College sports as we know them are about to change. How much are they going to change? We aren’t sure yet.
The proposed settlement in the House vs NCAA court case has been approved by two of the Power conferences.
The Big 12 had approved the proposal on Tuesday, followed by the ACC. The SEC and Big Ten are expected to follow suit this week.
House vs NCAA is a case brought by former athletes who were barred from earning NIL when they played for NCAA programs. The proposed settlement will encompass two different aspects of the case.
The first will be retroactive. Former students will be awarded damages to compensate them for the NIL revenues they missed out on because of NCAA rules that prevented such business deals at the time. The expectation is that if this case (and some others) went to trial, those rules would be found to be violating anti-trust laws all along, whether anyone realized it at the time or not.
The second component will be how the NCAA operates moving forward, and a big part of that will be revenue sharing. Schools will be allowed to share up to $20 million with athletes.
The settlement does not declare the student-athletes as employees and would not include collective bargaining. The revenue sharing would be voluntary. Schools would not be required to share revenue, nor would they be required to share all $20 million.
This settlement will be a big change for college athletics, but many questions remain.
Will the revenues be shared equally? What happens to NIL?
Thus far there does not appear to be requirements surrounding how the schools will share the $20 million in revenue. They could share it equally with every student-athlete who plays for the university in a given school year, meaning the star quarterback on the football team will make equal money to a member of the rowing team.
This would seem the most equitable way to distribute the money, and some schools might do it, but it isn’t likely. Most schools will probably skew the revenue toward the sports that make the most money and toward the athletes that draw the most eyeballs. The revenue will probably become a key recruiting tool for the biggest sports like football, basketball, and baseball.
There have been posts that a part of this settlement will involve bringing NIL management in-house to the schools. The exact meaning of this is to be determined, but it likely means that schools will be able to broker deals for student-athletes.
This doesn’t necessarily mean collectives will go away. Nor does it mean that student-athletes would have to include the school in negotiations. If they wanted to strike an NIL deal with Dr. Pepper on their own, they would still be allowed to do that.
NIL will probably be more coordinated with the university than ever before, but it won’t be going away. Just because a power program must limit its revenue sharing to $20 million doesn’t mean it can’t still add $10 million more in collective NIL money to its war chest.
Will walk-ons go away?
This is one question that has a lot of people concerned, including Clemson Football head coach Dabo Swinney, who was a walk-on. There has been discussion that this settlement could include ending the policy of allowing walk-on players.
While this idea strikes a nerve with a lot of fans, there is logic behind the concept.
If walk-ons were allowed at the same time revenue sharing was put in place, a school could simply share enough revenue with the athlete to cover their tuition and expenses, essentially making the walk-on a de facto scholarship athlete.
Think about it this way: this source says the average cost of tuition is around $26,000 per year. For other expenses, let’s set it at $35,000 per year. At that rate, a school could essentially offer up to 571 extra scholarships for their athletic programs if they chose to do so.
We know schools would not dedicate the entire amount to extra de facto scholarships – I illustrated that simply to make a point – but they likely would dedicate some of it towards enticing more athletes to their programs.
There might still be time for someone to come up with a reasonable solution to the walk-on concern. Keep your fingers crossed.
Will this settlement bring anti-trust protection?
The primary problem the NCAA faces in the modern landscape of college athletics is that many of its rules have been found to violate anti-trust laws. This frustrates a lot of fans because college athletics worked so well with the traditional model of amateurism for a very long time.
This is oversimplifying the explanation, but the money in college athletics was modest enough that no one felt the athlete’s rights were being violated. In other words, even if they were allowed to make NIL, would there have been any NIL there to make?
That has changed as media coverage and television deals matured in the late 20th century. The incredible amount of revenues being shared highlighted the ways the traditional model violated anti-trust laws.
Professional sports have anti-trust exemptions because their rules are negotiated between the leagues and the players, who are represented by a union. This allows them to create rules that govern things like player movement between teams, rules for negotiating with free agents, consequences for off-field behavior, etc. In other words, most of the things that are a big problem in college sports: excessive use of the transfer portal, tampering, etc.
Will this settlement give the NCAA (or any other governing body) an anti-trust exemption to create rules to govern player movement and enforce them? Probably not, but we don’t know just how far a settlement in a court case, even at the federal level, can give the NCAA protections.
In other words, this sounds great, but it probably won’t keep players from transferring five times in four years, nor will it prevent School A from offering a player twice the revenue shares that School B is sharing with them to entice them to transfer.
Does this strengthen the NCAA’s place in the industry?
There has been speculation for years that there could be a schism in the NCAA soon. It could be driven by sports, primarily by revenue-generating sports like football and basketball. It could be driven by conferences that want to run the show themselves.
A breakaway of some sort from the NCAA could still happen, but one truth remains – if there is no NCAA, something (or someone) must fill the void of administration and oversight.
The NCAA is to college sports what Roger Goodell is for the NFL. Fans might dislike Goodell, but if the NFL fired him, they would just hire a replacement. That replacement might handle things differently, but they would still serve the same purpose.
Now that the NCAA will be responsible for overseeing not only the sharing of revenue moving forward, but also the administration of retroactive damages to former student-athletes, does Greg Sankey want to be in charge of managing that, even if he is delegating?
Does anyone want to be in charge of creating a new organization to replace the NCAA, or be in charge of modifying the SEC or Big Ten to fill a vacuum left by withdrawing from the NCAA?
Maybe the answer is still yes, but my guess is that this settlement has probably pushed any such action back a bit until the dust settles on some of the questions we still have.
How does this impact Clemson Football?
Clemson Football head coach Dabo Swinney has stated before that the Tigers use their NIL funds for retention, not acquisition. He does not want the relationship between the program and the player to be transactional in nature. He wants the relationship to be based on something more than just how much money the player can make.
Clemson can continue that philosophy under the terms of the House vs. NCAA settlement if it chooses, as far as we know. The Tigers can still focus revenue sharing on their current players and make no guarantees to the players they are recruiting.
Time will tell how different schools and conferences decide to ration the $20 million to be shared every year. There is one thing we do know with relative certainty: there are some schools out there that don’t have deep pockets with NIL that will now have upwards of $20 million in revenue sharing to use in the acquisition of players.
For those who are still saying ‘But that violates NCAA rules’, remember that most rules restricting how schools offer NIL have been suspended by an injunction issued due to the lawsuit filed by the states of Tennessee and Virginia against the NCAA. It is thought that any outcome or settlement of that case would eliminate NCAA rules that prevent a player from being able to negotiate their NIL value to the fullest, which includes being able to discuss that before commitments and (likely) before entering the portal (another reason why collective bargaining might still be the ultimate goal to get such things under control).
Clemson’s limited efforts in the portal have not yielded results, but they have continued to find the personalities in high school recruiting that value what Clemson can offer over what schools like Miami, Tennessee, Ohio State, or Texas A&M can offer in NIL. Will they still find those players when South Carolina, NC State, Auburn, Penn State, Wisconsin, and others can also jump into that game?
Only time will tell how this might impact Clemson Football.
