NCAA Teams Greatly Outpace Pro Teams In Operating Profit

Being the owner of an NIL collective could be a better investment than being an owner of a NFL team.

There are two storylines that I’m paying attention to this upcoming week:

1. More NIL news out of college football

2. 2022 NFL Draft

Why, you may be asking?

This past week was hectic in the world of college sports — it felt like we had a months worth of NIL stories packed in to 4-5 days.

We are seeing insane amounts of money being thrown at college recruits and transfers…I’m curious as to how it will impact the NFL draft (if at all this year).

For example, Arizona State’s two best players decided to enter the transfer portal stating there are better NIL deals elsewhere.

The college landscape is being shaken up, and undoubtedly will have ripple effects into pro sports in the near future:

• coaches leaving

• players staying in college longer

• a breakaway from the NCAA?

• college programs outpacing pro teams

It is slowly becoming more profitable for the majority of athletes to stay in college versus go to the pros.

Today, I have done a quick break down of the profits of college vs NFL teams.

Let’s dive in 👇

NFL vs College Profits

In 2021, NFL teams produced $18B in revenue and walked away with over $4B in profit after expenses.

Looking at the 32 college football teams with the highest margins in 2021 we get…

• $3.8B in revenue

• $326M in profit

The NFL looks to have a much larger margin when compared to college teams, but it’s not as wide as it may look.

Check This Out:

• The top 100 NCAA football programs (by earnings) generated nearly $5.6 billion in combined revenue

• University of Texas’ football program (UT) reported the highest earnings: $146 million

• UT football reported $104 million in profit — a 75% margin

• Over $1 million in profit was earned per player on the UT roster (85 scholarship players)

• UT’s $104,923,030 million in profit was higher than 30 out of 32 NFL teams in 2021 operating income

• 22 NCAA football programs reported higher profits than the operating income of the lowest-earning NFL team, the Buffalo Bills

The only sports program in the entire country that pulled in more money than UT were their neighbors to the south - Texas A&M.

Big Business in Texas

Here’s a look at profits of the top NCAA football and basketball teams from 2014-2017.

While some of the names may have changed over the last 5 years, the revenues haven’t slowed down.

University of Texas football has done over $200M in revenue for three straight years.

On top of this, thanks to NIL, they now have collectives in place to pay the players. Every offensive lineman will receive $50,000 next year and if Arch Manning heads to UT he will be in the range of $5-10 million per season.

So serious question…

What do football players do based on these salaries per year?

• Median NFL salary = $860,000/yr

• Power 5 = no data but can speculate above 6-figures by EOY

• Canadian Football (CFL) = $60,000

• XFL = $50,000

• USFL = $45,000

• Arena = $40,000

• Non-Power 5, D1 FBS = no data but maybe around $10,000?

Stay in College or Go To The NFL?

I believe the ultimate goal still remains to get to the NFL.

But if you have a large social media following, compete in a major college town, are extremely talented, and can lead your team to championships…

There is no rush to get to the pros.

The goal for many college football players will shift from getting to the NFL to getting picked up by a Power 5 NCAA program.

I wouldn’t be surprised to see the NFL reconsider their “3 year rule” as many of these changes have a second-hand impact on their growth.

If Arch Manning can make $5M/yr at Texas — why would he rush to get to the NFL?

For context, Ohio State QB Justin Fields was the 11th pick in the 2021 draft and signed a 4 year $18.9M deal with the Chicago Bears.

If Arch Manning stayed at UT for 4 years, he would be in the position to make anywhere from $20-$40 million.

The NFL could care less about competition from the CFL, XFL, or USFL. But they should be worried about the rising world of Power 5 football.

New Type of Sports Owners

The founders of NIL collectives could become the most powerful “owners” in sports.

And they don’t have to worry about drafting players — all that matters is how many 0’s are in their bank account.

Depending on where college sports goes, owning an NIL collective might turn out to be a better investment than owning a pro sports team.

This might sound ludicrous…but so did Bitcoin in 2013.

I won’t go into how Web 3.0 ties into ownership of NIL collectives and fan-owned teams, but just know, Power 5 college football and basketball programs are a great place to be going forward.

So big, that it could rival the NBA and NFL.

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Hope you had a great weekend — I don’t know about you, but I’m ready for summer.

Get after it this week!

Peace,

AP

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Sources:

https://www.heartlandcollegesports.com/2021/12/14/texas-tied-for-richest-college-football-program/

https://work.chron.com/much-money-nfl-player-make-year-2377.html

https://www.ucribs.com/blog-post/ncaa-football-teams-made-more-money-than-many-nfl-teams-in-2015-infographic/

https://www.statista.com/chart/17700/the-most-valuable-ncaa-teams/

https://cflnewshub.com/cfl-history/how-much-do-cfl-players-make-vs-nfl-xfl-players/

https://www.sportico.com/business/commerce/2021/college-sports-finances-database-intercollegiate-1234646029/

https://www.hookem.com/story/sports/football/2021/01/29/texas-football-longhorns-turn-22-1-million-profit-2020/4301655001/