Here's a story from yesterday from ESPN. Revenue sharing is coming. At the same time, as you will read,
the most expensive men's college basketball rosters heading into next season are commanding $5 million to $7 million in NIL payments.
Some excerpts:
How much money will schools be spending on future payments to athletes?
Sources told ESPN that while terms could change, the current proposal would create a spending cap for each power-conference school based on 22% of the average media rights, ticket sales and sponsorship revenue of each power-conference school. Sources say they expect that cap number to be nearly $20 million per school. Schools would not be required to spend that much money on their athletes but would have the option to share up to that $20 million figure with them.
The cap number could change every few years to reflect changes in the overall revenue of schools. It's not clear whether some money the schools already provide to their athletes -- such as an academic reward of roughly $6,000 commonly referred to as Alston payments -- would count toward that cap. Multiple sources did tell ESPN that donations from boosters are not included in the revenue formula.
How will they divide that money among their athletes?
There are no specific provisions in the proposed settlement that spell out how schools should distribute money to athletes, according to sources. Each individual school would be responsible for deciding which athletes to pay and sorting through the uncertainty around how that money would apply to Title IX regulations, per multiple sources.
Title IX requires colleges to provide equal opportunities for men and women to compete in varsity sports and provide equitable benefits to those athletes. The law, written long before athletes were earning money beyond their scholarships, does not clearly state how the federal government views direct payments to athletes. Does equitable treatment require a school to give the same dollar amount to men and women athletes in the new revenue-share model? Or would the payments be viewed more as a benefit that could be proportional to the money generated by each sport? Would scholarship dollars and additional revenue-share dollars be considered in the same financial category when balancing the Title IX ledgers?
"The truth is, no one knows," a source told ESPN on Friday.
While the Department of Education or Congress could provide answers proactively, neither has demonstrated any urgency to do so at this point. Specific interpretations of Title IX often come through litigation, and in this instance, a group of athletes might need to file a lawsuit about how their school is handling these direct payments to establish clarity.
Until then, the most conservative approach for schools to ensure Title IX compliance would mean evenly splitting the new revenue-share dollars between men and women athletes. Sources say some schools might try to balance the overall spending by increasing scholarship opportunities on their women's teams, but it remains unclear whether that would satisfy Title IX regulations. Others might seek a competitive advantage in football recruiting, for example, by arguing that equitable treatment for athletes in the case of revenue sharing should be based on the revenue their sports generate.
Sources also said the settlement won't require schools to share money with all athletes or share it evenly among athletes -- leaving those decisions up to individual athletic departments as well.
What happens to collectives and NIL payments?
According to a source, the settlement does not include any provision that would put an end to the booster collectives that currently serve as the main vehicle for paying athletes. School officials hope a settlement will create a way to strengthen the NCAA's ability to enforce its rules, including its rule that requires NIL payments to be for a player's market value as opposed to the current system, which frequently serves as a workaround for "pay-for-play" arrangements. However, drawing a distinction between those two types of payments would remain a difficult, nebulous task. Any attempt to completely eliminate the NIL collective market would take a substantial change in federal law provided by Congress.
The NCAA has created new rules this spring that allow schools to be more directly involved in finding NIL deals for their athletes. New state laws are also opening doors for the schools to use their own money to pay for an athlete's NIL rights as opposed to those funds coming from a third party. The extent to which each school continues to be involved in finding NIL opportunities for its athletes in a future with revenue sharing could vary significantly.
"The feeling in the industry is that collectives are going to be forced to stay outside the universities, and it will become more of a discrepancy of the haves and have-nots," said an industry source. "If you bring collectives in, any money raised would count toward the cap. But schools can hit the cap and still have collectives as third parties. That's the fear, and why there needs to be regulation."
What does this mean for major college basketball and leagues outside power conferences?
It's still relatively uncertain how this would impact major college basketball schools outside of the power conferences.
Schools in the Big East, which is the most prominent basketball-forward league in the country, haven't been given any formal guidance on how a settlement would trickle down to their level.
The prevailing sentiment is that leagues outside the power conferences named in the lawsuit, including basketball-forward leagues, will have the opportunity to opt into the same 22% revenue-share formula, which would be applied to their specific revenue.
The most expensive men's college basketball rosters heading into next season are commanding $5 million to $7 million in NIL payments, per sources. It's too early to determine whether leagues outside the power football conferences will be able to pay that much through revenue sharing.
The uncertainty about how the power conferences will settle the antitrust claims is leaving many administrators outside those leagues in what they describe as a difficult situation.
"All of the Group of 5 is in a wait-and-see mode, which is a precarious situation," one source told ESPN. "It is extremely tough to lead athletic departments, universities and conferences and plan for the future -- whether that be facilities, NIL, etc. -- when you have no seat at the table to make the rules that will impact you."
The Full Story:
The NCAA and its schools are considering a deal to settle its antitrust cases. What would this mean for paying players, NIL collectives and non-power schools?
www.espn.com
