It was a most atyipically celebratory day on college campuses nationwide yesterday. Let’s face it, with graduation month all but over on most of them, how crowded with actual students do you suppose they were on a Friday afternoon in June? Let alone the special ones who were actually impacted by the news that THE ATHLETIC’s triple threat of Ralph D. Russo, Stewart Mandel and Justin Williams broke during West Coast gloaming:
A federal judge Friday granted final approval of the House v. NCAA settlement, a watershed agreement in college sports that permits schools to directly pay college athletes for the first time.
The settlement, which resolves a trio of antitrust cases against the NCAA and its most powerful conferences, establishes a new 10-year revenue sharing model in college sports, with athletic departments able to distribute roughly $20.5 million in name, image and likeness (NIL) revenue to athletes over the 2025-26 season.
FRONT OFFICE SPORTS’ Ben Portnoy was among the more infomed reporters who provided context as to exactly why this was such a big deal:
Judge Claudia…Wilken’s ruling concludes what has been a months-long process that had grown fraught at times, but will now see schools embark on a massive overhaul in the way they interact with players and develop a system of enforcement to create rules and regulations related to the settlement.
“If approved, [the settlement] would permit levels and types of student-athlete compensation that have never been permitted in the history of college sports, while also very generously compensating Division I student-athletes who suffered past harms,” Wilken wrote in her opinion released Friday evening. “The reaction of settlement class members has been very favorable, as only a very small fraction of them have opted out or objected. The Court will, therefore, grant final approval of the settlement agreement for the reasons below.”
The settlement centers on three crucial prongs:
- $2.8 billion in back pay to athletes dating to 2016 over lost NIL revenues to be paid over 10 years ($280M annually);
- A new-age revenue sharing formula that allows schools to pay athletes directly;
- Eliminating restrictions on scholarship numbers in favor of roster limits.
In effect, it sets some ground rules and what appears to be a sincere attempt to rein in a system that, since initially implemented, created both imbalance and unease on both large and small campuses, as CBS SPORTS’ Brandon Marcello explained:
NCAA rules have long prohibited players from cashing in on their NIL, but that changed July 1, 2021 when the organization began allowing players to earn money from third parties and collectives… those deals with third parties and collectives outside the revenue-sharing plan will soon face intense scrutiny from a new enforcement entity starting July 1. Experts believe it will help curb “pay-for-play” schemes between boosters and players far beyond perceived market values. Many multi-million dollar deals with high-profile players were struck in the months before the House settlement’s approval so that those deals would not be scrutinized by the enforcement entity.
And that’s primarily because while this will indeed provide a windfall directly from the schools, Marcello’s breakdown points out it will focuses on the haves:
How schools plan to divvy up to $20.5 million among their sports has been a point of contention, with no legal framework to follow. Most schools are expected to mirror the back-payment formula outlined in the $2.8 billion settlement. That means roughly 75% of future revenue will be shared with football players, 15% to men’s basketball, 5% to women’s basketball and 5% to all remaining sports. Some schools have opted to mirror the gross revenue each sport averages, which could lead to more than 85% of the salary pool being set aside for football players.
I
I saw first-hand how disparate and broken the system was during my brief dalliance with NIL on a project I helped engineer two summers ago. When I mused about it back then, I thought for sure it was going to be the first of many such opportunities for moi to cash in at even a fraction of the level that the young men who got a huge payday for a quiet August Saturday morning did. What I naively failed to grasp at the time was that the collective I was working with was one of two that were active on that big-time campus in downtown LA, and the bidding war and grievances that resulted from that competition ultimately drove the one I was working with out of existence. Which meant for me the number of those anticipated follow-ups was, ironically, nil.
And relegating basketball players to what is being projected as one-fifth the level of direct compensation that their football brethren will rake in doesn’t address the degree of movement that sport is seeing. As ESPN expert Jeff Borzello reported last week:
The 2024-25 national championship wasn’t that long ago, but the men’s college basketball landscape has shifted completely.
Nearly 2,700 players entered the transfer portal prior to the April 22 deadline, more than 100 players entered their names into the NBA draft before the April 26 deadline and dozens of high school seniors have flipped commitments following roster additions or coaching changes.
Do the math. That’s a bit more than half of the entirity of Division I men’s college basketball players, assuming a 12-15 man roster at the 363 Division I schools that will be fielding teams in 2025-26. Contrast that with the estimated 3,310 college football players that chose to move on from their 2024 schools, which is just under 30 per cent of the estimated 11,305 scholarship players at the 133 FBS schools. And in basketball, just one or two players are impactful enough to dramatically shift the fortunes of any school.
What that all seems to mean is that there will still need to be a lot of self-policing and an influx of informed adults that will be capable of seeing that the excesses of the recent past are at least somewhat reined in. Late last night, Borzello’s colleagues Pete Thamel and Jeff Passan reported a big step has already been taken along said lines:
Friday’s approval of the House settlement is expected to usher in an imminent overhaul to how college sports work.
One of the most prominent changes came together quickly, as Major League Baseball executive Bryan Seeley was named CEO of the new College Sports Commission on Friday night. Sources told ESPN that Seeley has been the target for the role for weeks, and the long-awaited formalization of the House settlement triggered his hire. Sources told ESPN that Seeley is expected to make seven figures in the new role, as he’ll quickly become one of the most prominent figures in college sports. The CSC is the new era’s enforcement arm that will have final say in doling out punishments and deciding when rules have been broken. It’s one of the most important roles in this new era, as the industry has been craving some type of guidance since the advent of name, imagine and likeness has made the descriptor “wild, wild west” a common one in regard to the generally unregulated college sports industry.
And as the duo explained, Seeley’s already got a huge plate of stomach-churning gruel in front of him to try and dig into–and not a moment too soon, apparently.
The CEO is in charge of running the systems that have been put into place by the commissioners — LBi Software and accounting firm Deloitte have been lined up to handle salary cap management and to manage the clearinghouse for NIL. Those NIL deals will be outside of the revenue share directly from schools, and how they are approved has been the focus of much conversation around college sports. The clearinghouse that Deloitte has established will be known as NIL Go, which will be used to verify whether deals between athletes and boosters or associated entities are for a valid business purpose rather than a recruiting incentive. It’s described as a new technology platform that will be in place to assure that athletes’ NIL deals are in compliance with the rules.
In March, Purdue athletic director Mike Bobinski summed up the role of enforcement in the new era as having to be more efficient and punitive than when the NCAA was in charge of enforcement. “We’ve screwed this thing up now to the point where we have to be willing to draw a line in the sand, and that will create some pain,” Bobinski told ESPN then. “There’s no two ways about it, and we’ll find out who’s just going to insist on stepping over the line. But if they do, you got to deal with it forcefully and quickly.”
Bobinski seems to be forgetting one other small point. If indeed schools are now paying out of pocket for talent, the least that can be expected would be some sort of commitment on the players’ end beyond year-by-year. With mere mortal students, scholarships work that way. Stick around a while and complete a degree program if we’re going to pick up your tab. Devoid of any such actual rules, it’s up to schools to be able to successfully pitch their worth and build those relationships in much the same manner that pro general managers do with their players. Especially the ones that they covet. They expect more than a year, too.
All the more reason that schools of all sizes will need to ramp up their own teams of general manager-led professionals with the ability to understand numbers and vet outsiders–and don’t think in situations where sports other than football have outsized fan bases and impact the need for such level-headedness won’t be greater than ever.
So for perhaps the first time since that lovely morning two summers ago I’m more than a little jazzed about prospects. After all, I’ve got big-school experience on my resume.
Until next time..