Money forcing Arkansas' athletics department to make some serious cuts

FAYETTEVILLE, Ark. — The reality of college sports’ new economics has arrived in Fayetteville.

Arkansas athletics director Hunter Yurachek gathered with his deputies, not to celebrate a win, but to deliver the toughest news of his tenure that a wave of staff cuts and early retirements that would reduce the department’s workforce by 10%.

“Yesterday was one of the toughest if not the toughest day in my 16 years as an athletic director,” Yurachek told the Arkansas Democrat-Gazette. “They were conversations with really good friends, really good people. People with families. People that are devastated and going to be impacted.”

All of it is part of the cost-cutting going on at several colleges around the country. It may be a few weeks before we hear about all of them.

This move, which affected roughly 18 of the department’s 181 listed employees, is Arkansas’ response to the House v. NCAA settlement, the court decision that will, for the first time, require schools to directly share millions in revenue with their athletes.

The House settlement, finalized earlier this month, mandates nearly $2.8 billion in back payments to former college athletes and allows each Division I school to share up to $20.5 million annually with current athletes, a cap expected to increase in coming years.

For Arkansas, the math is brutal. Yurachek instructed his deputy athletic directors to cut between 5-10% in salary from their respective units, sparing only coaching staffs and essential sports medicine personnel.

The Razorbacks didn't do any cutting from coaching staffs. Apparently wins still do matter from that standpoint and the training staff didn't get hit.

Nearly all of it took place on the administrative side of things.

The mood in athletic departments nationwide has turned somber as the implications of the House settlement ripple outward.

“I didn’t think another year would be as tough as COVID [in 2020], but this year has done that,” Yurachek admitted in the story at WholeHogSports.

His sentiment echoes in athletic offices from Norman, Oklahoma, where Oklahoma recently cut 5% of its full-time staff, to the boardrooms of the Big Ten and ACC, all grappling with the sudden need to divert tens of millions annually to athletes.

The settlement, which goes into effect July 1, represents a fundamental shift in the business model of college sports.

For decades, universities have generated billions from television deals, ticket sales, and merchandise, while athletes remained unpaid beyond scholarships.

Now, schools can allocate up to 22% of their average athletic revenue directly to athletes, a figure that could rise to $32 million per program before the decade is out.

This new reality is forcing athletic departments, especially those in the Power Five conferences, to reevaluate everything from staffing to facilities to donor relations.

Arkansas’s $2.5 million in staff savings is just the beginning.

People may doing different jobs and more of it with the changes.

The House v. NCAA settlement upends more than just payrolls. It is, in effect, a tacit admission that the old amateurism model is dead.

“The House settlement will fundamentally shift the economics of college athletics, allowing schools to pay Division I players directly and ending the longstanding ban on direct compensation,” wrote legal analysts at Ropes & Gray, a national law firm that has tracked the case.

Across the SEC, where schools like Arkansas have long prided themselves on tradition, the challenge now is how to remain competitive while meeting these new obligations.

Some athletic directors have voiced concerns that the revenue-sharing era could widen the gap between the haves and have-nots. Only the wealthiest programs may be able to keep pace with escalating athlete compensation and the rising costs of facilities and support services.

But the changes are not universal. Some schools, including the Ivy League, have opted out of the revenue-sharing framework, choosing instead to remain on the sidelines of the financial arms race.

For those who bought in, like Arkansas, the cuts are a grim necessity. Yurachek emphasized that affected employees were let go “in good standing” and are eligible to reapply for future roles in the department or university.

Will the trimmed-down Razorback athletic department be able to maintain the high standards its fans and athletes expect? Yurachek is hopeful but realistic.

It better or he's going to have a problem to continue raising the money needed to meet the goals in a changing world.

For student-athletes, the new era brings an unprecedented opportunity to share in the wealth their performances generate. For employees behind the scenes, the future is less certain. Some may find opportunity elsewhere. Others may return if and when budgets allow.

As July 1 approaches, Arkansas’s experience offers a sobering preview of what lies ahead for college sports. Revenue sharing, born out of legal battles and cultural change, is no longer a hypothetical.

It is, as Yurachek and his colleagues are discovering, a day-to-day management challenge with very real human costs. They don't like cuts more than anyone else, though.

The financial reckoning is not limited to Fayetteville. With the NCAA’s $2.8 billion in back pay and annual revenue-sharing caps now law, programs across the country are bracing for similar decisions.

Schools smaller than Arkansas will feel the pinch, too. It's going to take awhile to sort it all out, but things are changing. Just not as much in the SEC and other large conferences.

As the SEC distributes record revenues, over $800 million among its member schools last year, how each chooses to adjust will chart the future of college sports.

Only time will tell if it's a warning of what may be coming in the future.

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