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AZ universities agree to pay athletes $20M a year. Here's what it means

Packed house at Sun Devil Stadium for ASU football
Tim Agne/KJZZ
A packed house at Sun Devil Stadium for ASU’s 38-15 victory over University of Arizona on Nov. 27, 2021

The NCAA and its five biggest conferences settled a lawsuit last week that will likely lead to student-athletes being paid directly by their schools. The NCAA is expected to pay more than $2.5 billion in damages over the next decade to current and former student-athletes. The parties in the lawsuit have also agreed to a plan in which universities would have roughly $20 million per year to pay their athletes.

With The Show to talk more about this, and what it could mean for Arizona State University and the University of Arizona, is Chris Karpman, publisher of Sun Devil Source, which is part of the 247 Sports network.

Full Conversation

MARK BRODIE: Chris, what to you are the big takeaways from this settlement?

CHRIS KARPMAN: Seems like this has been an inevitability for many years, if not decades. You had athletes who were helping institutions and NCAA make billions of dollars, and they weren't getting a share of that. And I think ultimately, what's going to happen is a year from now, perhaps, or maybe further on down the line, there's going to be $20 million-ish type of a number that schools are going to be allowed to distribute to their athletes however they see fit. And that's a big part of the the speculation on what's going to happen now. You have Title IX considerations, revenue sports considerations, trying to make sure that you are doing the things that enable the most growth potential to come into your university and your athletic department.

BRODIE: Does this become a recruiting tool where certain schools might say, “OK, football team or basketball team or some other team, you know, we'll give you all X number of dollars,” whereas this other school only give you slightly less than that.

KARPMAN: Absolutely. And that's a differentiator. For example, context, Arizona State has 26 varsity sports. That's more than any Big 12 school. A lot of the Big 12 schools are only have 16, give or take a few. And so that could be a competitive disadvantage for an ASU, depending upon allocation of resources. Now the NIL, which I think people have become more familiar with, name, image, likeness, that's probably not going to go away. And so you're you're still likely to have these collectives, which represent and try to support athletes at various schools, supplementing that $20 million in some form or fashion.

BRODIE: Is there a sense that one student athletes are able to be paid, both from the universities directly and as you reference NIL, might that be an incentive for them to stay in college longer than at least a lot of, for example, basketball players do now?

KARPMAN: Yes. And actually we're already seeing that happen. I feel like in just the last two or three years alone, NIL has led to a lot more retention of athletes in universities.

BRODIE: Have there been any discussions, especially at a place like ASU or even UofA, about how they might divvy up that 20-ish or so million dollars?

KARPMAN: Behind the scenes, I think there are preliminary conversations about that. Nothing that really has percolated to the surface in terms of an expression of sentiment on how that's going to be divided or what the priorities are going to be related to that. I think people are still working through the terms of the settlement, which was just agreed upon, hasn't even been finalized. So, I think that's probably still a ways out, maybe 6 to 12 months before we have really concrete details on that.

BRODIE: What are folks within the state and maybe within ASU and UofA saying about how all this might impact their recruiting? Might affect, you know, how they go about trying to retain athletes or you know, what kind of success they might have on the on the field or on the court?

KARPMAN: Yeah, so, there's a wide variety of perspectives, as one might imagine. You have the diehard football or basketball fans that want to see more allocation to their specific, preferred sports. Then, you have people who feel like they want equity and fairness across all athletes at schools. I think that the interesting thing is that culturally, how much that drives the determinations. So in other parts of the country where football is so important, does that lead to an outsized amount of money being channeled to football versus places more in the West, which I think contributed to the Pac-12, imploding, where they're they're trying to service all athletes in a fair way.

BRODIE: Well, it's interesting, we reference, you know, different sports in different parts of the country. The Pac-12 for so long has been known as sort of the Olympic sports conference. You know, some people call them the non-revenue sports, but is there a sense that maybe, you know, some of the folks on the swimming and diving team or the track team or, you know, some of the lesser known tennis team maybe might get a some significant piece of this?

KARPMAN: So this is the the challenge. I think that that is a cultural push, or at least a desire for people that are in the west. Michael Crow has said strongly that he wants to be more like a Stanford, which has among the most, varsity sports of any schools. The problem is, is that Stanford has endowments and financial circumstances that make that much easier than at ASU, where you really need to drive revenue from your football and basketball success, which is something that ASU's new athletics director, Graham Rossini, has touched on already from his introduction of, “hey, in order for us to be more successful broadly, we need fans to be really, happy with the experience so that they're spending more dollars, that allow us to do other things.”

BRODIE: Alright, so,  let's talk about the new athletic director at ASU. What are some of the challenges that that face? I mean, he's coming in, you know, so a little bit of a cloud over the ASU athletics department with Ray Anderson and Herm Edwards having departed.

KARPMAN: Many challenges, the NCAA investigation into football recruiting that was recently settled and announced by the NCAA came at a really bad time for ASU, because that's when NIL was really blossoming. And and so not only was ASU kind of hesitant to jump fully into it because it didn't want to do anything that wasn't allowed, but also it didn't have the ability to communicate effectively the importance of NIL and the new sort of changing landscape of college athletics to its fan base, and didn't have the leadership to be able to execute on that.

BRODIE: One other thing I want to ask you about, with Rossini coming in and ASU’s athletics department, it seems as though they had some debt that just kind of went away? Like, how did that work?

KARPMAN: So, yes, athletic departments very commonly borrow from the university. They're run as a “auxiliary enterprise.” ASU athletics has had a deficit in most years, in recent decades, trying to keep up with the Joneses, if you will, in college athletics. And Michael Crow said that their reimagined athletic department is getting rid of redundant and/or fixed costs that typically wouldn't be associated with the university as part of its incorporation of athletics into the main enterprise. And so, Sportico, a website that tracks sports business, said that ASU owes $312 million, the athletic department, to the university. Of course, ASU’s university is highly successful and profitable, and so it does have the ability to, I think, absorb this or write off or forgive the debt. But Michael Crow hasn't been very specific as to how exactly that debt elimination, which is the word he used, is exactly going to function.

BRODIE: Is this something that other schools have done or are doing in, in terms of sort of taking the university's athletic department into the university and not having them be a separate entity anymore?

KARPMAN: Yes. And I think that Northwestern, Vanderbilt, some private schools are much more apt to to function this way. But I think that coupled with the House vs. NCAA lawsuit that's going to result in athletes being paid and some of these other changing dynamics, that's going to lead to more schools moving in this direction. I'm highly confident of that. I do think that this is a direction that most schools who intend to be very successful are likely to go.

BRODIE: All right. That is Chris Karpman, publisher of Sun Devil Source, part of 247 Sports. Chris, thanks for coming in, I appreciate it.

KARPMAN: My pleasure.

KJZZ's The Show transcripts are created on deadline. This text may not be in its final form. The authoritative record of KJZZ's programming is the audio record.

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Mark Brodie is a co-host of The Show, KJZZ’s locally produced news magazine. Since starting at KJZZ in 2002, Brodie has been a host, reporter and producer, including several years covering the Arizona Legislature, based at the Capitol.