Stanford, SMU may consider controversial financing measure to join ACC

At least one of the schools considering joining the ACC is willing to take a very controversial measure to fund its move.

Amanda Christovich of Front Office Sports reported that either Stanford, SMU or both are not only willing to forgo any revenue sharing from the conference's media rights deal, but are considering using their endowment funds to finance their respective athletic departments.

Christovich spoke with a sports financing expert who said that the endowments are not the same as savings but noted that Stanford only spends 5% of its endowment per year. That said, a telling part of this report is that a decision to internally fund the athletic department through a school's endowment could have multiyear implications:

It’s unclear how much of that remaining funding could be reallocated to sports, though. The vast majority of funds are previously earmarked by donors for specific purposes that can’t be changed. In Stanford’s case, 75% of the school’s endowment is already spoken for.

In an act of desperation, a school like Stanford could decide — via a vote by its Board of Trustees — to reallocate some of the funds. But Stanford or SMU would have to agree to do so for up to the next 13 years, which may not be palatable to the boards — or the alumni rich enough to single-handedly fund the transition.

Colleges across the country earn revenue from tuition, donations and endowments. The latter, however, has been feeling the pressures from inflation in recent years, according to Bloomberg. Moody's Investment Services said that schools will have to contend with increased costs of construction, labor and utilities. Tapping in to endowments is always a fraught conversation at colleges, but to consider doing so for sports would set off even more heated debates among their communities.

Stanford has been looking for a new conference home after Oregon and Washington decided to bolt the Pac-12 and join the Big Ten along with USC and UCLA, two schools that agreed to the move last year. Utah, Arizona and Arizona State are leaving, along with Colorado, for the Big 12. As of now, only Stanford, Cal, Washington State and Oregon State -— four schools that have been a part of every incarnation of the conference since the 1910s — would remain in the Pac-12 as of 2024.

SMU, meanwhile, has been looking for a return to the big time of sorts, nearly four decades after the NCAA's "death penalty" for playing players.