Many mid-major athletic programs and stakeholders like the University of Denver are looking at the Power Four conferences as an invincible Goliath. Flush with a treasure trove of football money, they are turning their athletic departments into commercial, for-profit enterprises and basically hiring professional athletes. Armed with billion-dollar TV deals and a push to uncap scholarship limits only adds to the growing anxiety of the mid-majors.

The premise that the Power Four mega conferences will undoubtedly excel in the brave new collegiate sports landscape may be faulty, though. What if we are all wrong? What if the adage holds, “The bigger they are, the harder they fall?”

Power Four athletic departments (ACC, SEC, Big 10 & Big XII) must prepare for new budget line items that could balloon up to $30 million annually as the richest schools prepare to share upwards of $22 million in annual revenue with their student-athletes players while expanding roster sizes with uncapped scholarships, according to settlement documents. Their Olympic sports (read: non-revenue) will compete across the country, saddled with expensive, extensive, and time-consuming air travel. At the same time, the NCAA agreed to pay the past damages to former unpaid student-athletes using March Madness cash over the next 10 years ($277 million annually). To fund the $2.6 billion settlement payments, the NCAA tournament school and conference payouts are being slashed. Power Four schools will be hit the hardest with revenue cuts as their March Madness unit payouts drop over the next 10 years.

Furthermore, a new gap is forming within the Power Four, especially when it comes to football costs. On the “low” end are schools like Houston with annual operating budget of $80 million on football with gridiron power Texas spending over $130 million. The Longhorns pay their coaches $40 million per year alone. The same theme repeats itself in each of the four surviving conferences with the ‘haves’ and ‘have nots.’ The chart below shows revenue and expenses for the top five athletic programs and 45-49 programs which shows a massive gulf between athletic departments in the Power Four.

Only the Power Four have agreed with the NCAA class action settlement to pay their athletes due to their football revenue profile – the same does not hold for Mid-Majors. Also, conference expansion has the cost of travel escalating as the new far-flung conference members must endure long plane flights for all their Olympic Sports as well.

Sports historian @HistoryRunner: "The just RUTHLESS killing off of the Pac-12 Conference really showed Olympic sport athletes like, you don't matter."

More on how the NCAA’s new antitrust settlement could radically change Olympic sports in America: https://t.co/UaxV5suggX pic.twitter.com/CLVHEj2CJY

— Pablo Torre Finds Out (@pablofindsout) August 8, 2024

Second-class citizen Power Four conference members are emerging in the Power Four space and the competitive balance is no longer competitive nor balanced – even among ‘the majors.’

Forbes addressed the Human Cost to the Power Four:

“These effects will be more pronounced for student-athletes who play Olympic sports and often have more than one game or match per week. This is true both for the schools that have changed conferences and the schools on the East Coast and in the Midwest whose students will now also have to fly to the West Coast several times per season. For sports that play outside, realignment may mean playing in very different environments. Baseball players from Arizona may be playing baseball outside in Michigan in April. Student-athletes themselves already worry about the impact on their physical and mental health, as well as their classroom performance…The damage, however, done to individual people and communities will likely have long-lasting injurious effects.”

Yes, the University of Denver may have challenges matching up with, say, Michigan hockey if the latter pays its hockey players and uncaps scholarship limits (ignoring for a moment the obvious NIL advantage the Maize and Blue may hold) while capping roster sizes. But a school like, say, Arizona State will likely face greater financial burdens than Michigan. In 2023, ASU had $31 million of operating expenses in football alone and the athletic department lost money. Big XII revenue will certainly increase thanks to the rich television deals but expenses are likely to spike and probably outpace revenue. In other words, unless these schools find ways to slash expenses, they will never again operate in the black. Look for ASU and other Power Four members to cut their budgets by dropping Olympic sports and minimizing their capital spending.

Unless the power conferences unbundle their Olympic sports and follow the old regional models, their expenses for non-football sports will put a massive strain on their athletic departments operating budgets. Especially with athletic departments seeking additional revenue streams, donor fatigue will set in as well-heeled stakeholders are tapped for both NIL deals and athletic departments’ capital projects and expenses.

Nearly all DI athletic programs, even the Power Four, will have to make serious and potentially catastrophic decisions as Division I athletics moves to a profit-sharing model with their student-athletes. The cuts could hurt the biggest athletic programs the most. In some ways, though, it’s comforting to know that the anxiety extends well beyond mid-major programs as schools and conferences look to navigate the rapid changes to the ‘old’ collegiate student-athlete model.