18d ago football Edit

Power 4 schools exploring athlete revenue-sharing settlement

Bob Ferrante • TheOsceola

Editor

Like the Washington Generals on the court, NCAA lawyers have been winless in the courtroom.

And it doesn't look like there is a win in sight as House vs. the NCAA, the most-recent anti-trust lawsuit seeking revenue sharing for student-athletes, is steaming through the judicial system. Meanwhile, efforts to carve out an "amateur niche" for collegiate athletics has born no fruit on Capital Hill. As a result, college administrators from league offices and schools have been in negotiations for months in an attempt to reach agreement to settle the lawsuit, according to a report by Yahoo and by ESPN in the last few days. Yahoo’s Ross Dellenger described the negotiations as “heating up” but cautioned that it’s uncertain an agreement is imminent.

Yahoo, which is the parent company of Rivals, outlined the settlement in two aspects, from compensation to athletes for NIL within broadcasts, to future compensation for revenue sharing with athletes.

The settlement-related revenue model bears similarities with the proposal that NCAA president Charlie Baker floated to schools last December, which would permit schools who choose to compensate athletes directly for the use of their name, image and likeness (NIL).

The price tag across college athletics is massive, estimated at $1 billion to athletes from 2017-20 (a period before NIL legislation was approved in California, Florida and other states). While a large number of states have NIL legislation with varying language, Florida enacted its law in July 2021 and amended it to allow more communication between coaches and administrators with athletes in alignment with other states.

What will a new revenue-sharing model cost schools like FSU?

Yahoo’s reporting estimates the amount could be $15 million - $20 million per school, “with a spending limit similar to a professional sports team’s salary cap.” The amount paid would be the same for FSU or any other ACC, SEC, Big Ten or Big 12 school that participates. According to Yahoo, a school with an athletics budget of $150 million would share the same amount of revenue as Ohio State, which has an athletics budget of $250 million.

Obviously, reaching a consensus, let alone unanimous agreement, will be challenging as university presidents, chancellors, athletics directors debate the amounts and then seek approval. FSU and most schools would need approval of the Board of Trustees.

What remains uncertain is how schools outside of the Power 4 conferences would handle a settlement. Revenues at Group of 5 and FCS schools, as well as many Power 4 schools, are much less and often subsidized by university or student fees. Even within the Power 4, most athletic budgets are not sufficient to cover the cost of men's and women's sports and rely upon subsidies generated by fundraising organizations like Seminole Boosters. The athletic administrators at these schools will have to grapple with whether they can generate the additional $15 million to $20 million per year, attempt to compete with a lower compensation budget, or collectively formulate their own post-season championship.

Make no mistake about what is driving settlement discussions. It is a real fear of more losses in the court. "... the NCAA has lost virtually every antitrust case brought against it, most notably the Supreme Court’s 2021 decision (9-0) in the Alston case over educationally related benefits to athletes," Dellenger wrote, noting the settlement is expected to include other active cases such as the Hubbard and Carter lawsuits, which seeks back compensation stemming from the Alston Supreme Court decision, while Carter seeks to eliminate all NCAA rules prohibiting athlete compensation.

Should the NCAA and power leagues lose the lawsuit, the damages owed to athletes could triple from $1-2 billion to $4-6 billion.

ESPN.com reported that meetings have been "ongoing" and took place in Dallas last week as administrators gathered to discuss the College Football Playoff.