremental dollars to our football "NIL salaries". If it ever comes down to a binary choice, I vote to keep the non-rev sports and do the best with whatever football dollars we have based on whatever TV contracts are available. I respect that others would feel differently. It's not an easy decision if we ever face it...

The only think I took issue with with HBCK is his position that it's inevitable that we cut non-rev sports. It might happen but it's not inevitable. There are other options.

 

[Phredd3]

But I'm not a fan of cutting longterm non-rev sports in order to add incremental dollars to our football "NIL salaries".

I'm confused by this entire line of thinking. I realize that a court in Virginia said that schools could pay players. Does that ruling apply to anyone else? Even if it somehow does, is there any word anywhere of a school that is actually doing this? The TV revenue still goes directly to schools, so Duke is going to be getting ACC payouts up to the time the ACC ceases to exist or until the TV rights are renegotiated, whichever comes first. But is there any indication that Duke is intending to pay players with that payout?

If not, I can't see how schools will be forced to cut non-revenue sports to pay for football. Yeah, money is fungible and all that, and perhaps some of the Iron Duke money goes away as donors contribute to collectives instead? Maybe? But for the most part as I understand it, as of now, NIL is still not tied to the actual revenue schools receive.

Am I missing something?

 

[sagegrouse]

On another point made above, Duke Pres. Price has stated that endorsing scholarships is a primary aim of development. Duke athletics has many times stated this is a priority as well.

"Endowing," not "endorsing."

 

[SkyBrickey]

I'm confused by this entire line of thinking. I realize that a court in Virginia said that schools could pay players. Does that ruling apply to anyone else? Even if it somehow does, is there any word anywhere of a school that is actually doing this? The TV revenue still goes directly to schools, so Duke is going to be getting ACC payouts up to the time the ACC ceases to exist or until the TV rights are renegotiated, whichever comes first. But is there any indication that Duke is intending to pay players with that payout?

If not, I can't see how schools will be forced to cut non-revenue sports to pay for football. Yeah, money is fungible and all that, and perhaps some of the Iron Duke money goes away as donors contribute to collectives instead? Maybe? But for the most part as I understand it, as of now, NIL is still not tied to the actual revenue schools receive.

Am I missing something?

I agree with you. You can look back up at the debate higher in the thread. I think the opposing argument is twofold. Even today, the money is fungible. And down the road, with the revenue-sharing settlements, all schools will be paying the athletes directly.

I do think the tension between rev and non-rev sports is likely to grow. I'm just not convinced it will result in the cutting of the non-rev sports.

 

[dlmzzz]

I'm not sure how your "first" proves the NIL Pie will get meaningfully larger at Duke. By NIL Pie, I mean the amount of money we have to spend on our collective sports programs. Are you implying that some billionaire will get excited about Duke at some point and pump up our NIL Pie? Only to become disinterested at some future date and deflate our NIL Pie?

Your "second" doesn't really track with me for a few reasons.

#1 - we already have corporate sponsorships. Everyone does. That's table stakes. So we would have to expand our corporate sponsorships more than every other program in order to "outrun" other schools' NIL Pie growth.
#2 - our biggest asset is Duke Basketball. Do we really think we will rename Cameron Indoor Stadium the Stride Rite's Cameron Indoor Stadium. I think over Duke's dead body. So the only route would be expanding and increasing the cost of our in-stadium marketing, which I'm sure we already try to maximize right now. We'd be silly not to.
#3 - our football asset is weaker than most others. So most other programs can outrun us by further leveraging their football stadium marketing dollars versus what we can do.

I sincerely hope our NIL Pie does get meaningfully larger. I don't see it happening, but it's certainly possible. My best hope is that we get floated by some wealthy donors for the next ~5 years (wealthy donors in line with other programs' wealthy donors) so that we tread water long enough to poach B12 schools when their contract is near renegotiation.

- Chillin

Sorry, it sounds like I misunderstood you when you said "The NIL Pie cannot and won't grow endlessly". I was commenting on the general NIL pie more than the Duke NIL pie. I don't think we're that close to the point where the growth will slow down. The biggest NIL agreements we heard about this year were around $2M for a college basketball player, and we're already hearing that the top college basketball prospect next year is expecting double that.

I was also expressing that the growth of NIL is beyond the conferences with the big payouts (SEC, B1G) with my examples of BYU and Memphis.

 

[Pghdukie]

Will "Student/Athletes be subjected to local tax laws ? IE, you earned x no of $$$ when you played in X city ?

 

[FosterCoachK82]

Will "Student/Athletes be subjected to local tax laws ? IE, you earned x no of $$$ when you played in X city ?

Great question. Technically they are not paid to play so I would think their taxes would be owed wherever their NIL money comes from. But I’m guessing they will all need an accountant.