MAILBAG: So what are schools spending money on now?

Good morning, and thanks for spending part of your day with Extra Points.

I’m headed to Washington, D.C. (okay fiiiine, Maryland), tomorrow for the NCAA convention. Kyle Rowland of NIL Wire and I will be around until Thursday evening, and we’d love to say hello and chat! If you’d like to meet up, shoot me an email. We are also hosting a happy hour with College Sports Solutions at 8 p.m. on Wednesday at the Belvedere Lobby Bar. No RSVP is required, so feel free to join us for some beverages and off-the-record conversations.

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Since I’m flying Tuesday morning and will be out and about, I figured today would be a good day to open the ol’ mailbag and answer your questions. As always, mailbag questions are accepted on a rolling basis via email, Bluesky, texting, etc.

Reader CJ asks:

There are a few!

Some NCAA-sponsored sports adding plenty of new teams at the moment include beach volleyball, STUNT, women’s wrestling and lacrosse. These sports don’t typically require as much in the way of startup costs (you don’t need to build a new facility for a women’s wrestling program, after all), have growing high school and club participation levels and can provide a lower-cost way for schools to comply with Title IX sport sponsorship requirements.

Usually, if a school is adding sports, it’s because it is more focused on enrollment-related goals and/or Title IX/conference sport sponsorship requirements, rather than competitive excellence or ticket revenue generation. So sports that don’t require lots of supporting infrastructure and have access to enough recruits will always be attractive. That’s also why it is generally harder to add sports like hockey or baseball, since those tend to require more expensive infrastructure supports.

Across the country, and especially at the small school level, you also sometimes see growth in sport sponsorship that exists completely outside the NCAA. Examples of those sports include rugby, esports, ultimate frisbee and women’s flag football. Some of these may eventually fall under the purview of the NCAA … and some may not!

Speaking of spending money, reader Domo asks

Well … I think that depends on how you define “cutting back.”

It’s true that in Ye Olden Times (i.e., before 2020), it was common for schools to spend money on gold-plating locker rooms, practice facilities, meeting rooms and stadiums, all in the hope of improving recruiting outcomes. If you couldn’t directly give cash to athletes, the thinking was, you could woo them with sleep pods and podcasting studios and Big Buck Hunter arcade cabinets.

But if you want to play Big Buck Hunter, you don’t need to go to a school with a machine in the locker room. You don’t even need to go to Dave and Busters. You can just buy a machine yourself, thanks to cash. And schools, be it via officially sanctioned House payments or whatever we’re pretending marketing deals are, can now give athletes that cash directly.

I’ve heard of a few Power 4 programs that have either postponed or scaled back previously planned facility investments that would fall under this category so they can spend that money directly paying athletes (as well as other stuff). Personally, I think that’s a better investment anyway.

But not every facility investment is “turning the film room into a go-kart track.” Schools also spend money on facilities to do mundane stuff like “keep stadiums built in 1927 at least kinda up to modern building codes” or “add Wi-Fi” or “replace bleachers with actual chairs.”

In fact, because of this crushing need to grow revenue at every level, many programs are looking at spending more on facilities … to help their stadiums better monetize their audience. That means more luxury boxes, more high-end concessions, more bathrooms (so you can serve more booze), more parking and more experiences. Conspicuously absent from that list, of course, is more seating. Usually, capacity is getting smaller, not larger.

So I wouldn’t look for facility improvements or spending to bottom out in the near future. Schools are just going to spend on different things. The driving question at most programs right now is “how can we drive more revenue from our existing fans, corporate partners and real estate footprint?” … and the answer sometimes requires building more stuff.

Reader Josh asks:

Sure, I think that could happen. I’ve talked to some mid-major athletic directors and coaches who would explicitly prefer for that to happen (as a way for their schools to get some sort of long-term benefit for developing high school players who won’t stay), and I understand why lawyers, agents and reporters occasionally propose it.

I think there are two related challenges to implementing this system. One is the College Sports Commission. We’re seven months out from House, and nobody has gotten in trouble for breaking any of the rev-share or “third party NIL” rules. There have been guideline updates, and most everybody is making some sort of effort to at least partially comply, but there haven’t been any actual penalties.

Without some sort of regulatory system that is actually enforced, I don’t think a transfer fee system can ever actually work … since who will be in charge to actually make sure those fees are properly paid? Can state courts be trusted to enforce player contracts with schools? Can they enforce those contracts quickly enough? How will transfer fees be permitted to be used? Will they be taxable income?

Even if the CSC (or something else) gets patched up, I’m not certain a fee system can work at scale without either employment status or some sort of federal exemption that provides clarity.

But those are the same challenges to nearly every other sort of reform effort to player movement and compensation. I don’t think that’s unique to transfer fees.

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Reader Sheep Launcher asks:

Good question.

Under the pre-2020 rule set, I would typically tell people there were reasons why sleeping giants were sleeping … and it’s uncommon for them to wake up. Institutions that appeared to have favorable demographics or resources, upon further inspection, often didn’t. You will not convince me that Maryland football, for example, is just waiting to finally become an elite program, no matter how many good athletes play at DeMatha.

But in the post-NIL, post-portal and post-rev share world, perhaps previous assumptions are worth revisiting.

If we want to use Sheep Launcher’s definition (a school that is reporting a lot of revenue but not as much elite success), there might be a few candidates.

I pulled up the FY24 top programs in royalties, licensing, advertisement and sponsorships revenue from the Extra Points Library. This might be a more useful proxy for revenue generation than total revenue, since isolating sponsorship money removes stuff like student fees, institutional support and “just having a huge stadium” from the picture.

You can probably predict the top teams: Texas, Michigan, Ohio State, Texas A&M, Florida State, etc. Surprisingly high is Louisville (sixth!), Arizona State (15th) and Nebraska (17th). If you sort by ticket revenue, there are a few other programs surprisingly high, like Arkansas (5th), Colorado (17th), Louisville (20th).

If I had to pick a program that was underachieving relative to total earned athletic revenues over the past few years, my answer would probably be Texas A&M, Nebraska or Washington. If I had to pick a program I think could become a substantially more successful department in the future, just based on revenues right now … I’d go with Arizona State.

I’m open to other suggestions, though. Leave ’em in the comments..

Let’s get out of here on this one:

Boy, this is a tough one, because I don’t think most of the other great college football turnaround stories were that sudden.

Take Northwestern, for example. The football team was absolute garbage from the late 1960s to early 1990s. In 1995, it made the Rose Bowl under Gary Barnett … but that was in his fourth season. The Wildcats went 3-8, 2-9 and 3-7-1 before exploding to a 10-2 record.

The faster Northwestern turnaround story was back in the dang 1930s. When Pappy Waldorf took over for Dick Hanley in 1935, the Wildcats went 4-3-1. The next season? They went 7-1 and held the No. 1 spot in the AP poll for three weeks.

Kansas State stunk for a few years before Bill Snyder broke through in 1993. Frank Beamer was bad or average for several years at Virginia Tech before the Hokies won nine games in 1993. Barry Alvarez had three losing seasons before making the Rose Bowl at Wisconsin.

I guess the closest thing we’ve gotten in the modern era was at UCF. In George O’Leary’s last season in 2015, UCF went 0-12. Scott Frost went 6-7 in his first season, and then won a national title* with a 13-0 season in year two.

But even that isn’t what Indiana did. UCF only really sucked for one season, and it took more than one to turn the ship around. This Indiana football story, as far as I know, is in a class of its own.