Key Takeaways
💰 The Math Works: Adding tuition-paying athletes can reduce discount rates from 50% to 25%, making athletics one of the most profitable segments on campus
📊 Massive Unmet Demand: Only 100,000 freshman roster spots exist for millions of aspiring college athletes – less than 7% of high school athletes find any college roster
🔄 Triple Squeeze on Freshmen: Transfer portals, extended eligibility, and roster caps are dramatically reducing opportunities for incoming students
🎯 Future-Proof Skills: 94% of women C-suite executives played sports; hiring managers consistently rank student-athletes at the top of candidate pools
🏟️ Underutilized Assets: Athletic facilities sit empty most of the year, representing millions in untapped revenue potential
👥 Largest Affinity Group: Over 50% of high school students play sports – the biggest incoming demographic universities ignore
🎭 Two Different Models: Only 5% of college sports operates as entertainment business; 95% functions as tuition-driven education
Introduction
A new white paper by IMG Academy CEO Brent Richard and former Florida State quarterback Drew Weatherford challenges conventional thinking about college athletics economics. While universities contemplate cutting sports programs in response to the House v. NCAA settlement, the authors propose a counter-intuitive solution: add more student-athletes through a “Varsity Club” model. This varsity-lite tier would offer real coaching and facilities at 50% training intensity, primarily funded through tuition rather than scholarships. The proposal addresses massive unmet demand while leveraging existing infrastructure to create new revenue streams.
The Identity Crisis in College Athletics
College athletics faces a defining moment. The recent House v. NCAA settlement has university presidents scrambling to cut costs, reduce rosters, and eliminate programs. But a compelling new white paper suggests they’re solving the wrong problem entirely.
Brent Richard (CEO of IMG Academy) and Drew Weatherford (former Florida State QB turned entrepreneur) present a radical proposition: instead of contracting, universities should expand their athletic offerings through a new “Varsity Club” model that could transform both the economics and accessibility of college sports.
Economic Reality Check
The fundamental misunderstanding starts with how universities view athletic departments. Most treat sports as pure cost centers, conveniently ignoring tuition revenue in their calculations. This accounting sleight-of-hand makes programs appear unprofitable when they’re actually generating significant net revenue.
Consider the current landscape: non-revenue sports typically operate with a 50% discount rate (scholarships). By adding a second tier of primarily tuition-paying athletes, that rate drops to 25%. Simple math transforms athletics from a budget drain to a profit center.
The paper highlights D-I baseball as a cautionary tale. Under the House settlement, roster reductions mean fewer tuition-paying players but identical operational costs. Same coaches, same facilities, same travel budget – but significantly less revenue. That’s a playbook for financial disaster.
The Supply-Demand Disconnect
The numbers tell a stark story. Millions of families invest heavily in youth sports with college aspirations, yet only about 100,000 freshman roster spots open annually. Less than 7% of high school athletes find any college roster spot; a mere 3% reach Division I.
Any business facing this level of unmet demand would expand capacity. Universities? They’re discussing contraction. The disconnect defies basic market logic.
The New Triple Threat
Today’s high school athletes face unprecedented challenges:
- Transfer portal preferences: Coaches increasingly recruit proven college players over high school prospects
- Extended eligibility: Current college athletes staying longer, clogging roster spots
- Roster cap pressures: Potential reductions further limiting opportunities
This convergence creates a perfect storm for aspiring college athletes, narrowing pathways exactly when youth sports participation peaks.
Sports as Essential Education
The paper’s most compelling argument reframes sports from extracurricular to essential. Hiring managers consistently identify critical future skills: resilience, flexibility, leadership, social influence, self-motivation. These aren’t classroom subjects – they’re learned through competition.
The data speaks volumes: 94% of women C-suite executives played sports, with 52% competing at university level. Female college athletes over-index executive leadership by 8x compared to general graduates. As AI disrupts traditional knowledge work, these distinctly human capabilities become career differentiators.
The Capacity Crisis
Universities sit on hundreds of millions in athletic infrastructure operating at fraction capacity. Facilities empty all summer, during breaks, most afternoons. The one-team-per-field model represents massive underutilization.
The paper identifies seven to eight figures in potential annual revenue from better facility usage. Smart scheduling could accommodate multiple teams on single fields. Summer camps, break programs, and additional teams could transform dead assets into revenue generators.
Serving the Majority
Over 50% of incoming freshmen played high school sports – the largest affinity group entering college. Yet universities offer binary options: make the varsity team (7% odds) or join recreational leagues barely above intramurals.
The Varsity Club model bridges this gap: real coaching, competition, and development at roughly 50% varsity training intensity. Students gain identity, community, and growth without overwhelming time commitments that derail academics.
Separating Entertainment from Education
Richard and Weatherford cut through the confusion by distinguishing two distinct models. Roughly 5% of college sports operates as entertainment (media rights, tickets, sponsorships) – primarily high-level football and basketball. The other 95% functions as education, funded through tuition.
The House settlement’s allocation proves the point: 95% of the $2.8 billion went to football and basketball players. Using entertainment economics to govern educational programs makes no strategic sense.
Implementation Roadmap
The Varsity Club model’s beauty lies in immediate actionability. No NCAA changes required. No conference approval needed. Universities can pilot programs tomorrow:
Phase 1: Maximize current roster caps with tuition-paying athletes
Phase 2: Launch Varsity Club teams in high-demand sports
Phase 3: Provide varsity-level facilities and coaching at reduced intensity
Phase 4: Create competitive structures with nearby schools
Phase 5: Scale successful programs across more sports
Individual sports (tennis, golf, track) offer simpler starting points than team sports. Clear financial expectations – primarily tuition-funded with limited scholarships – ensure sustainability.
The Leadership Moment
College athletics stands at a tipping point. The choice is stark: contract in fear or expand intelligently to serve massive unmet demand. The economics work. The facilities exist. The students wait.
As Richard and Weatherford conclude: “We need leaders. We need innovators. The students are ready. The economics are sound.”
When overwhelming demand meets underutilized assets and profitable financial models, the biggest risk isn’t trying something new. It’s maintaining status quo while the world transforms around you.
The question facing university leaders isn’t whether college athletics will change – transformation is inevitable. The question is whether institutions will lead that change or be casualties of it.Retry
Conclusion
The Richard-Weatherford white paper presents more than an alternative model – it offers a fundamentally different mindset. While others see crisis, they see opportunity. While others cut, they grow. While others retreat, they advance.
History shows that industries facing disruption rarely shrink their way to success. The winners recognize changing dynamics as chances to serve unmet needs in innovative ways. College athletics has reached such an inflection point. Universities can either embrace expansion that serves student demand and institutional economics, or watch as more nimble competitors fill the void they’ve created.
Brent Richard is a career investor, operator and entrepreneur in sports and education businesses, the CEO of IMG Academy, and a former collegiate soccer player.
Drew Weatherford is a co-founder of Weatherford Capital and Collegiate Athletic Solutions and a former starting Quarterback for Florida State University
via: IMG
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