The world of college sports has changed dramatically over the last few years, but this move could be the biggest one yet.
In a landmark House settlement, schools will be allowed to pay athletes directly for the first time. After over 20 years of litigation, lawsuits and legal red tape, athletes will get compensation directly from the people they play for. However, this settlement is less of a finality, and more of a stop along the way towards equal compensation for all athletes.
Let’s get into the details of what this allows for schools and athletes. Starting July 1, each school in the NCAA will have to set aside $20.5 million to pay to all their athletes. While each school sets aside this amount, universities don’t have to use all of that during a fiscal year. According to Ross Dellenger of Yahoo Sports, this number is set by taking 22 percent of the average of certain power school revenues, most notably ticket sales, television dollars and sponsorships. This number won’t stay at $20.5 million, though. Because of cap escalators, Ohio State AD Ross Bjork told Dellenger that the cap could reach $25 million quickly.
Just because there’s a new settlement doesn’t mean that Name, Image and Likeness (NIL) is going away. Athletes can still get NIL deals on top of what could just be called a salary from the university, making this almost similar to what professional athletes get. Even though NIL will still remain a thing, the settlement created a College Sports Commission (CSC) that will try and keep NIL as third party agreements and not as additional salary.
Now that we’ve established some details, let’s break down who this is good for, who needs to start asking more questions and what happens next.
Who is this good for?
If you’re a college football or men’s basketball player at a Power 4 school, this is great news for you. Some major programs are reportedly going to spend up to 90% of that revenue on football and men’s basketball according to ESPN. The revenue numbers from these sports massively outpace others, and the complaint heard from these programs was that it wasn’t fair that they had to share their revenue with sports that don’t make as much money. Now, with the new settlement going in place July 1, these sports will potentially be taking almost all of the money up for themselves.
In addition, if you’re at a Power 4 school, this settlement gives you much more freedom to use all that $20.5 million to better your rosters. More schools in the P4 can afford to use all of that money to nab players from out of the transfer portal and also keep the bottom of the roster from transferring out.
Who does this affect negatively?
Women’s sports, Olympic sports, and mid-major Group of 5 schools could be getting the short end of the stick. Based on projections of how schools will be using this money, there’s not a lot of capital left for women’s sports or other Olympic sports after football and men’s basketball take the lion’s share. With the way that the revenue sharing is structured now, women’s sports could unfairly gets the short end of the stick. Not only that, but Olympic sports could be forced to move to the club level. According to Sports Illustrated, some Olympic sports won’t see any of that revenue money, facing threats of being cut from lesser programs overall. The trickle down effect that revenue sharing was supposed to bring might not bring anything to these programs, and it stinks for those involved.
For these lesser programs, a lot of questions will have to be asked. Not every athletic department has the capability of pulling in $20.5 million to throw at their programs, and it hurts their ability to not only bring in players, but retain their top athletes. In a story done by Nick Domingue of Ragin’ Review, the University of Louisiana opts into this new world, but they also have to acknowledge that they simply can’t spend the same amount as the power conferences can. Remember how that $20.5 million number was crafted? Yeah, they didn’t really ask what the G5 could bring to the table. Domingue reports that most G5 administrators say that they can only get to $1-3 million to pay directly to athletes. The G5 is kind of in a “damned if you do, damned if you don’t situation”, because if they don’t opt into revenue sharing, it drastically hurts their ability to recruit. This means smaller schools will have to use NIL funding to pick up some of the slack, but with the CSC now a thing, that makes it even more difficult.
What’s next?
Well, first the NCAA has to back pay $2.8 billion to athletes who played from 2016-2024 for lost NIL value. On top of that, NCAA President Charlie Baker is STILL fighting to block student-athletes from being called employees, in what feels like a battle that’s been going on since the dawn of time. In addition, the NCAA wants to create an antitrust exemption to limit athlete’s earning power.
On the flip side of this, athletes now have to go through collective bargaining in order to shore up some issues now that they’re collecting checks directly from schools. However, in order to go to collective bargaining with the NCAA, there would have to be a players’ union involved. A union can’t be involved because unions are for those employed by the company, and the NCAA still won’t call players employees…and we’re back to square one. The first goal should be for the NCAA to finally drop the employee thing, so the collective bargaining can set limits on transfers and set a salary cap that’s equal across all programs.
There’s bound for more to unfold from this decision, but come July 1, a new world will be unlocked for college sports.
