photo by: Chance Parker/Journal-World photo

Kansas football coach Lance Leipold speaks during an event Tuesday, Aug. 15, 2023 to unveil new plans to renovate David Booth Kansas Memorial Stadium. Brian Hanni, second from left, KU athletic director Travis Goff, KU Chancellor Douglas Girod, Gov. Laura Kelly and KU alumnus Chris Harris Jr. were among those in attendance.

In ordinary aspects of life, if you ever find yourself saying “FanDuel to the rescue,” check your faculties — although maybe check your wallet first.

The online betting site isn’t usually the best of rescue plans.

But the world of big-time college athletics is anything but ordinary, and thus, maybe the gambling industry might be part of the solution for college athletic programs that are wondering where their next big chunk of revenue will come from.

In a recent interview with KU Chancellor Douglas Girod, I found it noteworthy that tapping into the gambling industry for support of college athletics was the first idea he mentioned when talk turned to how KU and the Big 12 Conference might be able to remain financially competitive in an era where it looks like college athletes will start getting paid.

“There are a couple of dynamics we haven’t talked about,” Girod said. “Sports betting is one of them. It is huge. The numbers will blow your head up with the amount that is already taking place today.”

To be fair, Girod stopped short of endorsing the idea of college athletics getting in partnership with the gambling industry. He acknowledged that there needs to be discussion about “the impact that can have on our sport.”

But Girod also said there is a natural question begging to be asked: “Is there a way some of that revenue should come back into the sport to help support the entity that they are actually betting on?”

Girod didn’t start spitballing specific ideas for how that system might work, but others at various times have floated the concept that some sort of tax would be placed on each bet, with the proceeds going back to universities and athletic conferences, Mit Winter, a Kansas City attorney who does significant legal work in the area of college athletics, told me.

“That is a big conversation to have at both the national and the state level,” Girod said of college athletics financially benefitting from the gambling industry.

Whether anything ever comes from it is far from clear. After all, most of the conversations around gambling and college athletics have not been positive, often focused on scandals that have emerged. Just last year alone, the University of Alabama’s baseball coach was fired over suspicious betting activity involving his team, and Iowa and Iowa State announced that they suspected a combined 41 athletes at their schools had broken betting rules, the AP and others have reported.

The greater significance of the gambling idea is that it is a sign university leaders really are open to blowing up the old ways of thinking that have surrounded college athletics.

Girod, in the Journal-World interview earlier this month, said as much.

“Our traditional way of viewing the world will have to get turned on its head,” Girod said. “We’re going to have to get pretty creative.”

Calculators, as much as anything, are helping university leaders come to that conclusion. Here’s a look at some of the numbers that KU Athletics is facing:

• No one knows how much universities will have to pay college athletes in the future, but $20 million a year is the starting number that has been mentioned in a proposed settlement agreement involving the NCAA and the major conferences. That number is expected to increase over the years. Under the terms of the settlement, KU and other schools wouldn’t be obligated to pay the amount, but they likely will have a tough time recruiting the most talented student athletes if they don’t.

• KU is spending nearly $450 million to renovate half of its football stadium and add a convention and conference center that it hopes will attract restaurants, retailers and other amenities to create a “Gateway District” on the KU campus. As we reported earlier this month, Girod said KU Athletics certainly will have to take out more than $100 million in new debt to finish the project, which otherwise is being funded through donations. Some numbers released by KU indicated the debt amount could be closer to $150 million. Depending on the amount, the interest rate, and the length of bonds, KU could be paying $15 million to $20 million a year in new debt payments for a decade or more.

photo by: University of Kansas/HNTB

This rendering shows the most recent design for a renovated David Booth Kansas Memorial Stadium. The rendering also shows some possibilities for ancillary development on the east side of the stadium, although KU is still awaiting proposals from developers on that portion of the project.

• KU likely will receive about $4 million to $5 million less in media rights revenue from the Big 12 Conference than it did a year ago, according to multiple national reports. Overall, the Big 12 Conference earned more total media dollars than it did a year earlier. But, the conference had 14 schools in it instead of 10. Dividing the money up among those 14 schools resulted in the 10 holdover schools getting less than they did the previous year.

• KU Athletics heads into this uncertain time period with some signs of budget problems. The department is expected to have about a $2 million budget gap in this current fiscal year, which concludes at the end of the month. KU Athletics has cash reserves to cover the gap, but the department strives to have a balanced budget each year. Furthermore, next year’s budget is uncertain. Despite the new fiscal year starting on July 1, KU Athletics won’t have a budget in place. Department leaders have said they want to wait for more information to emerge about changing finances in college athletics before setting a budget for the next year. Look for a new budget to emerge maybe in September.

One piece of financial news that may be coming is a name change to the Big 12 Conference. Multiple national media outlets have reported the Big 12 Conference is in discussions to rename the conference the Allstate 12, referencing the Allstate insurance company. How much the Big 12 Conference would get paid to make that name change isn’t yet clear. Girod didn’t comment on the name change issue at all.

But compared to other ideas that the Big 12 is talking about, the name change is pretty straightforward. A more complicated idea under consideration is allowing private investors to essentially invest in the future of the conference, and thus share in future revenues.

CBS Sports reported earlier this month that the Luxembourg-based private equity firm CVC Capital Partners is considering investing $800 million to $1 billion into the Big 12 Conference in exchange for a 15% to 20% stake in future revenues.

The Big 12 would be the first conference to do such a deal in college athletics. It would take the approval of presidents and chancellors across the conference, though. Girod did not comment on any specific proposals the Big 12 may be considering.

In general, though, he said any partnership with private equity firms will require Big 12 leaders to have a very good understanding of the terms of the deal.

“They are not in it for philanthropy,” Girod said. “Obviously, you go into this eyes wide open.”

The fact that there could be investors willing to partner with the Big 12, though, is a good sign, Girod said. It also makes sense that there would be interest from the private sector, he said.

“A lot of people are interested in getting involved in this space,” Girod said. “It is such a popular space with the American public. After the NFL, college football is probably the biggest media market there is.”

Winter, the KC-based college athletics attorney, said he thinks conferences and universities have to be open to the idea of private investors. However, he said he think some parts of the idea are misunderstood by the public.

He said the idea that these private equity companies would own a portion of the conference probably won’t come to be. The Big 12 Conference, for example, is a nonprofit entity. It can’t sell a portion of itself to a private entity and still keep its nonprofit status, he said.

Rather, he said, any such deal likely would revolve around infusing the conference with cash upfront and agreeing to terms on how the conference would be repaid over time.

Girod sounded cautious about what those terms might be. He said if private equity firms can help build the conference’s brand — some of the firms have experience in doing that in the professional sports world — that could be worth considering.

“If they are willing to bet on themselves to do that, that is a different conversation than saying, ‘here is some really expensive money to borrow,'” Girod said.

Finally, Girod said budget cutting at the athletic department also could be part of the future equation. The general operations of the university have gone through a period of budget cutting, and Girod said the auxiliary units of the university — everything from the student unions to the athletic department — are next in line to get in-depth reviews.

“The cost reduction piece is not an insignificant part of the equation,” Girod said. “We need to make sure we are operating as efficiently as we can, which we always are trying to do. I don’t know that we have taken a hard, wholesale look in athletics for several years, like we have on the university side.”