Rich Lyons is Cal’s fifth chancellor in the past two decades but nothing like his predecessors.
On the job since July, Lyons doesn’t just wear blue; he bleeds it. He was in the stands for ‘The Play’ in 1982 and in the men’s basketball team’s locker room Wednesday night celebrating a victory over NC State. And his social media game is elite. After ESPN’s ‘College GameDay’ aired live from campus the day of the Miami game, Lyons wrote on the social media platform X: “ESPN rocked it. Cal fans rocked it. Epic morning. Thanks everyone.”
Something else sets Lyons apart from the chancellors who occupied his office over the decades: He talks about college sports in the language of an athletic director, not an academician.
It’s the language of the front lines, not the ivory towers.
During a wide-ranging conversation earlier this week, Lyons deftly addressed the coming era of revenue sharing in college sports. He used the term “Calimony” to describe UCLA’s $10 million payment to the Bears (per a directive from the UC regents). And he uttered the two words that hang over college football like a guillotine ready to severe the sport.
“If there is a super league — and I am not predicting it — but if there is a super league, will it be 40 or 60 teams?” Lyons said. “Cal has not been in the top quartile (nationally) lately. We need to be competitive, so if there is a reshuffling around football, we can make sure we aren’t relegated.”
To that, Lyons added: “If you don’t invest, you aren’t going to be competitive in an average year.”
Given this tipping point moment in college sports — with financial upheaval and conference realignment, with playoff expansion and courtroom defeats, with the SEC and Big Ten exerting their hegemony — the university picked the right time to finally appoint a chancellor who knows footballs are inflated, not stuffed.
But Lyons is an economist by trade.
And he has an Academic Senate to manage.
And he can read a budget.
What he sees from athletics on that front is suboptimal, to say the least.
In their financial report to the NCAA for the 2024 fiscal year — submitted last month and subsequently obtained by the Hotline — the Bears showed a $29.7 million operating shortfall on $119.6 million in revenue and $149.3 million in expenses.
The expense side represents a 17.8 percent year-over-year increase that results, in part, from an accounting change. For the first time, Cal included the Memorial Stadium renovation debt service (approximately $8.5 million) as an operating expense and not an additional cost.
And like all other Pac-12 legacy schools, the Bears suffered a $10 million reduction in conference revenues (approximately) due to the combination of the Comcast overpayment error and the negotiated settlement with Washington State and Oregon State.
What’s more, the financial statement includes $37.2 million in direct support from central campus that’s booked as revenue under NCAA reporting procedures. Without that assist, the operating budget would have shown a shortfall of $66.9 million.
(That’s bad, but UCLA’s numbers are worse. The Bruins reported $119 million in revenue and $170.9 million in expenses for a $51.9 million shortfall in the 2024 fiscal year, according to financial documents. Their campus support, through direct transfers and student fees, totaled $31.6 million. Without that help, UCLA’s operating shortfall would have been $83.5 million.)
Lyons doesn’t see red numbers in black-and-white terms, however.
“We need to be disciplined,” he said. “But part of the story is, this is an investment.”
Lyons rejects the notion that Cal’s athletic department is losing money in the same fashion as a campus auxiliary unit, like residential dining, would report a loss. But athletics should not be treated exactly like an academic department, either, because it drives alumni engagement and provides branding opportunities like no other arm of the university.
More than 3,000 fans attended the pre-dawn broadcast of ESPN’s ‘College GameDay’ from Memorial Glade on Oct. 5, before the Miami game, and the show drew an average of 2 million TV viewers, with a peak audience of 2.5 million.
The next time an engineering school lecture is broadcast nationally will be the first.
“The benchmark of break-even is wrong,” Lyons said of the traditional view that athletics should be treated like an auxiliary unit. “If the English department is 1 and a pure auxiliary is 0, then athletics is .7 or .8. And we have been (treating it like) 0 or .1 …
“A lot of people view it as a two-dimensional problem: ‘If you’re spending on sports, you aren’t spending on other things.’ But this is actually three-dimensional. What is the principal device for driving alumni engagement? When you invest in athletics, you are investing in alumni engagement, and when you invest in alumni engagement, you advance your mission.”
That engagement has never been more important. Division I schools are expected to implement a revenue-sharing model later this year if a settlement to a game-changing antitrust lawsuit, House v. NCAA, is approved in the Northern District of California in April.
The settlement requires athletic departments to share a maximum of $20.5 million with athletes starting in 2025-26, with the majority going to football. Lyons has not “promised anybody we are spending $20.5 million,” but he’s working with donors to provide a philanthropic component.
One concept being pursued: 20-year term endowments “so that Sport X is funded for 20 years,” he explained. “Donors are looking at that … (They) want us to succeed. They understand this is a defining moment for Cal athletics.”
The prime drivers of revenue, of course, are football and men’s basketball. If they thrive, alumni engagement is sure to follow. But both sports have struggled. Basketball hasn’t participated in the NCAA Tournament since 2016. And although football qualified for bowl games the past two years, the Bears have not ended the season with a winning record since 2019.
Meanwhile, the headwinds are fierce: Name, image and likeness and the transfer portal make roster construction more complicated (and costly); the Bears have long flights for ACC competition (and early start times, in many cases); revenue sharing will add a mammoth cost to the budget.
All this comes with Cal (and Stanford) serving as partial-share members of the ACC’s revenue distribution model into the 2030s.
Lyons recognizes the hurdles but believes Cal’s highest-profile programs are currently, or soon will be, funded at levels that provide an avenue for success. As an example: The Bears are negotiating with alumnus Ron Rivera, a former NFL head coach, to join the athletic department in a supporting role.
“Our revenue sports need to be competitive, like so many of our other sports,” Lyons said. “Another six-win regular season (in football) will be disappointing given how much we are investing. We can’t keep investing and not deliver in our revenue sports.”
His tone carried the passion of a fan and the pragmatism of a chancellor overseeing a $4 billion campus budget — all of it framed by what Lyons, who earned his undergraduate degree from Cal in the early 1980s, called his “10-year vision” for the Bears.
He mentioned the energy on campus and within the Cal alumni community when football was thriving two decades ago under coach Jeff Tedford. Not long after, the men’s basketball team was a frequent participant in March Madness.
“I have been around a long time,” Lyons said, “and I can feel, I can taste, the link between athletics and alumni engagement. That doesn’t mean we just keep investing without bounds. But in 10 years, I would like there to be electricity.”
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