U of A may now have to pay athletes $20 million annually amid college sports restructuring

Just three months after taking over an athletic department wracked internally with financial challenges, University of Arizona Athletic Director Desireé Reed-Francois received an external shock this week that could dramatically change college sports — including at Arizona — for the long term.

When the NCAA and its five power conferences voted to approve settlement terms for three landmark antitrust cases involving student-athlete compensation, Arizona instantly became expected to figure out how to pay about $20 million annually to its athletes in future seasons.

That $20 million, the maximum schools will be allowed to pay under a revenue-sharing component of the settlement, represents nearly 15% of Arizona’s annual athletics budget. UA reported expenses of $137 million and revenues of $139 million in 2022-23, according to a U.S. Department of Education database.

At the same time, Arizona will be impacted to some degree by a collective back-payment to athletes who competed at schools across the country from 2016 to 2022, the year that the NCAA began allowing athletes to profit from their name, image and likeness.

Athletes who competed in those years will be compensated a total of $2.75 billion for their lost opportunities with money from the NCAA’s reserves and from subtractions in the amount the NCAA normally passes on to conferences, which, in turn, pass much of that revenue to member schools.

Already, Arizona has been in the process of dealing with roughly $86 million in loans from the school it has not paid back, a responsibility that Reed-Francois shouldered with optimism after being hired in February to oversee the UA’s athletic department.

She indicated the same sort of sentiment in a statement issued late Thursday afternoon, saying that UA “has been strategizing and preparing for months to build a modern college athletics model that is adaptive to change and supports our student-athletes.

“We are embracing this newest challenge as an opportunity,” Reed-Francois said. “Our athletics department will continue to work hard to make the Wildcat family proud.”

Neither Reed-Francois nor UA President Robert Robbins could be reached for comment through their representatives Friday, so it was unclear what the model may be.

But at Arizona State University, president Michael Crow indicated to Chris Karpman of Sun Devil Source that Sun Devils athletics is becoming less of a stand-alone entity. Crow said an estimated $300 million owed by ASU’s athletic department to the school has been eliminated, while saying the athletic department will not have to worry about covering all of its fixed costs, as with other university departments.

“It’s not an auxiliary enterprise anymore,” Crow said of ASU athletics, according to Sun Devil Source. “It’s in the core of the enterprise of ASU itself. We’ve changed the financial model that’s going to allow our athletic department to focus on victory and success of our student-athletes academically and athletically. The rest of our university is going to worry about the rest of our financial issues.”

If UA is considering a similar model, it isn’t clear. Asked what Reed-Francois’ model referred to, UA spokesman Mitch Zak told the Arizona Daily Star the details weren’t known yet but added that it was an opportunity “to drive donations” while staying focused on competitive excellence.

“We are prepared for a wide variety of scenarios,” Zak said. “It may be hard to plan, but not hard to be prepared. Everything is an opportunity. We’re focused on how can we plan to embrace it.”

Among the many questions are how the $20 million in payments to athletes would be distributed, and whether they would be proportional to their team’s media rights income or more equally distributed — and what role Title IX would have, if any.

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In 2022-23, Arizona reported a $11.7 million net profit for football and a $10.4 million profit for men’s basketball with all other sports operating in the red. UA reported a $3.9 million loss for women’s basketball and $9.28 million loss for all other women’s sports, while all men’s sports other than football and basketball lost a combined $8.8 million.

Title IX is a federal law that prohibits sex discrimination in any school or education program that receives federal funds, though it isn’t clear if the law would apply to payments or just participation opportunities in college sports.

Sam Elrich, a Boise State University sports law professor, said it was difficult to say what might happen because there hasn’t been a court ruling or guidance from the Department of Education to address one way or another if Title IX would affect payments.

“It’s an unprecedented situation, and one without any real comparison which makes it really hard to predict,” Elrich wrote in an email to the Star. “Title IX is pretty explicitly tied to ‘education programs’ so that’s one argument to say that it wouldn’t apply, but I’ve also seen case law saying that medical residents who function as both students and employees of a teaching hospital are still covered under Title IX despite employment status and a paycheck.

“All in all, the statutory text of Title IX is so broad it’s hard to rule out anything tied to student status or an educational program broadly not being covered, but this does feel like it’s stretching the definition of ‘education program’ pretty broadly.”

Whatever happens, it’s another step toward more college athlete compensation, a trend Reed-Francois has already shown support for.

Just a year ago, then as Missouri’s athletic director, Reed-Francois appeared in Washington, D.C., at a UA-sponsored summit called the Future of College Sports. Sitting on a podium along with then-UA women’s basketball player Maya Nnaji, Reed-Francois spoke of NIL regulations, telling a story of how they benefited one Missouri athlete who used the money to help his mother pay an electricity bill.

“There’s so much great about this,” Reed-Francois said then. “There’s so much being done. We have 550 student-athletes at Missouri. We now have 550 entrepreneurs if they want to take advantage of that.

“Yes, there are challenges and we all have a to-do list. Let’s put our heads together. Let’s figure this out.”

Now there’s even more to figure out. For Arizona, and for the rest of a rapidly changing college sports landscape.

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<&rdpEm>Arizona Daily Star reporter Ellie Wolfe contributed to this report.</&rdpEm>

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