Texas A&M University is cutting its athletics department budget by nearly $10 million in response to the House Vs. National Collegiate Athletics Association (NCAA) settlement that allows colleges to pay student athletes who represent them, according to the Austin American-Statesman.

Newsweek contacted Texas A&M University for comment on Tuesday via email outside of regular office hours.

Why It Matters

College sports, particularly football and basketball, can generate hundreds of millions of dollars, yet historically, the student-athletes weren’t paid beyond their scholarships.

However, this was challenged by ex-Arizona collegiate swimmer Grant House in 2020, and on June 6, a federal judge approved a settlement, allowing NCAA Division I schools to directly pay their student athletes for the first time.

What To Know

On Monday, A&M’s athletic director, Trev Alberts, told reporters he plans to cut staff and other spending in response to the House v. NCAA settlement, which requires each university to pay its student athletes $20.5 million drawn from revenue-sharing agreements.

The settlement was agreed upon provisionally in May 2024 before being signed off by a judge last month.

A fact sheet presented by Albert indicates a combination of cuts and projected revenue increases should boost the department’s coffers by around $26.5 million.

The athletics director indicates $4 million will be saved by cuts to the number of administrative employees, $2 million from cuts to sports teams, around $1 million from reduced spending related to the number of student athletes and $1.8 million from cuts to the Alston Awards, which is funding student athletes can spend on their studies.

The fact sheet also suggested a cut will be made to funding for the 12^th Man Foundation, which pays for “scholarships, programs and facilities” for A&M athletes.

According to the Austin American-Statesman, Alberts said his department is currently “a little heavy” in terms of executive staffing, suggesting there will be cuts in this area.

Alberts said football is A&M’s only net revenue-producing sport, though the money for student athletes will also be spread across men’s and women’s basketball, baseball, volleyball, and softball.

In April 2024, the Texas A&M athletics department reduced its workforce by 18.

Earlier this year, the NCAA updated its policy on transgender athletes, limiting competition in women’s sports to those who were born biologically female, following an executive order signed by President Trump.

What People Are Saying

Speaking on Monday, Alberts said: “This [settlement] has to work for the future of college athletics.

“It’s worth saying, you know, an unregulated market that we’ve lived in the last three to four years is not in the best interest of anybody, including the student-athletes.”

Referring to players’ name, image and likeness (NIL) agreements, Alberts added: “We’re going to have (a) best-in-class, fair-market value, NIL strategy.

“It’s where I think Texas A&M has a great strategic advantage… bringing all of our combined assets together to create the best fair-market value NIL strategy for all of our student athletes, [that] should be a separator for us.”

What Happens Next

It remains to be seen how having paid student-athletes will transform NCAA Division I competitions going forward.