This Week In College Viability (TWICV) Special with Greg Chick from NILnomics.com
Gary D Stocker (00:01.112)
Welcome back to a special episode, a really special episode of this week in college viability. Hi, everybody, Gary Stalker back behind the Blue Yeti microphone, talking higher education, but today a little bit different topic. we normally poke the higher education bear, but one of the topics that is increasingly important, and that's probably understating it, is college athletics and so much going on with that. And my guest today is Greg Chick.
Who founded Nil Nomics, that's N-I-L, N-O-M-I-C-S, about a year ago. Greg, thanks for making time to join us.
Greg Chick, PhD (00:37.695)
Hey, thanks for having me, Gary.
Gary D Stocker (00:39.268)
And if you would, just quickly tell us about yourself.
Greg Chick, PhD (00:42.232)
Sure. So I am a recent PhD graduate from the University of Massachusetts Boston, spent ten years working on a study using advanced cutting edge quantitative econometric methodology to study NCAA policy. So my expertise is on NCAA finances and the consequences of it. And I write a newsletter where I continue the research, the analysis, and try to help people understand the world of college sports finances.
Gary D Stocker (01:09.828)
Yeah, and I gotta say, if there's a top ten topic in the world today, it's gotta be college athletics. And and you run nilnomics, I'm gonna have to work hard on that. You run nilnomics with a commitment to something called radical transparency. And this is just in sports data. Why is college sports financial data so notoriously difficult for for both journalists and fans to get a straight answer on, Greg?
Greg Chick, PhD (01:35.811)
Well, for the same reason why every NFL team doesn't let journalists see their books, right? Like no the these are billion dollar franchises that have no interest in letting people scrutinize how they're being operated. but fortunately or unfortunately for them, they many of them are public institutions. So there is currently a system through the NCAA and other higher ed regulations where they have to report certain data to those organizations. And so
both through them and public records requests, writers, researchers, journalists can can receive copies of lots of documentation, a surprising amount of documentation of these athletic departments. And it's it's a bear. I you know, I have personally messaged every D1, D2 institution for their annual financial disclosures. and it's it's not easy. You know, some states require that you be a resident of the state.
Gary D Stocker (02:12.994)
Interesting.
Greg Chick, PhD (02:33.152)
Some of them will give you excessive cost. They, you know, they they they'll make you pay like a dollar a page, which doesn't sound much, but when it's a ninety page document or four hundred page contract with their MMR partner, it can it can add up pretty quickly. so these these are major million dollar, billion dollar c c companies that don't want people looking over their shoulder. They they don't want financial scrutiny, they just want Congress or or
or really the public to just buy into whatever they're demanding at
Gary D Stocker (03:06.9)
And clearly we have not one data nerd on this podcast. We have two, right? And and it's a terrible disease. And Greg, I don't think there's any cure for, at least in my mind, I don't think there's any pharmaceutical I can take to cure my interest in data and looking at it and providing perspective. And and when you look at the data sets, and you just talked about a couple of those, when you look at the data sets you analyze, I guess from coaching contracts to even conference realignment, what
Greg Chick, PhD (03:21.518)
Mm-hmm.
Gary D Stocker (03:34.806)
In in your experience, in your expertise, what is the single biggest misconception that the general public has about where college, sports, money actually goes?
Greg Chick, PhD (03:46.648)
Well, you know, I'm in the weeds on college sports, so I'm trying to put myself in the the mindset of someone who just turns on the news. And as as we're recording, the college sports machine is testifying in front of Congress. And if you listen to them, they would tell you that having to pay players is absolutely the worst thing to ever happen to college sports. now I've looked at their financial disclosures, and it just so happens that
A significant amount of their budgets are going to pay coaches. there's their assistant coaches, the whole administrative state. that's where a majority of the money is going to. And I'm looking, I've got right in front of me here Ohio State's FY25 report. Now, Ohio State reported $320 million last year. this is FY25, so that's the 24-25 season. We're always a year behind. but they've reported $320 million in expenses. Now
$54 million of that or 17% went to their coaches. and another 51 million or 16% goes to their support staff. So that's what's that? 32% of their budget is going to pay for staff. And if if that sounds right to to to people listening, great. But I think you one would expect that labor, the people that are actually doing the work that's generating the hundreds of million dollars to a school like Ohio State.
I think people would expect that the players get a certain amount certain cut of that. now certainly they do right now, right? The scholarships are a significant cost to the departments. Ohio State paid twenty-five million dollars or eight percent of their budget to pay for student aid and and meals. You'd be so people would be surprised to know Ohio State paid seven million dollars in FY twenty five or two percent of their budget just to just to feed all those players. So
Gary D Stocker (05:16.376)
Yeah. Yeah, yeah.
Greg Chick, PhD (05:39.386)
certainly, you know, this is before house settlement was was a thing where we're you know, the the twenty million dollar cap is is a real expense to these athletic departments. But I I think, you know, a reasonable person listening to this would expect that labor should get their fair share of of the revenue. And granted, it's it's if you listen to the leaders in this industry, they're saying the the cost just came out of the sky and they they how could they have known or planned for it? Which is of course, which is a joke.
Gary D Stocker (05:48.28)
Yeah, yeah.
Gary D Stocker (06:06.776)
Yeah, yeah.
Greg Chick, PhD (06:09.261)
but y again, back to your question, I think people don't recognize how much the administrators, the coaches have made massive fortunes for themselves in this industry.
Gary D Stocker (06:20.804)
And let's talk then, know, for the most part of the conversation is about the power four. See if I can name then the the Big Ten, SEC, ACC, and Big 12, right? Are the Power Four conferences. So when we look outside of those, what happens to the group of five, which is the next set of conferences below that? And even the FCS schools, those even call it third-tier colleges, who are trying to survive in this financial ecosystem, ecosystem. Is is
Is this wealth gap becoming insurmountable for them or is it already insurmountable?
Greg Chick, PhD (06:55.511)
Yeah, I mean, I think it's already challenging for many institutions. You know, I've got the revenue expenses for all these schools, and many of them are in the red deeply. a lot of the group of six school schools are are operating at massive losses. They would not be able to operate if they weren't subsidized by student fees, by institutional state, or even federal subsidies. So they these programs are not profit generated.
By and large, not even just the group of six, but even at the powerful level. Many of these programs are loss leaders for these institutions. But what you would hear from them, from the leaders, is they would say that this is their marketing expense for the institution. This is the front porch. This is how schools get their names in front of students and parents to market themselves. now, is it sustainable? You know, I I l heard a quote from the Kent State president.
went about the cost of attendance stipend that went into place in 2015. That was the topic of my dissertation. He, you know, he he said, out of nowhere, the Kent State suddenly had to pay $2 million a year. And that's a big part of Kent State's budget. They don't have a large, you know, a $320 million operating budget. and now I can't state a bowling green is is dealing with a $20 million expense. The reality is they're just not gonna be able to afford it. and they can decry that.
And suggest that we're suddenly in a world of haves and haves nots. But, you know, I was here five years ago. I I would have characterized that world as a haves and haves nots. I I I think one of the big misconceptions is that something's changed, right? It's just now that the players are getting paid out in the open, we you know, we can all understand what's what's happening instead of having to deny that, you know, that type of thing is is up is going on.
Gary D Stocker (08:28.718)
Yeah, yeah.
Gary D Stocker (08:44.516)
So let's step back for a second and go back and talk a little bit about parents and youth sports in the context. And a little bit later today, I will record my weekly youth sports show with Joe Karabi. He and I talk about youth sports each week. And this podcast, this week in College Viability, was recently number three in podcasts for parents and college students, parents of college students. And so for the high school athlete and their family, who has either an extremely talented athlete in whatever sport.
Or less so, less physically gifted, less w you know, whatever you would care characterize. And they're they're looking at the college brochure today for a college they wanna go about. They wanna think about going to.
But look at the college majors and financial health and tuition and all that kind of stuff. How should they use athletic financial data to protect that to protect themselves from choosing a college for their child that might not be able to offer that sport or even stay in existence for the next four years?
Greg Chick, PhD (09:45.634)
Sure. You know, I think just like youth sports, you hear a lot about how private equity is taking over or that the costs for parents are getting out of control. from the higher education perspective, what I think of the most when you with this question is how athletics is being used at many institutions as a enrollment driver. you know, I think that the number one thing parents can do if they have a a young athlete that's interested at an institution is quite frankly ask how long the program's been around.
Gary D Stocker (10:04.625)
yeah, yeah.
Greg Chick, PhD (10:15.555)
you know, after after Hampshire College just closed here in Massachusetts recently. we're seeing a lot of closures and mergers. I know that's the the big focus of your work, Gary. you know, one of the kind of low-hanging fruit that many institutions are employing to drive increased enrollment is athletics. now just put yourself in the college presence, board of trustees, athletic directors' shoes. They're looking for low cost sports.
that given their market, they can drive revenue by just h you know, paying for as little expenses, whether it's coaches, support staff, and and not offering full scholarships. You know, if you're if your child is being offered a a spot at a team that's not offering a scholarship or a full scholarship, that's a that's a red flag that the school, you know, it's it's the two edged swords. You know, like I would I would hope that there's a a genuine opportunity there and that things would go well, but
You know, the school could be just looking at at the parent as as a revenue generator just because they can offer a a sport. So you know, a lot of the data and the work I do is at the kind of top hierarch of the hierarchy in college athletics, but I I certainly have data on some of the bottom D two, D three schools. And we're seeing athletics as kind of one of those early decisions that administrators are using to drive enrollment.
Gary D Stocker (11:24.196)
Right, right, right.
Gary D Stocker (11:37.484)
And it's kind of a would you agree with this? It's kind of a pay to play system.
Greg Chick, PhD (11:42.583)
Cer yeah, certainly at the at the at the bottom tier. And and I think, you know, you you hear a lot of I think we're gonna get into this, the forecasting of the non revenue sports, the Olympic sports, women's sports, you know, where where that may go. That that may be a reality too. You know, the the D one the full D one scholarship for those sports may be a thing of the past, possibly.
Gary D Stocker (12:01.996)
Yeah, I I wondered about that. So, all right, let's go to the mountaintop. And we're gonna hand you, Greg, we're gonna hand you the keys to the NCAA tomorrow. And you're gonna be told to fix the financial model for long term institutional stability. I just want one. What's the very first policy change? Now that you're king of the NCAA for a day, what's the one policy change you would implement?
Greg Chick, PhD (12:27.852)
You know, the way I see it, college athletics has three options. they can either get an antitrust exemption from Congress, which they're trying to do right now as we talk, they can collectively bargain with the athletes, or we can just live in this chaos. I think people always discount this third option that we can live in this world where litigation will dictate the the the system's structure of rules and policy.
Gary D Stocker (12:37.036)
Right.
Greg Chick, PhD (12:51.906)
unfortunately I wish I I th I that's a great question. What could how could I wave my wand? I mean, certainly I'm not sympathetic to the NCAA and the administrators who want to restrict student athlete rights and compensation. So I'm certainly against that. I'm not thoroughly convinced that collective bargaining may be in the players' interest, but I I do think there's enough there that I I wish we could get enough representatives of the top
revenue generating sports athletes in a room and see, you know, if if they got the information, had a you know, unbiased perspective, if they'd really want to to bargain with the with the institution. I think there's enough in there for them. you know, it in some ways you can look at the current state of college athletics as ev everything being in the athlete's favor. They have unlimited transfers, you know, they have unlimited transfers. you know, they're getting paid revenue share. There's NIL opportunities. We all know there's
Gary D Stocker (13:40.504)
Yeah, yeah.
Greg Chick, PhD (13:48.875)
Real N I L and then there's fake NIL. And I I think the top players are are certainly benefiting from that. But, you know, there's a lot of benefits if they were to collectively bargain. You know, you we hear about how they're expanding the NCAA tournament, they're expanding the college football playoff. you know, there's no union to represent the players' interest. You think the the NFL adds another game to the schedule without having to to to give a slice to the players? that that's certainly in their benefit. I mean they're
Gary D Stocker (14:12.292)
Yeah.
Greg Chick, PhD (14:18.54)
practice schedule, the game schedule. We we're hearing Arkansas, Arkansas or South Carolina complain about their schedule that just came out. You know, the players could have a seat at the table with those decisions. So there's so much to be gained, I think, for collective bargaining. I think, you know, I'm somewhat dodging your question, Gary, but I think if I had one, a magic wand that is, I would at least get the right players in the room, ign inform them as I'm trying to quickly inform your audience and and see if they they also agree that collective bargaining is in their benefit.
Gary D Stocker (14:48.708)
Yeah, and and I I I think a big picture of perspective here is sports is a monstrous part of our culture, of our American culture. From when children are young, five, six, seven, eight years old, whatever it is, and across multiple sports, it's a big, big, big deal. Initially recreational, but as you mentioned, I think a couple minutes ago it's becoming more corporatized, that's a word, for youth sports, especially for those who have some talent. Yet.
I think the stats are something like only two percent of all high school athletes move on to college sports, some small number, but still it's a big cultural piece of what we do, and that's it's not going away. And chaos may be what it ends up being, but but I'm writing you down for collective bargaining as your magic wand, is that all right?
Greg Chick, PhD (15:33.62)
Sure, yeah. I I don't be I don't mind being labeled the collective bargaining fairy.
Gary D Stocker (15:38.764)
So Arkansas, University of Arkansas, recently dropped men's tennis and then because of public pressure added it back in. And there was some complicated financial math associated with this. In your opinion, in your experience, do you think this will be an isolated incident? Or is this kind of the first drop in a massive wave of Olympic sports being cut because of costs?
Greg Chick, PhD (16:04.577)
Yeah, funny you you bring it up. I that was one of the topics of one of my newsletters. I really dove into the the economics of Arkansas athletic department. and I would just sum it up by saying, you know, that the tennis program it was about one or two percent of their budget. You know, the certainly expenses are going up for these departments, but cutting the tennis program was not something that they had to do. If you were if you were a cynical person, you might think that they did this.
to garner coverage and draw the donations that endowed a fund to to to pay for the team. But I'll I'll take your your question at face value, Gary. yeah, I mean, I we hear this a lot. We hear that paying players is going to drive cuts to other sports. and we're gonna see all these Olympics non revenue women sports get cut. I'm skeptical. I I I certainly think you can't deny that it's going to happen, but at a massive scale, I I I'm not
Gary D Stocker (16:35.31)
Ha ha ha ha.
Greg Chick, PhD (17:01.812)
A believer in it. I think it's too embedded in the culture. as you said, sports is a part of American culture. The college system has served this country for over a hundred years. I think there's just too much passion there. I think that's what's driving a lot of political action. People don't want to see these sports cut. I think it's it's what gives us our edge internationally and at the Olympic level. so I I I don't
I don't think we're going to see massive cuts to programs. I do think we're going to see some. You know, this is all just a wonderful opportunity for athletic directors to to cut the programs they've never liked, anyways, right? And and just wave their hands. There's not what else can we do? We're athletic directors. We're paying coaches fifty million dollars to not coach. And we're we're buying you know, ice factories for our athletes to recover and and waterfalls lazy rivers in their locker room. So
We can't afford a a a mild wrestling program. you know, it's it's a good excuse for athletic directors to to cut programs, but I don't think it's gonna be widespread.
Gary D Stocker (18:07.02)
Interesting. So you mentioned earlier earlier on in the show that there's as we speak, there is activity in Washington DC. So here's the blunt question of the show, Greg. Will Congress give the NCAA the antitrust protection at once?
Greg Chick, PhD (18:23.869)
I don't think so. you know, what's what's what's funny about what's going on now with this cruise and Cantwell compromise that's that's in front of Congress right now, that's being discussed as we speak, is the people that have come out against it, interestingly, is the SEC and Big Ten. They're the ones that are standing at at the at the edge of of the precipice pushing against this when it's been them driving this the last five, ten, twenty years.
if if you don't know, the latest proposal seeks to pool media rights, which is to say, you know, they just like all the other professional leagues that we're all familiar with, the NFL, Major League Baseball, NHL, NBA, instead of letting conferences battle it out for television rights, pooling media rights would allow all D1 schools to to sell their media rights to all these different broadcasters.
but that would likely cause a cut in how much each of those Big Ten SEC schools get. And of course they don't want that. so now the funny thing is, is when you ask Congress for help, you know, you ask the government, you know, the tax man to help you, they're gonna help you in the way they want. I think it was it was Matt Brown at Extra Points who said, you know, those two conferences have pissed off a lot of people, excuse my language, along the way.
Gary D Stocker (19:22.115)
Yeah, yeah.
Gary D Stocker (19:42.508)
Greg Chick, PhD (19:45.118)
there's no one in Big Twelve country that wants to hear Texas, Oklahoma, Crypoor, or any of the other conference realignment where's where these what was once historically regional conferences have now just been torn apart and we have these national conglomerations. so it is are they gonna get a antitrust exemption? Not as it's it's built now. it's certainly a lot closer than it was with the Score Act with this Cruise Cantwell compromise, but it's not there yet.
And you can see that they're giving ground more and more and more. And now, you know, the big part of what differentiates the Score Act from this compromise is that employment is not mentioned in the legislation, which is a big conceit on the Republican side. So we're we're inching closer to something. But I just think now you've got these two power players in the Big Ten and SEC that are opposed. I don't see that getting rectified. I just think they're just gonna keep spending money lobbying and it's not gonna go anywhere until they sit down with the players.
Gary D Stocker (20:26.318)
Yeah. Yeah.
Gary D Stocker (20:44.772)
Going going back to that collective bargaining kind of thing you were talking about. Yeah. So let's take a second talk about your dissertation, because you looked backward with the work that you did on your dissertation to understand the present. What what's the next major research project or even data blind spot you're looking at?
Greg Chick, PhD (20:46.643)
Yes, yeah. Collective bargaining, yeah.
Greg Chick, PhD (21:04.175)
man, the I mean, if you're into data, like now is the time to be into college sports and college sports finances. It's like if you could pick a time in the since the beginning, like this would be the time because there are so many policy changes. Like from a econometric policy perspective, it's just natural econometric experiments all over the place. You know, my my dissertation used a difference in difference methodology to understand the impact of a policy that
allowed the top schools to reward cost of attendance stipends but which which was only applicable at the D1 level. So you could see this difference between how D one and D two was impacted. And those type of effects and policies are happening all over the place from NIL going into effect, now revenue sharing transfer policy. So you know this is an econom econometrician's d dream right now. and as well as just like I think there's a lot of interest in in the money that's
being driven by these institutions, by this industry. and now that labor has a a seat somewhat of a seat at the table, they're getting they're getting a bigger share of the pie. there's a lot more interest in how that's all going to play out. So what's next? I mean, everything. I've I've got in in my pipeline looking at the athletic foundations, you know, all these big programs have charitable foundations that drive donations and and donate to the school and then
You know, funny thing, you know, they're all public nonprofits. So you can look at their nine ninety returns and and pull data from to see how they operate and and see how much they pay their CEOs and the people that run those organizations. I I love I really love to talk about coach pay, athletic director pay, the people that run these these nonprofit athletic department foundation pay. and now general manager pays. Now these these really big schools all have general managers for their teams and
Gary D Stocker (22:37.688)
Yeah. Yeah. If we
Greg Chick, PhD (22:55.197)
I assure you they're not doing it for nothing. So a lot of lot there's a lot of grown ups who are very well paid in this industry. And now that the the the the labor that student athletes are gonna slice, it's it's the end of the world. So I really like to to highlight that in my work.
Gary D Stocker (22:58.382)
Ha ha.
Gary D Stocker (23:12.512)
Interesting. So I one last question. Let me that's the the Gary the Gary scenario. So we talked about this earlier, and let's assume a scenario where power fours start cutting non-revenue sports at a faster pace. Is it possible the power six and the FCF c FCS colleges will create those Olympic type sports programs as enrollment and revenue incentives instead?
Greg Chick, PhD (23:43.529)
Yeah, so i i there's so many ways it could play out. Like I guess if you accept your idea that all the power force schools are gonna cut those programs, where do they go? Yeah, I think it makes I think it makes sense. Yeah, the the group of six schools would scoop up all those elite players and try to drive, you know, attention and revenue for themselves that way. you know what I I even if I was in my in I don't think that's realistic, but I do think what could happen is you're gonna get schools that specialize.
Gary D Stocker (23:52.386)
Yeah, yeah.
Greg Chick, PhD (24:13.428)
You know, a lot of the schools could cut volleyball, but I don't see Nebraska ever cutting volleyball because they just filled a hundred hundred seat stadium with their women's volleyball team. I think you're gonna get specialization. You know, I I don't I just can't see Oregon cutting their track and field program. They're very well known for developing elite Olympic athletes, and it's a big part of Nike and and what they're doing over there. So I could see a lot of schools cutting track and field, but you're gonna get specialization at these different schools. And I think
Gary D Stocker (24:19.972)
Right.
Gary D Stocker (24:24.345)
Right.
Interesting.
Gary D Stocker (24:41.621)
Interesting.
Greg Chick, PhD (24:43.312)
I think if if massive cuts happen, that's the reality that will happen. You're you know, I we're gonna see there's already been massive cuts to hockey traditionally. So I think the schools that have survived are are gonna stay with with ice hockey. In fact, if you see schools like Penn State add in ice hockey as a div from a club to a D one program, that's an interesting story in itself. But I I think you're gonna see schools specialize. You know, is it wrestling, is it lacrosse, is it field hockey? Like school I that if the worst case scenario is that.
happening. But to take your case, yeah, I think there is an opportunity for those lower tier group of six schools to also, you know, pick up athletes because ultimately, you know, any program cut has a trickle down effect of where those elite athletes go. so there is opportunity if schools want to make a name for themselves. You know, if suddenly there's less volleyball programs and Nebraska's and a few other programs are the only dogs in town, you know, th there's opportunity there to really s to stand out. So
it could be interesting what the trickle down effects of that could be.
Gary D Stocker (25:44.042)
Interesting. Well, my guest has been Greg Chick, who is the founder of Nilnomics, N I L you know, N you know, I C S, of course. Na in N I L stands for Name, Image and Likeness. And Greg, some fascinating observations on this. Appreciate you taking time to join me on the program. And for those who have questions about what Greg talked about today, you can Greg, how can they how can they reach out to you?
Greg Chick, PhD (26:07.866)
thanks, Gary. yeah, you can go to my website, www.nilnilnomics.com, on Twitter, on LinkedIn, those are my social medias of choice, my poisons, I suppose. but yeah, the newsletter is free. Would love to have you join and and follow along with my research and analysis.
Gary D Stocker (26:25.902)
Greg, appreciate it. We'll talk to you again soon.
Greg Chick, PhD (26:28.021)
Thanks so much, Gary.