When the University of Pittsburgh relieved Heather Lyke of her duties as athletic director Sept. 9, the move surprised many in Pitt’s athletic community and beyond.
Those closer to the situation were less shocked.
Just days before Chancellor Joan Gabel made the decision to fire Ms. Lyke, multiple sources told the Post-Gazette that the athletic director was prepared to give a presentation about her plan for the department — a plan that Ms. Gabel felt didn’t sufficiently address the financial challenges facing Pitt and its athletics program.
The differing visions of the future played a major role in Ms. Gabel’s decision, Pitt Board of Trustees Chairman John J. Verbanac told the Post-Gazette after a public meeting of the trustees last month.
“The truth is, we’re experiencing tremendous change in collegiate athletics in America today. When you look at what those challenges are today — versus what they may have been at some other point in the history of the university — [they] are very different paths,” Mr. Verbanac said.
“The chancellor [and] many in our athletic department, our coaches and the like, have all been engaging in the challenges that the future now creates, and it culminated in [Ms. Gabel] making the decision in terms of wanting to move in a new direction with some leadership.”
Ms. Lyke, 53, whose base salary was $1.06 million in 2023, was hired by then-Chancellor Patrick Gallagher in March 2017. She signed a contract extension in 2018, tying her to Pitt through 2024. During her tenure, the athletic department had plenty to brag about.
Under the Canton, Ohio, native, Pitt football won its first ACC championship, the men’s basketball program rebounded into NCAA tournament contention, the volleyball program made it to three consecutive Final Four appearances, both men’s and women’s soccer enjoyed substantial postseason success, and wrestler Nino Bonaccorsi won a national championship.
Behind the scenes, Pitt decision-makers were more concerned with the financial future of athletics.
Ms. Lyke, hired in part for her skill in leading a department without running afoul of NCAA regulations, faced new challenges when a sea change suddenly meant universities had to raise huge sums to pay student athletes. Her ambitious plan in January 2020 to build a $240 million facility in Oakland for non-revenue sports had raised just under $12 million to cover its costs, Ms. Lyke said in her last public update on the project, in April 2023. And sources told the Post-Gazette that number hadn’t changed much by the time she was fired.
Some of the challenges Pitt faces are universal to athletic departments in the ever-evolving world of Name, Image and Likeness, or NIL. And an estimated $20 million-a-year obligation to former student-athletes, outlined in a preliminary settlement last week of a lawsuit against the NCAA, will add further financial stress.
But Pitt has additional challenges that are unique, largely because of decisions that will linger for years to come.
The Post-Gazette talked to dozens of people close to, inside and adjacent to the athletic department who requested anonymity due to the sensitive nature of Ms. Lyke’s removal. While respect for her past work was a common theme, so was the feeling that change was necessary. Mr. Verbanac’s statement supports information provided by those sources and paints a picture of the type of administrator Ms. Gabel hopes to hire next.
That person must lead Pitt into a world where athletics becomes ever-more dependent on fundraising and talent acquisition in a de facto pay-for-play environment.
Lingering financial issues
Pitt’s next athletic director will be tasked with finding new ways to balance the department’s budget. That won’t be simple with the coming changes in collegiate athletics and NIL practices.
According to its latest Equity in Athletics Disclosure form, Pitt athletics generated $136.7 million in revenue from its 19 varsity programs. That’s tens of millions short of what giants like Ohio State, Texas and Alabama pull in annually, according to a USA Today database tracking college athletic department revenue.
In the final week of Ms. Lyke’s tenure, her department was to present its initial plan for funding itself while addressing the $20 million a year for the next 10 years that likely will be needed to pay student-athletes in the settlement of a court case known as House vs. NCAA. A preliminary agreement was reached Monday with a final ruling expected to come in April.
On Sept. 6, Ms. Lyke was scheduled to present plans to pay for that settlement while retaining all 19 varsity sports. Sources said Ms. Gabel thought Ms. Lyke’s strategies lacked detail and didn’t sufficiently address the financial challenges the university — and Pitt athletics — face.
Sources said Ms. Gabel took issue with how Ms. Lyke’s proposed budget didn’t involve enough new outside funding. At least one version of the proposal asked the university for additional new funding, which sources said was a bridge too far for Ms. Gabel. The scheduled presentation was ultimately canceled.
Three days later, the chancellor, who called athletics the “front porch” of a university at the board of trustees meeting last month, told Ms. Lyke that she had been relieved of her duties.
Ms. Lyke declined to answer questions submitted by the Post-Gazette. Efforts to reach Ms. Gabel for comment also were unsuccessful.
Victory Heights
As Ms. Lyke exited Pitt, construction crews were busy digging into the side of Cardiac Hill on the campus in Oakland, raising steel beams to hold up the newest home of Panther athletics.
But even as the work continues, Pitt officials have major concerns about how the university will pay for Victory Heights, set to open in 2025 next to Petersen Events Center.
Ms. Lyke signed on to the project in January 2020, a few months before the COVID-19 pandemic hit — and 18 months before the NCAA would begin its NIL era. The facility will house 16 intercollegiate athletic programs with an indoor arena that seats 3,000 for volleyball, wrestling and gymnastics, plus practice space, sports medicine space, offices and more.
Ms. Gabel was hired in April 2023. When she came on board, she began raising questions about the strategy and financing behind the project.
On April 27, 2023, Ms. Lyke updated reporters on the progress of Victory Heights, noting that the project would cost more than $240 million. She also said about $12 million had been raised toward construction of the 240,000-square-foot facility.
At the time, Ms. Lyke said there were “a lot of naming rights opportunities” available for the arena, the sports performance center and courts inside Victory Heights that could help cover some of the construction costs. She conceded there had been challenges in getting financial commitments.
Asked whether two years was enough time to raise the needed funding, Ms. Lyke said the athletic department was prepared to take on debt.
“Two years is enough time to continue to raise money,” she said. “We will debt-service the rest of it. Whatever’s not [raised], that’s in our financial plan over the next two years.”
As of Sept. 9 — when Ms. Lyke was fired — sources at Pitt said that no significant fundraising had been allocated toward Victory Heights since that presentation, and that the actual total of fundraising was marginally less than the reported $12 million.
Once the new chancellor began poring over Victory Heights’ financial details, sources said, she had questions about the reasoning for taking on major facility upgrades without pre-raised funding.
Some athletic department staffers had similar concerns. The financial plan for Victory Heights posed a stark contrast to how Pitt went about funding construction of the Petersen Events Center, which opened in April 2002.
By the time Pitt broke ground on the events center June 15, 2000, the university had already secured about $48 million — some from the state and a $10 million donation from John and Gertrude Petersen — toward the $119 million project.
That $48 million represented about 40% of the cost of The Pete; only about 5% of the cost of Victory Heights was on hand as construction continued there.
And then came the question of whether there was even a need for such an expensive facility for non-revenue sports. Football and men’s basketball are the primary revenue sources for college athletics, and neither would directly benefit from the project.
That question would loom larger after 2020 as collegiate athletics changed.
In July 2021, the NCAA began allowing college athletes to profit from their name, image and likeness. That kicked off a race among athletic departments and their affiliated NIL collectives to raise money for deals to attract top athletes from both the transfer portal and high schools.
Since then, NIL spending pressure has further intensified, as rules continue to loosen allowing collectives to work more directly with universities. The House v. NCAA settlement allowed universities to remove scholarship caps and created a revenue sharing agreement projected to require major programs to share the estimated $20 million with their student-athletes in the first year, with the cap increasing on an annual basis.
NIL
In addition to covering the costs of that settlement, funding for future NIL deals also will be a primary concern for the new athletic director. It will require working closely with Pitt’s main NIL collective, Alliance 412, which is primarily funded by alumnus Chris Bickell, founder and CEO of Well Hive, a software company in Melbourne, Fla.
According to the website On3, collectives pool funds from donors to help create name, image and likeness opportunities for student-athletes through an array of activities.
Independent of a university, collectives most often “pool funds from boosters and businesses, help facilitate NIL deals for athletes and also create their own ways for athletes to monetize their brands. The term ‘collective,’ which generally means a cooperative enterprise, has no particular legal significance,” On3 said.
Businesses can facilitate endorsement deals for athletes through these collectives or, in many cases, individuals can make contributions in exchange for invitations to events with coaches and athletes, exclusive merchandise or the simple pleasure of supporting their favorite players.
Sources close to Alliance 412 said they didn’t see Ms. Lyke embrace enough new ideas and opportunities related to NIL funding.
Pitt was clearly not completely out of the game. In August 2023, Alliance 412 launched Oakland Originals, a marketing firm for its signed athletes. Shortly after, the collective announced a new, seven-figure deal that allowed each of the 85 scholarship football players on Pitt’s roster to get paid. While Alliance 412 was not willing to disclose the exact financial terms, the deal, on average, provided each scholarship football player with five figures of income.
“I love what we are providing these players,” Mr. Bickell said in Alliance 412’s announcement video in August. “NIL is real. It’s here to stay. Providing these players an impactful opportunity that can help their lives means a lot to me.”
In the offseason following the 2023 season, star tight end Gavin Bartholomew was a top target for other teams looking to lure talent with NIL deals. Mr. Bartholomew told the Post-Gazette he received offers “well into the six figures” but decided to stay when Pitt offered a competitive package. Details of the deal were not disclosed.
Still, those at Alliance 412 want to further bridge the gap between Pitt and the college athletics giants. Around the country, NIL collectives are searching for ways to bring in top-tier talent, and the murkiness of the rules has opened the door for creative ideas.
One such idea involves Collegiate Athletic Solutions, an Atlanta-based private equity firm that offers low-interest loans to universities and NIL collectives. Sources close to Alliance 412 said partnering with CAS was being eyed as a possible solution to Pitt’s need for additional money.
Under that strategy, CAS would provide the athletics department a one-time loan of up to $200 million that could be used at the university’s discretion to budget for talent acquisition in the revenue sports of football and men’s basketball.
CAS would be repaid with money Pitt receives each year from the ACC Network — with an interest rate that wouldn’t overtax the future of the university’s athletics, sources said. The Associated Press reported earlier this year that the ACC distributed an average of $44.8 million to its football-playing members for the 2022-2023 season.
In June, the Big 12 reportedly was considering a partnership with Luxembourg-based CVC Capital Partners that included a cash infusion of $800 million to $1 billion in exchange for a 15% to 20% stake in the league, according to CBS Sports.
Since the NIL era began, the two major donations that have helped Pitt raise funds toward such payments have been a six-figure donation from former Pitt All-American football player Aaron Donald and Mr. Bickell’s $20 million. Sources told the Post-Gazette those donations were made without a great deal of campaigning from the athletics department.
New direction
When Ms. Lyke was hired in 2017 from Eastern Michigan University, she brought a background in compliance — running athletic departments under NCAA regulations.
At Pitt, she earned the admiration of many as a result of the success of many sports.
“The contributions made by Heather Lyke during those years to create what we have today are greatly appreciated,” said Mr. Verbanac of the university’s board of trustees.
“Upon her arrival at Pitt in 2017, Heather guided our program through a unique period in college athletics and we thank her for her leadership during that time,” Ms. Gabel said in a statement issued when Pitt announced Ms. Lyke would not return.
“However, as we enter a new era in college athletics, one that seems to change by the day,” she said, “we need a new vision and a new leader of our athletics department.”
At the moment, the university boasts two No. 1-ranked teams nationally — in women’s volleyball and men’s soccer. Pitt’s football team is 6-0 for the first time since 1982 after defeating the University of California, 17-15, on Saturday. It finished its nonconference schedule undefeated, a first in program history.
After reportedly being a finalist for the athletic director’s job at Northwestern University in August — just weeks before being fired at Pitt — Ms. Lyke has now found a job as acting president and CEO of LEAD1, an advocacy group representing athletic directors of the 134 member schools of the Football Bowl Subdivision.
“It is an honor and a privilege to step into this role and to serve an organization that has meant so much to me and so many other athletic directors,” Ms. Lyke said in a statement when she took on the role
But she was clear that leading an athletic department continues to be her goal.
“While I look forward to once again serving on a campus, I will pour my heart and soul into the association to ensure a smooth transition within the NACDA family,” she said.
Pitt has assembled a seven-person advisory committee to guide the search for the university's next athletic director. The committee is headed by Mr. Donald, head men's basketball coach Jeff Capel and senior associate athletic director Pat Bostick.
Post-Gazette reporter Maddie Aiken contributed to this report.
First Published: October 13, 2024, 9:30 a.m.
Updated: October 14, 2024, 7:39 p.m.
