Texas AD Expects House Settlement to Raise Annual Expenses by $11.5M

In a letter to boosters, University of Texas athletic director Chris Del Conte said that Texas is projecting  annual athletic department expenses to increase by $11.5 million in the wake of the House v. NCAA settlement.

Del Conte's department also expects to pay between $22 million and $23 million to its athletes as part of “NIL renumeration.”

"Texas Athletics is a self-sustaining unit of the university,” Del Conte wrote, as reported by Yahoo Sports. “To ensure that we continue sponsoring championship-level programs in our pursuit to define what it means to be the world’s best intercollegiate athletics program, Texas Athletics will continue to rely heavily on the generosity of our valued donors coupled with revenue generation through media rights, sponsorships and ticket sales. The anticipated new NIL and scholarship benefits available to student-athletes are expected to rise on a year-to-year basis, with potential costs for additional scholarships estimated at $11.5 million annually in support of our 21 varsity programs.”

The letter noted that Texas’ revenue share from the NCAA will drop by $1.5 million over 10 years to help the NCAA pay for the settlement. The settlement also includes an increase on roster limits, as some programs will be able to offer scholarships to every player on the roster. As Yahoo Sports reported last week, schools are not required to opt into the settlement and revenue sharing may be limited or nonexistent at schools whose athletic departments don’t break even.

Texas has one of the richest athletic departments in a college sports landscape in which numerous athletic departments do not break even. "At the very least, Del Conte’s letter is a glimpse into the new reality that athletic departments are facing as college athletes are now getting paid and former ones are being compensated.outlined how UT’s athletic department finances will be affected by the House v. NCAA settlement," Nick Bromberg of Yahoo Sports wrote.

Related: Michigan AD Manuel Expects $50M in New Athletics Costs After NCAA's $2.78B Settlement

The settlement, which comes after years of lawsuits from former college athletes over their lost earning power due to previous NCAA rules, was given preliminary approval last Monday. The NCAA and its member schools will pay roughly $3 billion to former athletes who did not retain their name, image and likeness rights while they were playing as part of the NCAA’s previous amateurism model.

Related: Judge Grants Preliminary Approval for $2.78B NCAA Settlement

Additionally, schools will directly start paying players through revenue sharing. Players currently capitalize on their NIL rights via endorsements and sponsorships along with deals with third-party booster collectives.