There may be a silver lining in an unlikely cloud hanging over the darkened world of collegiate athletics, one that could provide much-needed guardrails on athlete compensation and the transfer portal.

Florida State athletics director Michael Alford dropped the news bomb during the recent Town Hall meeting when he said the House-NCAA settlement, which requires athletic departments to share upwards of $20.5 million of revenue with its athletes as a result of the NCAA vs House Settlement, “is really going to clean up where we've been in this wild west atmosphere we've had the last few years, and I think for the betterment of the student-athlete as well.”

Interesting. How can sharing $20.5 million of revenue with the athletes be a good thing for an athletic department?

“A lot of (the House Settlement) is changing the face of collegiate athletics… for the better,” Alford noted. “It's going to take away the so-called pay-for-play. It's going to put everyone on an equal playing field where you can participate at that cap level that you want to participate.”

Alford’s statement came on the same day that Yahoo Sports’ Ross Dellenger broke a story discussing the topic, a story we will draw liberally from while tying in how this will affect Florida State Athletics.

Dellenger wrote: “In a way, college athletics this week enters the next phase of its evolution into a more professionalized entity: signing athletes not to national letters of intent but to name, image and likeness agreements that guarantee compensation directly from school to player. The agreements, such as the seven-page NIL contracts from Arizona to its prospects, are contingent on the House settlement’s final approval in April (April 7) and its full implementation at the start of the 2025-26 academic year on July 1.”

That contingency is worth repeating, everything discussed in this article and that athletics is now having to plan for is dependent on US District Court Judge Claudia Wilken’s approval of the settlement on April 7.

Alford’s enthusiastic statements admittedly are “way down the road” on where college athletics is heading, and he acknowledges the road will be messy for a while longer, especially before July 1 when the settlement takes effect.

In spite of the caveats and the uncertainty ahead, Dellenger wrote, “These contracts are historic in nature. They kick off what is expected to be a messy transition period that will dramatically change how athletes are paid: from boosters and booster collective groups to the schools themselves.”

Dellenger describes what will be a messy road in year one. “Athletes are expected to sign agreements with both the NIL collectives and the schools rev-share agreement under a promise of compensation as part of a settlement that has not even been formally approved. Many coaches are building rosters without knowing their revenue-share amounts and, in some cases, their scholarship allotment and roster spots.

The collectives are planning to “frontload” deals with athletes, paying them more between now and July to create more dollars for their affiliated schools in year one.

Dellenger reports, “As the signing period arrives, school administrators and collective officials are scrambling to strike booster deals and pay their athletes before such deals are subject to the clearinghouse. All booster deals that pay athletes after the revenue share begins — July 1, 2025 — are expected to be subject to the clearinghouse.

This has led to school collective officials designing contracts for incoming freshmen and transfers that pay all or a large portion of compensation to them in the first few months of the deal, before July 1 — a concept described as “frontloading,” several school and collective officials tell Yahoo Sports.

“It’s the one year you can manipulate the cap,” acknowledged Alford to Dellenger.

Scott Stricklin, the athletic director at Florida, thinks of it like this: “You’re announcing Martial Law is going into effect on this date (July 1),” he said. “You’re telling people that if you’re going to loot, do it before then.”

The more early enrollees that a program signs, the more cap space can be created by frontloading.

“And lingering over this all are unanswered questions about the new enforcement entity and clearinghouse charged with policing booster compensation that athletes now receive,” Dellenger reports. “It has all made for an interesting time in an industry that is in the midst of its greatest transformation.”

“Even though there’s a lot of work being done, as of now, it’s clear as mud,” Ohio State athletic director Ross Bjork said to Yahoo. “We are building the plane as we fly it. We’re almost ready to land it and we’re still building it.”

But in spite of the turbulence, the good news is the plane is flying toward a destination and that’s on step in the right direction.

Seminole Booster President Stephen Ponder, who moderated the Town Hall with Alford, speaks for many Booster members when he asked Alford this question: “A lot of people I talk to, they talk about the way (we) grew up in college athletics. It's changed, and the world's changing every day, but this new House settlement, I think will kind of settle it back out a little bit to a new normal that I think people can be like, OK, at least there's a cap. So would you explain that a little bit for everybody?”

“You got about two hours?” Alford said with a laugh. “I do agree with Stephen, and we're going to talk at a very high level on the House Settlement but we've been very involved, and have been following this for numerous years, and preparing ourselves … meeting with the Cowboys about how they do their cap and contracts and some of the language within those agreements.”

As noted in Dellenger’s story, the negotiated media contracts (NIL) would be signed by a prospective player along with their grant in aid from the university and could include language regarding compensation, number of years, and even address a buyout should the player choose to transfer to another university.

“There's also going to be a form of payment to athletes based on their media value, and that's going to be a negotiation that we're going to be having with our student athletes coming in,” Alford noted. “You're going to sign them on a one- or two-, or three-year agreement.”

Contracts are not mandatory, but most schools are expected to use them. “I only deal with the ACC, but we have a template that we're all going to be utilizing now,” Alford said, noting there will be some difference due to Florida law and other things, but we're going to start that this December. “Moving forward, this basically takes your NIL in house, into that cap, and everybody is subject to the cap.”

Dellenger wrote what the ACC and FSU are doing is typical across the country and noted “many administrators are viewing this basketball and Olympic sport signing period as a trial run before next month’s early signing period for football. While the Power 4 leagues have socialized draft templates of NIL contracts for athletes, the schools are not required to use them. And the drafts are lengthy — one is 27 pages.

“Some universities are relying upon their collectives to sign players to short-term deals that either expire at the onset of school revenue sharing (scheduled to be July 1) or include a clause that assigns the contract to the school once revenue sharing is permitted,” Dellenger wrote about year one. “Others, like Arizona, are operating with NIL contracts featuring the aforementioned contingency clauses. Those contracts guarantee to athletes dollar amounts, most of it tethered to their eligibility on the roster.”

Dellenger quoted a half-joking Alford that schools are offering athletes “IOUs.”

“This signing period, most schools are laying out a revenue sharing number in a kind of TBD way,” Russ White, the president of The Collective Association, told Dellenger. “They are giving an overall number between the school and collective.”

Importantly, the House Settlement stipulates that the NCAA won’t be the enforcement arm. Instead, the NCAA and Power 4 conferences are targeting Deloitte, the world’s largest professional service network, to be the third-party clearinghouse.

“If the deal is finalized, the Deloitte-run clearinghouse is expected to police certain non-school compensation to athletes, especially those from boosters or groups of boosters,” Dellenger reports. “The clearinghouse presumably will use an algorithm or formula for calculating fair market value, though much of this remains unclear. Those deals not deemed as fair market value will be rejected. The athlete must end the deal or risk ineligibility, but he or she can appeal to a court-overseen arbitration process, according to settlement terms.”

According to Alford, the clearinghouse will also oversee the distribution of the $20.5 million annual revenue distribution to players. If the school were to exceed its cap or pay a player more than the value deemed appropriate both that particular player, both the player and the school would face consequences, which could include loss of eligibility and reduction in the school’s $20.5 million cap which could have far reaching impact on other sports.

“We're setting up a very strict enforcement agency,” Alford said. “If you go over your cap, there will be penalties.”

According to Alford, each athletic department will be required to provide a detailed accounting of how it allocates its revenue sharing between sports and to athletes as well as submit every agreement over $600 to verify the agreement is at market rate for that athlete. Deloitte will have authority to audit the revenue sharing and NIL of every athletic department.

While this year’s players will sign in December, the House Settlement won’t go into effect until July 1, 2025, Judge Claudia Wilken approves the final settlement agreement on April 7, 2025.

In the meantime, Alford said FSU is studying the revenue sharing models with the business office and modeling how “we're going to manage our cap multi years.”

“So a lot of that is changing the face of collegiate athletics, and as Stephen pointed out, for the better,” Alford said. “It's going to take away the so called pay for play. It's going to put everyone on an equal playing field where you can participate at that cap level that you want to participate.”

Critics feel the House Settlement will attract future litigation, Dellenger reports. Jim Cavale, the founder of a college sports players association named Athletes.Org, told Dellenger, he believes (the House Settlement) method is not the right one because these “NIL rev-share contracts” are pay-for-play deals that schools and conferences created without input from athletes. He is a proponent of the NFL Players Association model, comprised of a player representative from each team, who were involved in structuring the NFL contracts.

These rev-share deals will “cause problems for everyone involved,” Cavale told Dellenger. “Because these are not employment contracts, the enforceability of certain terms — such as buyouts or payments related to playing time and performance — is murky.”

Steve Berman and Jeffrey Kessler, the two plaintiff attorneys who struck the settlement with the NCAA, have even expressed their doubts that the clearinghouse will pass the legal test to Yahoo Sports.

“I have no idea how they are going to do this,” Kessler told Yahoo earlier this fall. “Only thing they have (in the settlement) is that athletes must report deals to schools and the schools are going to send (to the clearinghouse) what their deals are. If they think a deal is not proper, they could try to impose penalties on the athletes, which would then be subject to arbitration. They have no ability to go to an NIL and say ‘You can’t do that.’ ”

Brian Davis, an attorney in California who represents more than 100 football players in the NIL space, plans to file a legal objection to the settlement over the issue.

“I don’t think there is any world where you can require a submission of an NIL contract to some third-party clearinghouse to determine fair market,” said Davis, who heads the Forward Counsel law firm. “I don’t see that ever surviving a challenge in the courts without collective bargaining.

“For years, college officials have pushed back against athlete employment. And yet, these new contracts and revenue-sharing concepts only makes the legal argument for employment stronger. All of this is creating a paper trail that will make employment a reality,” Cavale said.

And if he is correct, some player(s) will eventually test the House model in the courts and collegiate athletics will have to respond to whatever the court’s future ruling will be. As we have written over the years, this winding road may eventually lead to the NFL’s legally precedented model which would require collegiate athletics to declare the athletes as employees, form a players union and arbitrate the caps with the players, but at least with this House settlement model collegiate athletics will move further from the wild west and closer to the correct legal model.

As they say, it takes a lot of good ideas to get to the right idea and Alford thinks this model will be a big step forward.

“Everybody's going to be on a level playing field (and it) is going to come back to how you evaluate your talent, how you develop your talent moving forward, so it's something that's really exciting,” Alford said. “It's going to be great for the student-athletes moving forward, and it's going to be a great partnership that we have here with the House Settlement.”

Colleges will still use collectives to raise money for athlete appearances, but the collectives will act like marketing agencies, seeking sponsorship, advertising and endorsement opportunities for the school’s athletes. Alford said those NIL agreements over $600 “would need to run through the clearinghouse to make sure it's not a pay for play and is measured at fair market value.”

Florida State has operated with two collectives, Rising Spear and the Battles End. The two entities have recently merged into one, the Battles End, and will now be focused on becoming a marketing agency for the athletes who can negotiate true, market-value NIL opportunities for their student-athletes. While Battle’s End will continue to raise money to pay athletes for appearances, each of which must also be filed with the clearinghouse, their primary role will be to represent FSU’s athletes to corporations for national advertising opportunities.

Alford, who gained experience negotiating these deals for Dallas Cowboys players, used an NIL agreement for a sports drink for FSU defensive end Patrick Payton as an example. “That agreement will get measured, and (the clearinghouse) would come back and say the agreement (with Patrick) is worth this value, so therefore that value would be assigned, and Patrick would go out and perform that commercial on a national scale like he did, so we're going to operate much like the NFL, and I’m really excited about that.”

What the House settlement did was calculate an average of the ESPN and Fox media contracts among the Power 5 schools, which came out to be a cap of $20.5 million per school. It is important to note the settlement does not require each school to pay out the full $20.5 million cap. Of course, any school that hopes to compete at an elite level will seek funding for the full $20.5 million per year, which Alford said FSU intends to do. “We will be funding, paying our student-athletes $20.5 million and will follow the court case on how it should be distributed,” Alford said.

The distribution can come in many forms, including expanding scholarship opportunities for its sports team.

“$2.5 million of (the $20.5 million) can go into increasing scholarships,” Alford said.

Within the House Settlement is a provision that allows schools to increase the number of scholarship opportunities to the full roster of players and count up to $2.5 million of those scholarships towards the $20.5 million cap. Rather than 85 scholarships in football with 20 “walk-ons” with no scholarship aid, FSU has the option to now fund full scholarships for all 105 football players if it chooses. The same is true in basketball and other “equivalency sports” like baseball and softball. For example, the NCAA allowed a school to provide 11.7 scholarships for a baseball team with a roster of 34 players. Now, a school can fund up to 34 scholarships for its baseball roster if it chooses.

Alford said scholarships are an advantage for FSU, where the cost of attendance is approximately $26,000 per athlete, compared to a school like North Carolina, where the cost of attendance is $73,000. FSU can add three scholarship players for the cost of one at UNC or a UVA.

“We're going to be able to provide for more scholarships across the board to all of our sports because of the affordability of going to Florida State compared to the affordability of going to some of our peer institutions… especially in our so-called Olympic sports,” Alford said. “That's going to keep them debt-free when they graduate. Instead of being here on a partial scholarship (25-30 percent), we're going to be able to provide them with a full scholarship and that's something we're really excited about.”

If a school reports more than $2.5 million in new scholarships to the clearinghouse, only $2.5 million will count to the $20.5 million cap.

The school can allocate the remaining $18 million of revenue sharing to the sports they prioritize.

According to Dellenger, “The football-generating giants of FBS plan to disburse the vast majority of their revenue, as much as or more than 90%, to football and men’s basketball — the only two profit-turning sports at many universities. The model rewards the sports that generate the most revenue, but also aligns with the formula that attorneys in the House case are using to distribute back damages: 75-80% to football; 10-15% to men’s basketball; 5-15% to other sports.”

The heavy allocation of revenue to football and men’s basketball will not leave the athletes in other sports with as much as they received from collectives at some schools. Dellenger reports “some baseball teams, especially in the SEC, are at $1 million or more in annual NIL cash. Some women’s basketball teams are earning the same or more. Other Olympic sports teams at certain schools — volleyball, golf, gymnastics — are receiving hundreds of thousands of dollars from their collective.

If schools do distribute 90% of their dollars to football and men’s basketball, that leaves roughly $1-2 million for all other sports, Dellenger reports. And while additional women’s scholarships could help balance Title IX, many industry experts fear that the rev-share imbalance will lead to legal challenges.

Florida State was still working through how much they will allocate to each sport at the time of this writing.

Some college football teams, who have been earning more than what will be allowed under the revenue-sharing cap, will also be affected. Dellenger reports that Ohio State, Oregon, Miami, Texas and Tennessee have “numbers exceeding the high end of what might be allowable in rev-share, experts say.”

The forecast for the next 18-24 months is for cloudy skies with lightning showers in the Wild West. And while the House settlement may be imperfect, one likely challenged in the courts, the proposed settlement will provide collegiate athletics with much needed guardrails, temporary as they may be, on the switchback curves out of the Wild West.

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