Much has been written about the NCAA’s latest court case vs. House. The pending settlement, the evolution of the college model, revenue sharing and more. Let’s try to break down what all of this means, how it may or may not impact college sports, D1 sports, High School Sports and more.
In the House v. NCAA case the six defendants (NCAA and the Power 5 conferences) all of which have approved the terms of the House settlement. Many of the elements in the settlement are things you see in pro league collective bargaining agreements (Revenue Sharing being the largest element).
For the now Power Four Division I conferences (Big Ten, Big 12, ACC and SEC) the annual revenue sharing cap of $22 million for all of a school’s athletes is one. Note this revenue sharing is only for those four major conferences at the current time and doesn’t apply to Group of 5, FCS, Division II or Division III. It also should be noted that its no wonder the College Football Playoff continues to expand, opening up additional revenue for the Power 4 programs to help offset this additional annual cost for revenue sharing.
The revenue sharing now moves (partially at least) from a 3rd Party model (aka Collectives) to the role of the Universities. The revenue sharing enforcement mechanism that has recently come to light is another factor that likely will evolve but not finalized at this time. The NCAA already stated and now is reinforcing it will require athletes to report 3rd party #NIL deals to a central authority make sure the deals are “true NIL” for “fair market value,” and not “pay for play.” Note for High School athletes the NCAA has already stated that all deals over $600 must be disclosed at the time of signing a National Letter of Intent.
The obvious difference between the House settlement and pro leagues is that the House revenue sharing cap model that the NCAA has fought for. The enforcement of such a cap, and things like new roster limits (scholarship and walk-ons) were not collectively bargained in the House v. NCAA case. Because some of the items were not collectively bargained the NCAA and its member institutions remain vulnerable to antitrust attack from future college athletes.
Which is why the NCAA will continue seeking an antitrust exemption from Congress and its been clear if you have been watching closely that all the lobbying the NCAA and its members are doing is centered around the goal of securing an antitrust exemption from the Federal Government. (Note you may remember Ted Cruz, Nick Saban and others going to Capital Hill recently….that was to try to gain the trust to move the anti-trust exemption forward.
Speaking of revenue cap enforcement, the mechanism in the House v. NCAA case seeks to prevent 3rd party NIL deals from serving as “pay for play,” and as a way to evade the revenue sharing cap. This seems to admit the payments from schools to athletes themselves are “pay for play” despite being classified as Name Image and Likeness payments, which is very interesting. In my opinion, this should be concerning for the NCAA, especially if the antitrust exemption fails as it will have exposure by saying these athletes aren’t employees. This is worth watching closely as these new direct payments from NCAA Power 4 schools to athletes could make it harder to fight the employment issue in the courts.
While we have some level of closure we have a lot more open-ended issues with the House settlement, including those around Title IX, NIL Collectives and more. It’s going to be fun helping schools and others navigate this new world and all of the legal issues it will present. For now, we will be monitoring this closely. Note the House v. NCAA case applies to D1 (Power 4 programs) only. Any program outside of those four major conferences will continue to operate the way the have in recent years. This however will likely create an even larger gap in college sports, which will impact High School recruiting, player development and a host of additional items beyond this.
As always we continue to monitor this situation and advise our Recruit Route and Bedford Agency clients on be practices and insight into this new era of college sports. If we can help you, please reach out to us at bedfordagency@gmail.com or visit us at http://www.thebedfordagency.com