A message about UC Berkeley’s response to changes in intercollegiate athletics

The following message was sent to the UC Berkeley community by Chancellor Rich Lyons on Wednesday, June 11.

Dear Academic Senate Colleagues,

I am writing today to share an important update regarding our university’s response to the ongoing changes in intercollegiate athletics.  As some of you may know, a number of lawsuits filed against the NCAA and the leading conferences were consolidated into what is now known as the “NCAA House Settlement.” The settlement was preliminarily approved by the court last October and was just finalized on June 6th. With this development, there will be major changes across college sports, beginning on July 1, 2025.

There are two key components to this settlement agreement.  First, it will allow universities to provide up to $20.5 million annually to student-athletes through a revenue-sharing pool that will, in our case, be made up of Athletics revenues, philanthropic funds, and some campus funds. For institutions that participate in revenue-sharing, the funds will primarily be provided to student-athletes in the form of compensation for the use of their “Name, Image, and Likeness” (NIL).

The agreement’s second component will eliminate NCAA team scholarship limits and establish, in their place, team roster limits, which will cap the number of student-athletes per team (over time, reducing the total number of intercollegiate athletes in our current sports at Berkeley from around 900 to around 800). At the same time, universities will be allowed to increase the number of scholarships allocated to each of their teams. While no decisions have been made about any increase in our own scholarship allocations going forward, I expect any adjustments from central funds to be minimal.

My decision-making process was informed by valuable input and guidance I received from numerous members of our community, including the Academic Senate. After considering the various trade-offs, I decided that we will participate in this new revenue-sharing model in order to provide our teams with the necessary investments and resources they need to excel. I have also decided that our campus contributions to the new revenue-sharing pool must be matched by incremental philanthropic support donated specifically for this purpose. To motivate and inspire this level of philanthropy, particularly in this transition year, I have committed to match gifts to our revenue-sharing pool up to a maximum of $6m for football, $1.5m for men’s basketball, and $500k for women’s basketball. The amount allotted to each team is a direct function of the revenue each currently produces, consistent with the revenue-sharing principle in the House Settlement.   

This was a difficult decision in the midst of tumultuous times for higher education. I am convinced that failing to participate in revenue sharing next year would close off a number of valuable options for our university in the future.  For example, after the collapse of the Pac12 conference last year, Cal was allocated an additional $25m per year, starting this year, for three years, funded in part by UCLA’s sizable media contract from its new conference. The Regental discussion at the time indicated that this $25m per year could continue for an additional three years only if certain conditions were met. A failure to invest in revenue sports over the next two years would materially reduce the likelihood that the allocation will continue for a full six years. 

At the end of the day, the real question is how this all connects to our mission. From where I sit, alumni engagement is critical to our ability to support Berkeley’s mission: They send us great students; they give our students internships; they teach for us, not to mention their role in the $7.3 billion capital campaign we recently completed. No single element of what we do has a greater, beneficial impact on alumni engagement than Intercollegiate Athletics, especially our football and basketball programs. Reasonable people can disagree on whether we get enough of what I refer to as “mission-advancing return” on our investment in Athletics. But there is no question that the return is important to all that we do together. (We just, for example, received the largest gift ever to Athletics, $26m, from a donor who in the last couple years gave the largest gift ever to the Haas School.)

While revenue-sharing is, at the moment, the best way to ensure our status and relevance at the highest level of intercollegiate competition, we must recognize that future developments can and likely will affect our actions and funding plans. I assure you that we will be carefully monitoring the situation, and we will continue to provide transparent reporting to the Senate in support of meaningful collaboration and partnership. I know that we share an expectation of greater fiscal accountability and responsibility when it comes to Cal Athletics’ finances, including revenue generation.

I am grateful for Senate partnership over the past year as we have analyzed the changing landscape of intercollegiate athletics.  In particular, I want to thank the CAPRA Subcommittee on Athletics that invested significant effort alongside the administration to analyze where we stand as a great research university in terms of athletics. That analysis included consideration of what our best options will be if sufficient success is not achieved in the coming years as the result of our investment in Athletics, up to and including a reduction in those investments. 

While this message does focus almost exclusively on our investments in, and the finances of Cal Athletics, I want to assure you that I remain committed to upholding the highest academic standards for our student-athletes. By the same token, I am in the process of finalizing plans for new, significant investments in our research and education, particularly in the face of reduced federal funding. Those investments will be many multiples of the Athletics investments addressed here. I expect to share details about those plans in short order.

My continuing thanks to you all.

Fiat Lux,

Rich