By Robert J. Hansen | OBSERVER Staff Writer
Sacramento State’s push to build a new 25,000-seat football stadium and pursue a spot in the Football Bowl Subdivision (FBS) is unfolding against a backdrop of sweeping changes in college athletics — changes that will reshape the entire structure of Division I sports.
So says Roger Noll, a Stanford University professor emeritus who has spent the past 50 years studying the economics and business of sports.
Noll served as a court expert for the plaintiffs in O’Bannon v. NCAA — a case over athletes’ rights to their “name, image, and likeness” (NIL) — and in Alston v. NCAA, which the U.S. Supreme Court decided in 2021, striking down limits on certain education-related benefits for athletes.
Both cases laid the groundwork for the recent House v. NCAA settlement, finalized in April, which is reshaping the economics of college sports.
“House was a third antitrust case … which sought damages to all students who played college sports in the prior 10 years for the amount they were underpaid,” Noll said. “The settlement transferred $2.8 billion to former college athletes.”
The House settlement has two major impacts, Noll said. First, it removes limits on how much student-athletes can make through NIL deals and allows universities to have NIL collectives, which are groups who raise money to pay athletes. Second, it creates a $20.5 million annual cap for each school on how much athletes can be paid directly as part of their scholarships above cost of attendance — a cap that applies across all sports, not just one.
“That $20.5 million is to be spread across all sports programs the university has,” Noll explained. “It’s not like a pro cap, which just applies to a particular sport.”
Sacramento State athletic director Mark Orr said that change is already influencing the school’s strategy to elevate football.
“We’re actively seeking support, both in terms of fundraising and in corporate partnerships and local businesses, to be able to give our student-athletes more opportunities to earn income under name, image, and likeness,” Orr said. “We want our supporters in Sacramento — whether you’re a business owner or a donor — to support our student-athletes and earn that extra income. … It’s certainly going to help us in recruitment and retention.”
Noll believes this cap will trigger major changes in Division I sports over the next few years.
“If you’re a school like Sac State, which is not in FBS, there’s really no good reason to continue to play football at either an FCS [Football Championship Subdivision] or Division II level. … My expectation is that all football programs are pretty much going to become either FBS or Division III. There’s not going to be anything else left.”
Orr said Sac State’s path forward depends heavily on football, the economic engine that powers most collegiate sports programs.
Sacramento State’s football program recorded an operating deficit of $2.85 million in 2024, reporting $6.67 million in expenses against $3.82 million in revenue, university documents show. The university covered the shortfall through institutional support and student fees, a common practice across college athletics
Beginning in the 2026-27 academic year, the university is moving most of its sports from the Big Sky Conference to the Big West Conference, which offers a better geographic and institutional fit for non-football sports. “In the Big West, you’ve got mostly UCs and CSUs, and we have a lot of alumni in Southern California,” Orr said. “Travel’s easier, it helps with recruiting, and it makes sense from a budget standpoint.”
But the Big West does not sponsor football. That leaves only two possible routes for Sac State to move into FBS football: an invitation from an existing FBS conference or play as an independent. So far the school hasn’t received an invitation nor NCAA clearance to play an independent football schedule — Sac State has appealed.
The cost of playing at the FBS level will rise sharply, Noll said, especially as powerhouse schools in the Power Four conferences — Southeastern Conference, Big 10, Atlantic Coast Conference and Big 12 — spend close to the cap. “Michigan, USC, Ohio State, Alabama, Georgia, Texas — those schools are going to spend $20 million a year on salaries,” he said. “There’s no chance in hell you’re going to be able to compete with them if you’re Sac State in recruiting anybody.”
Sac State’s challenge, Noll said, is to raise enough donor and sponsorship money through NIL programs to remain competitive — something harder in a city without a large corporate base. “Finding companies that are going to want to be NIL sponsors of your athletes is going to be difficult,” he said.
Noll points out structural quirks in the new rules that give some schools an advantage. Of the $20.5 million cap, $2.5 million can go toward additional scholarships beyond current limits — which benefits schools with lower tuition. At Sac State, tuition is a little over $10,000 annually, meaning it could fund nearly 100 additional scholarships. At Stanford, where tuition is around $60,000, that number would be about 21.
“Why in the world do we want a world where BYU can have endless numbers of scholarships more than the schools it competes against?” Noll asked, noting BYU’s annual tuition is only $4,500 thanks to church subsidies.
The across-all-sports nature of the $20.5 million cap also creates incentives to cut smaller sports, Noll warned. “Every time you spend money on women’s volleyball, that’s the same amount of money that gets subtracted from the football program,” he said. “That’s created a huge incentive to get rid of sports.”
Noll predicts a future where Division I schools specialize in just a handful of sports, with far fewer teams overall. That will be tricky given schools must still meet requirements of Title IX, the federal law requires equal opportunities for all genders in education, including athletics.
Orr views the changing landscape as a reality Sac State must adapt to. “It’s changed how we recruit, how we retain student-athletes,” he said. “We’ve embraced it, and we’re going to be aggressive with it. It’s important to our mission.”
Noll said the instability created by the House settlement and related rule changes will accelerate. “The next five years are going to be as disruptive as the past five. I expect a whole new world … another big realignment and a complete redoing.”
He said the NCAA is still trying to preserve a status quo that’s “never going to succeed” by seeking exemptions from both employment and antitrust law — efforts he sees as futile. “History is not on its side,” he said. “We’re sort of done with essentially indentured servitude for college athletes. That’s over.”
Orr, while embracing NIL and revenue sharing as “outstanding and well-deserved,” said these changes have forced Sac State to be more proactive in both retaining and attracting players. “The days of a student-athlete spending four years at one institution without transferring … it is dwindling,” Orr said. “You’ll see more transfers leaving Sac State, more transfers coming in. And again, that’s OK — it works both ways.”
Noll explained that the collapse of the FCS model is likely inevitable. Currently, top FCS teams can sometimes upset weaker FBS teams, but the new environment — with open transfers and salaries at FBS schools — will strip FCS of competitiveness.
“There’s no way on God’s earth you’re going to be able to compete against FBS schools in FCS in the future,” Noll said. “That means FCS is no longer viable.”
Orr contends that the FBS leap would bring “millions upon millions” to the school in potential new revenue if media rights and ticket sales rise. “The Pac-12 media rights deals are somewhere around $10 million a year per school … and certainly things like donations and ticket sales all go significantly up if you’re playing an FBS schedule,” he said.
The Hornets have not received an invitation to join the Pac-12.
Noll also flagged another flaw in the House settlement. “The first premise … is that NCAA schools acting together can set caps on salaries, and that’s not true — that’s an antitrust violation,” he said.
Orr emphasized the broader value of athletics for Sac State. Beyond the revenue potential and the competition itself, he said, sports strengthen student retention, alumni connections, community partnerships and donor relationships. “Athletics and successful athletes, particularly in football and basketball, can be a gateway to a lot of connections,” he said. “(College President) Dr. (Luke) Wood embraces that as part of an overall university strategy.”