The world of college athletics is facing a seismic shift following the landmark $2.8 billion anti-trust settlement between the National Collegiate Athletic Association and the five power conferences. As colleges prepare to directly compensate student athletes, athletic departments find themselves in a precarious position, with many already struggling financially. The settlement, which allows schools to pay athletes up to $22 million annually through television and ticket revenues, along with an additional $5 million to $10 million for unlimited scholarships, has administrators bracing for tough decisions and potential cuts to sports programs.
Even powerhouse programs like Texas A&M, led by athletics director Trev Alberts, cannot guarantee the safety of all 20 sports under their umbrella. Alberts, who previously faced the gut-wrenching decision to cut football and wrestling at Nebraska-Omaha to save the department from financial ruin, understands the gravity of the situation. With only two power schools reporting a net income of more than $30 million in 2023, the hefty price tag of remaining competitive in this new era looms large.
The settlement also raises complex questions surrounding Title IX compliance and the equitable distribution of revenue among male and female athletes. While football and men's basketball generate the most revenue, Title IX laws protect students from gender-based discrimination and require equal opportunities for participation. Attorneys specializing in NCAA sports law and Title IX, like Mit Winter, acknowledge the legal minefield universities must navigate, with the potential for unintended consequences and further antitrust lawsuits.
Administrators are grappling with how to proportion revenue shares among sports while adhering to Title IX regulations. The settlement's confidential terms, which reportedly allocate 90% of back damages to former football and men's basketball players, may set a precedent for future distributions. However, pursuing unequal revenue shares favoring male athletes could lead to Title IX violations, with legal ramifications determined on a school-by-school basis in the courts.
One potential solution being explored is utilizing Name, Image, and Likeness collectives as third-party entities to distribute revenue shares, potentially providing legal protections. The NCAA has also promised incentives for athletic departments to bring NIL collectives in-house, aiming to create a more holistic and transparent model. Jay Ezelle, a university adviser and attorney representing several NIL collectives, believes authentic NIL deals will become increasingly important as booster money potentially dwindles.
As administrators navigate this uncharted territory, they are seeking guidance from legal teams and player leadership committees. The SEC's Greg Sankey emphasizes the importance of player feedback and the opportunity for a better way forward, while acknowledging the uncertainty and potential for collective bargaining discussions. Oklahoma athletics director Joe Castiglione highlights the need for caution and patience in building a sustainable long-term model.
The settlement's impact extends beyond revenue sharing, as athletic departments face a new reality of financial discipline. The days of lavish spending on facilities and capital projects may come to an end for many programs, as the flow of money shifts directly to the players. Trev Alberts, who has long advocated for addressing the expense problem in college athletics, believes this new landscape will force a reframing of priorities and create a more disciplined approach to spending.
