NCAA, power conferences agree on revenue sharing in college sports

Major changes are coming to college athletics. On Thursday, the NCAA and its power conference leagues voted to settle ongoing antitrust cases, agreeing to pay out more than $2.7 billion over the next decade to former and current student-athletes. This is compensation for the income college athletes might have earned were it not for NCAA rules.

The settlement will allow D1 athletes dating back to 2016 to receive a portion of that $2.7 billion in exchange for agreeing not to sue the NCAA for future antitrust violations.

But there is another huge part of this settlement. Starting in 2025, schools will be able to share up to about $20 million in revenue with athletes annually. For the first time, players will be able to receive payments directly from schools and receive the income they ultimately helped them earn.

As for how schools decide to divide revenue among athletes, that will be their decision. The settlement does not contain any guidelines or requirements regarding the distribution of income. While this freedom may be beneficial for some programs, it raises several questions.

First of all, how does Title IX impact this? Will this money have to be split equally between male and female athletes? Football and men’s basketball are the only truly profitable sports that exist at the college level. Everything else usually results in losses.

So now that players can receive the income they helped earn, will they be forced to give up some of it to comply with Title IX regulations? We don’t know and we will probably have problems because of it in the near future.

Despite revenue sharing, NIL isn’t going anywhere. In fact, the revenue sharing model will be classified as operating through NIL. Players will still be eligible to obtain sponsorship deals through other various NIL opportunities, and such deals will almost certainly be used by schools to circumvent the $20 million salary cap.

Collective funding does not count toward that $20 million, so programs with large NIL operations that have tens of millions more to allocate will still have an advantage when it comes to recruiting talent. And that’s why if you’re a Mississippi State fan and support the Bulldog Initiative, it’s still important.

The settlement will introduce new roster limits for each sport and will require every player on the roster to now be on scholarship. It’s basically the end of walk-ons in college sports. For some sports, such as baseball, the number of scholarships may increase. And schools like MSU that invest heavily in baseball will suddenly be able to offer more than the absurdly low scholarships of 11.7 per team.

However, in football, squad size will almost certainly decrease. These will not fall below the current stipend limit of 85, but it is unlikely that many spaces previously reserved for walkers will not exist. This is a serious change in the structure of the squad.

The NCAA’s decision to settle is simple. Only in this way can they remain a reasonably viable organization with any power. They will still be able to enforce the few laws they have that have not been deemed illegal by Congress.

While this move preserves the life of the NCAA around college athletics, it only helps them in the short term. As long as the NCAA continues to argue that college athletes are not employees and therefore cannot bargain collectively, the NCAA will remain at risk of being sued for antitrust violations in the future due to its limited salary cap.

An eventual split of major college programs from the NCAA so that players can become employees and those programs can effectively form their own minor league league still seems inevitable. This agreement may have only slightly delayed the move.