News Summary
The University of Tennessee is set to launch a new revenue-sharing program for athletes in 2025, providing direct payments and aiming to revolutionize collegiate sports funding. The initiative, approved following a federal settlement against the NCAA, allows member schools to allocate significant annual funds to student-athletes. While football will see the largest share, the program aims to be equitable across different sports. Additionally, the university plans to raise ticket prices to fund the initiative. Compliance with Title IX and the implications for gender equity remain under scrutiny.
KNOXVILLE, TENNESSEE — The University of Tennessee (UT) is set to implement a groundbreaking revenue-sharing program for its athletes, beginning on July 1, 2025. This initiative allows the university to provide direct revenue payments to student-athletes, marking a significant shift in collegiate sports funding. The approval stems from a settlement reached by the House on June 6, which resolved three federal antitrust lawsuits against the NCAA and four major conferences: the Atlantic Coast Conference (ACC), Big Ten, Big 12, and Southeastern Conference (SEC).
Under this new model, NCAA member schools that opt-in can allocate up to approximately $20.5 million annually to their athletes. This amount represents 22% of the average revenue generated by power conference schools from ticket sales, media rights, and sponsorships. The cap will increase each year. While the overall cap is set at $20.5 million, for many institutions, the effective budget will be around $18 million due to $2.5 million being designated for the creation of new scholarships aimed at expanding roster limits. These additional scholarships are expected to attract talent in less lucrative sports such as baseball, soccer, swimming, and track.
Distribution of revenue will largely favor football players, who are projected to receive 75% of the earnings. Men’s basketball players are expected to receive 15%, while women’s basketball and other sports will each receive around 5%. The exact allocation will be determined by the revenue generated by each sport, allowing schools to tailor payments based on their specific circumstances.
Another aspect of this initiative is that athletes will still have the opportunity to earn income through Name, Image, and Likeness (NIL) agreements, funded by external businesses and third-party collectives. This flexibility provides additional financial avenues for student-athletes eager to boost their earnings while participating in college sports.
As the University of Tennessee introduces this revenue-sharing program, financial implications for the athletic department are significant. The UT athletic department reported $202 million in revenue against $191 million in expenses during the 2022-2023 fiscal year. The new revenue-sharing model will necessitate careful budget management, prompting schools to consider potential cost cuts elsewhere or even staff reductions to accommodate these new financial obligations.
To help fund the revenue-sharing pool, the university will raise ticket prices, implementing a “talent fee” that sees a 14.5% increase on football ticket prices effective in 2025. Season ticket renewals are set to begin next week, with student ticket prices additionally climbing from $20 to $25.
Legal challenges are anticipated as discrepancies regarding compliance with Title IX may arise. There is a growing concern that revenue sharing should reflect a more equitable approach between male and female athletes, considering the financial disparities in revenue generation across sports.
The NCAA will take a step back in regulating revenue sharing and NIL arrangements, focusing instead on eligibility and academic matters. To ensure compliance with the new compensation rules, a newly formed enforcement body, the College Sports Commission, will oversee the implementation of revenue sharing.
Although athletes may pursue multi-year contracts regarding revenue sharing, initial agreements are expected to be limited to one year. This provision allows institutions to assess the effectiveness of the program while adapting to the rapidly evolving landscape of collegiate athletics.
Despite the complexities involved in implementing this revenue-sharing strategy, officials at the University of Tennessee are committed to positioning the institution as a leader in equitable athlete compensation. As stakeholders navigate this new terrain, fans and supporters of collegiate sports will be closely monitoring how these changes will benefit athletes across all sports disciplines.
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Additional Resources
- Knox News: Tennessee NIL Pay Players Revenue Sharing
- Sportico: Tennessee Football Ticket Fee
- Front Office Sports: Tennessee Ticket Surcharge
- CNBC: Tennessee to Raise Season Ticket Prices
- Knox News: Tennessee Athletics Revenue Sharing and Gender Equity
- Wikipedia: Revenue Sharing
- Google Search: Collegiate Athletics Revenue Sharing
- Google Scholar: College Athletics NIL
- Encyclopedia Britannica: College Athletics
- Google News: Tennessee Athletics Revenue Sharing
