photo by: Nick Krug

Kansas senior wide receiver Luke Grimm (11) gets a hug from Chancellor Douglas Girod prior to kickoff against Colorado during the senior recognition ceremony on Saturday, Nov. 23, 2024 at Arrowhead Stadium.

The house has come down on college athletics.

Named after a suing student-athlete, the class action lawsuit commonly known as House v. NCAA had its long-awaited settlement approved earlier this month. Beginning July 1, college athletic programs can start handing out about $20.5 million worth of annual payments to their student-athletes.

Schools aren’t obligated to make the payments, but — as athletic directors and coaches will loudly say — if you want to attract talent and win championships, it is highly recommended that you write $20.5 million in checks.

To be able to afford that, however, college athletic departments might start seeking more and more money from their universities’ general operating funds, which are designed to pay the bread-and-butter costs of providing education to students.

Don’t expect the University of Kansas to start pulling money out of its general fund to transfer to the athletic department to pay student-athletes. But do expect the university’s general fund to be stressed by the situation nonetheless.

KU Chancellor Douglas Girod told the Journal-World he indeed expects the university’s general finances to be impacted by the House decision. Rather than the university writing a check to Kansas Athletics Inc., though, Girod is expecting fewer checks to come from Kansas Athletics to the university’s general fund.

While perhaps not commonly understood, KU’s athletic department does send actual money to the university’s general fund every time it provides an athletic scholarship to a student, for example. In 2023, the financial statement for Kansas Athletics showed it paid the university approximately $7.6 million for tuition, $60,000 for meals, and $2.7 million for housing. At least $9 million of additional payments were made to the university for what accountants call trade payables, which can be everything from utility bills to maintenance on facilities owned by the university but primarily used by the athletics department.

In the new world of paying student-athletes, it is appearing likely that universities themselves will have to take a pay cut.

“The reality is they are not going to be able to keep doing that,” Girod said of the athletic department payments to the university. “They are not going to be able to support us the way they have in the past, I suspect.”

LAWRENCE, KS – September 19, 2024 – Head Coach Lance Leipold of the Kansas Jayhawks, Director of Athletics Travis Goff and Chancellor Girod during the beam ceremony at David Booth Kansas Memorial Stadium in Lawrence, KS. Photo by Missy Minear/Kansas Athletics

Specifically what will happen hasn’t been determined at KU. Girod acknowledged that a possibility is KU would allow Kansas Athletics to pay a reduced tuition rate for its student-athletes. While not specifically mentioned by Girod, other possibilities could include KU’s general operating budget simply absorbing some costs, like utilities and maintenance, that are currently reimbursed by Kansas Athletics.

“All of that is what we are going to have to figure out because it is clear that they don’t have the budget to keep doing what they are doing,” Girod said.

More specifically, they don’t have the budget to keep doing what they are doing and pay $20.5 million to student-athletes. As the Journal-World reported last month, Kansas Athletics has been cutting its budget already. The department cut about 30 positions to save $3 million, and has been making other reductions to its budget.

Girod, though, characterized those cuts as ones simply needed to balance Kansas Athletics’ budget. They won’t go far in producing the $20.5 million to pay student-athletes. That number, by the way, isn’t a static one. The settlement calls for the spending cap to increase each year as the overall revenues of the college athletics industry increase. Girod, who is the incoming chair of the Big 12 Conference board of directors, said he expects the cap will grow by about 4% per year.

It is unclear, even with more budget adjustments, whether KU thinks it will be able to offer the full $20.5 million to student-athletes during the next fiscal year, which begins July 1. Athletic Director Travis Goff has previously stopped short of saying that KU would hit the cap, but last month told the Journal-World that KU will be sharing revenue at “a maximum competitive level.”

“I probably won’t give you (the number) to the penny, but yes, the answer is that’s just what it’s going to take,” Goff said in May to a question about where KU would be in relation to the cap, “and we’re not interested in launching in this new realm at any kind of disadvantage.”

photo by: Kansas Athletics

KU athletic director Travis Goff speaks at volleyball coach Matt Ulmer’s introductory press conference on Tuesday, Jan. 21, 2025, at Horejsi Family Volleyball Arena.

Last week, Girod told the Journal-World that KU will be spending more on student-athletes in the next school year, but likely wouldn’t hit the $20.5 million cap.

“I don’t think we will get all the way there in that first year,” Girod said of the $20.5 million cap. “We also are trying to maximize some of the other benefits.”

For example, the House settlement removes scholarship limits for many sports programs and replaces them with roster limits. Many sports — almost all, except for football and basketball — have long had more players on their rosters than the university has full scholarships to offer. The result is many student-athletes received far less than a full scholarship. With the settlement, universities might start giving more full scholarships on those teams, although the overall numbers of student-athletes on a roster likely will shrink. It will take money to fund those scholarships, but dollars used to fund scholarships generally don’t count against the $20.5 million cap.

The fact that KU likely won’t spend all the way to the cap in year No. 1 is a sign that there is a limit to how much Girod and others are willing to have the general university support the athletic department.

Keeping athletics as a self-supporting entity has long been a major talking point. Girod has long noted that KU is part of a small group of universities across the country that don’t provide major subsidies to the athletic department. As KU embarked on its more than $400 million renovation of David Booth Kansas Memorial Stadium, Girod insisted that any new debt for the project be placed on the books of Kansas Athletics Inc., rather than as part of the package of debt that the general university is responsible for paying.

Girod has said keeping athletics self-supporting is critical because the university is facing significant budget challenges with the university’s educational operations, funding from state legislators is most appropriately used for producing degrees, and students and parents are becoming more demanding that tuition rates be kept in check.

photo by: Chad Lawhorn/Journal-World

Renovation work at David Booth Kansas Memorial Stadium is pictured on June 13, 2025.

But many of those comments were before the House settlement, and before it was ever thought likely that athletic programs would be allowed to pay student-athletes tens of millions of dollars a year.

Now, many universities are going to have to grapple with the thorny question of whether tuition rates actually should be raised to help support athletic programs. That’s why those who are interested in following the most important trend in college athletics may be advised to watch boardrooms rather than stadiums or fieldhouses.

One such sign was evident in a recent meeting of the Kansas Board of Regents, the group that oversees the state’s public universities. Last month, Wichita State University President Richard Muma was explaining to the Regents the need for a 3.5% increase in tuition at the university. Among the reasons presented: WSU needs to use general university dollars to provide $3.5 million in funding to WSU’s athletic department.

Wichita State is an example of a program that already understands competitive disadvantage in the world of big-time college athletics. The Shockers don’t have a football team, and aren’t a member of one of the Power 4 athletic conferences. That means ticket revenues and television money are a fraction of what KU receives as a member of the Big 12 Conference. Wichita State in 2024 had about $34 million in athletic department revenues compared to about $135 million for KU.

Even so, Wichita State finds athletics important for its students and alumni. WSU got national attention when its men’s basketball team made a run to the Final Four in 2013, and has a championship history in baseball with seven World Series appearances and a national championship that its fans desperately want to see revived.

While the math likely doesn’t work for WSU to pay $20.5 million to its student-athletes at any point in the foreseeable future, it likely will have to pay some money to attract enough talented athletes to keep some of its athletic dreams alive.

That’s why its president ends up in front of the Board of Regents with a pitch that some would consider difficult: Approve a tuition increase, allow a sizable portion of that new money to be used to subsidize the athletic department, all at the same time that WSU will cut at least $7 million from the general operating budget of the university.

Approval of the request, though, was never in any real doubt. The Regents approved the tuition increase last week without raising any concerns about the athletic department component.

Thus far, that’s not the pitch Girod finds himself making. He’s careful to note that the university isn’t proposing to send a large check to the athletic department. Rather, the checks the athletic department send to the university likely will be smaller. When a reporter notes that seems like a subsidy for the athletic department, given that the general university had grown to expect the revenue, Girod said he doesn’t think of it quite that way. But he also said it may not matter much what it is called. The pain is likely to be the same.

“I would argue it is them supporting us less,” Girod said, rather than the general university supporting athletics more, “but the impact is similar. That’s just the reality of where we are at.”