Big Ten schools indicate that payment to a prospective athlete is subject to Title IX regulations

Very publicized House v. NCAA the antitrust lawsuit stands on the cusp of being the most influential moment in the history of college athletics. The proposed settlement in the case, still awaiting court approval, would give up primary ownership of the NCAA’s “amateur athletics” model and allow schools to pay student-athletes salaries directly — non-mandatory payments would be distributed as NIL payments through the income-sharing system.

Reports on the proposed settlement identified two key features: a retroactive feature to compensate recent college athletes for approximately $2.7 billion in NIL back wages, and a forward-looking feature to establish a revenue-sharing model for athletes from universities. Approval of this settlement is still uncertain. Judge Wilkin, who is presiding over the case, has not yet approved the settlement; some antitrust issues cast a shadow over the legality of the proposed future revenue distribution model.

Pay-for-play, a once taboo concept, is nothing new. Over the past three years, the trend towards setting players’ collective wages at the NIL level is the most overt form of sports compensation from boosters ever seen, but previous practices of under-the-table payments, donated cars and work in case of no-show have existed in the past. NCAA forever. If the NIL era has clarified anything, it is that student-athlete compensation is essential to athletic success.

Now that the NCAA has raised the proverbial white flag to maintain its concept of amateurism, NCAA member institutions are quickly looking for answers on how to implement their own pay-to-play system, this time using money from their own ledger to attract athletes. Big Ten schools were the first to come forward and indicate that Title IX will play a large role in how revenue-sharing systems are implemented. According to statements by management at the University of Illinois and Ohio State University, athlete compensation will be carefully adjusted to be consistent with Title IX standards.

Ohio State’s new athletic director, Ross Bjork, explained the university’s position in an interview with The Columbus Dispatch: “We are committed to Title IX…we have to be. It’s the right thing. But it’s also federal law. Bjork further indicated that Ohio’s legal interpretation and Title IX guidelines led her to conclude that any direct athletic compensation would have to be proportional to the demographics of Ohio State’s enrollees. For Ohio State, that would mean about 52% of direct athlete payments would go to female athletes – $11.4 million of the projected $22 million Big Ten institutions would be able to pay their athletes under the reported terms of the settlement.

Yesterday at the University of Illinois, athletic director Josh Whitman shared Ohio State’s views on Title IX compliance (if House approval of the settlement) during the annual media roundtable. Both athletic directors indicated that approximately eleven million dollars awarded to male athletes would be allocated to men’s basketball and football. These are the only two sports that are consistently profitable in schools across the country, generating huge revenues from ticket sales, merchandise and, most importantly, lucrative media rights deals.

Mit Winter, a college sports attorney at Kennyhertz Perry LLC., believes the Big Ten institutions’ latest interpretations represent a conservative approach to Title IX: “One of the three parts of the Title IX analysis for college athletics programs is whether financial aid ( i.e., athletic scholarship dollars) provided by a school to varsity athletes are awarded proportionally based on male and female student population… Ohio State and other Big Ten schools assume that NIL compensation paid to athletes falls into the same “financial aid” category as dollars for an athletic scholarship.”

Direct payments to athletes are a new concept that has not yet been resolved under Title IX. Winter believes that categorizing this type of payment falls into a legal gray area: “NIL compensation is an arm’s length payment made in exchange for a service. So these payments are nothing like an athletic scholarship… by treating NIL payments as if they were in the “financial aid” category, Ohio State and other schools taking the same approach are being cautious and likely trying to avoid claims of violating Title IX under method of making NIL payments.”

Although it is believed that there are more risky but less conservative approaches. Winter speculates that the NCAA could “take the position that NIL payments do not constitute ‘financial aid’ under Title IX and that they do not have to be paid in proportion to a school’s student body.” The school could take the position that NIL payments are payments in exchange for services and that those payments should be made based on the fair market value of those services or the use of the NIL of athletes providing those services.

Given that two of the nation’s top athletic departments are taking a clear and cautious approach to applying Title IX to athletic payments, it will be interesting to see if other schools broadly adopt what appears to be the Big Ten’s current stance. Title IX interpretation challenges could provide schools with enormous recruiting benefits for football and men’s basketball under a revenue-sharing system.

NIL collectives have shown that, left in the hands of the free market, the vast majority of playing salaries go to male athletes. It has been reported that approximately 95% of collective NIL dollars (money allocated primarily to athletic performance rather than sponsorship deals) go to men. Without the application of Title IX to institutional sports payments, any semblance of gender equality is unlikely to materialize.

Given the looming legal uncertainty, the best course of action would be for the Office of Civil Rights (OCR), the subagency of the Department of Education that enforces Title IX, to produce a memo clarifying its position on the issue. Since NIL’s inception, activists have gathered and petitioned OCR to challenge the previously mentioned differential payments by NIL collectives; these activists have been met with nothing but silence from the government – a bad sign for resolving the uncertainty and an indication that restructuring college sports will not be simple.