Athletic departments face a new reality after antitrust settlement

According to AP’s John Zenor, the revenue-sharing model outlined in the recent college sports antitrust settlement means “budget disputes and a myriad of potentially difficult decisions are coming” for athletic departments across the country. The model would allow schools to give athletes up to $21 million a year, or “up to 22% of average annual revenues for power league schools.” Football and basketball leaders will “continue to reap huge annual revenues,” but they will now be “allocated differently; “where and how will be determined in the coming months.” Ole Miss AD Keith Carter said some of the money “will go to NIL’s donor-supported collectives “in theory will be reallocated to the athletic department to increase revenue.” He also indicated that schools must “find ways to reduce costs”, for example by pausing infrastructure projects. Some schools have “already proactively made changes.” Iowa ADMINISTRATOR Jamie Pollard has “abandoned plans” for a new wrestling facility that was “scheduled to open in the fall of 2025.” “He cited the ‘$20 million question’ of how to account for direct compensation for athletes.” Meanwhile, Texas A&M AD Trev Alberts has “already laid off over a dozen employees.” Time will tell the impact on programs with “more modest budgets” (AP, 5/29).

HOW DOES THIS WORK WITH TITLE IX? In New York, Billy Witz noted that the growing popularity of women’s basketball “has put women on equal footing with men in college athletics,” although the proposed settlement “could halt that progress.” There are two main elements of the settlement that have not been fully disclosed, and both elements may “invite a Title IX investigation.” In addition to allowing schools to set aside about $20 million a year for player payouts, the schools will “essentially allow payment for name, image and likeness rights for 2016.” Administrators at two major conference universities wondered whether Judge Claudia Wilken “could throw out the settlement over concerns that it violates Title IX” (NY TIMES, May 29). Dinich & Thamel of ESPN.com noted that one of the “central questions surrounding the law” is whether equal treatment will require schools to “pay male and female athletes the same” (ESPN.com, May 29).

THERE ARE MANY MORE QUESTIONS: Jeff Neiburg reports that in Philadelphia, college administrators have “more questions than answers about what exactly this all looks like and what consequences the settlement will have in the near and distant future.” Villanova AD Mark Jackson: “We have a really busy summer ahead of us figuring it all out.” Neiburg noted that planning around the settlement is “ongoing and will continue in the future.” Saint’s lawyer Józefa, Jill Bodensteiner, “estimated that it could take until midway through the 2024–2025 academic year to fully understand what the future will look like” (PHILADELPHIA INQUIRER, 5/30). VOX’s Bryan Walsh wrote that there are more unknowns than known about how the situation will unfold. “It is unclear which athletes will be paid or how much,” though observers are also unaware “whether there will be a move toward paying female athletes on par with male athletes.” There is also a “broader question of what it will mean to introduce market logic into the world of college athletics.” Alabama allocates more than $80 million to its football team each year, which is “more than double” the state budget of Mississippi. If Alabama and its “legions of wealthy people can now pay players directly, an already uneven playing field will improve vertically.” In addition to “further upsetting the competitive balance” in money-generating sports, the deal could “ultimately harm athletes in non-revenue-generating sports.” It’s not hard to imagine a future” in which colleges decide to “forgo sports in a more market-oriented environment” (VOX.com, May 29).

RELATED: Fontenot case remains a continuing twist in the House settlement saga

CUTTING SPORTS MAY BE IN GAMES: At Alabama, Michael Casagrande noted that SEC Commissioner Greg Sankey “suggested ‘difficult decisions’ schools will face to ‘include new spending on ongoing expenses and account for lost revenue to compensate previous athletes.’ Casagrande asked, “Does this mean cutting high-cost, low-revenue sports from faculty rosters?” Alabama AD Greg Byrne said: “Obviously you don’t want to do that. … that would be the last thing we want to do.” Byrne said the Olympic sports model is “one of the coolest things about our country.” Byrne: “But it’s also very, very expensive” (AL.com, 5/29). Texas A&M’s Alberts was asked “if he could assure A&M athletes that the university will not cut any sports.” He replied, “I don’t know if anyone would be wise to announce this today.” However, he described “the option of stopping sports as a ‘last resort'” (Houston Chronicle, May 29).

CHANGE IN FINANCIAL CONDITION: Alberts said of college sports administrators: “We’re not very good at running businesses. Let’s be honest and I’m raising my hand as someone who is part of this. We just always had enough growing revenues to overcome the stupid expenses. … We don’t have a revenue problem in college athletics, we have a spending problem. He added: “The core business of college athletics has been changed forever. I don’t think it’s necessarily a bad thing, it’s just going to be different. Our ability to adjust and adapt will be key, and the truth is that historically we haven’t been very good at it, so now we will be able to change our current behavior.Houston Chronicle, May 29).

A CHANCE TO CREATE A NEW MODEL: Michael Rosenberg of SI.com wrote that college sports are currently “broken” and the new model “could be better than anything that came before.” But it requires “bold leadership, ingenuity and a skill that university administrators have not often demonstrated over the last 20 years: teamwork.” The House settlement “will lead to something schools swore they would never do: paying college athletes directly for their work.” College sports “are no longer “like,” “substantially,” or “essentially” professional sports. These are professional sports. So what should it be as a professional sport?” This question “should dominate every meeting, every strategy and every action” (SI.com, 5/29).