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House Settlement Approved

On June 6th Judge Claudia Wilken approved the amended version of the House vs. NCAA settlement. This landmark settlement averts a potentially catastrophic loss if the class action suit had made it to trial. It is a major victory for athletes, who will now benefit from revenue sharing.

Approximately $2.75 billion of the settlement will go to compensate athletes who were restricted from earning NIL income between 2016 and 2021. The NCAA and the Power Five conferences (ACC, Big Ten, Big 12, Pac-12 and SEC) will be responsible for a significant portion of that payout. The NCAA will pay approximately 60% ($1.65 billion) of the settlement. It is planning to reduce revenue distributions to all D1 institutions over the next 10 years to fund the payments. The payments will be made annually, starting no later than 45 days after the final court order.

For D1 schools outside the Power Five, this will strain AD budgets and could potentially create an even bigger gap between the haves and havenots. Also this is not a big payday for everyone, even at the Power Five. The marketplace for top talent had done nothing but go up, and pumping in an extra $20 million in revenue sharing is not going to drive costs to compete down anytime soon.

All D1 schools had the option to opt in or out of the settlement. Many schools are weighing their options to drop down to a lower division, or where to cut to balance the budget. Over the last three years the majority of NIL deals were funded by corporations, collectives and boosters, who are all still there and ready to write checks to players. It’s difficult to believe that the boosters will turn their attention to less marque sports now that the schools can pay for top talent. My guess is you will see “blended” deals, adminstered by collectives and cleared through the clearinghouse that spreads out the cost of paying for five star recruits and transfers.

In the end, if you are a college athlete in a program outside the Power Five, not much has changed, other than your school might have a harder time funding your sport, and your roster spot just became much more valuable.

The College Sports Commission

Almost immediately after the House settlement was approved, Bryan Seeley, a former MLB executive, was named CEO of the College Sports Commission. He will lead the newly formed organization responsible for the enforcement of new rules pertaining to NIL deals, third-party payments, and revenue sharing.

The Commission will be managed by the Power Five conferences, not the NCAA. We can assume the infrastructure for how they will monitor deals, as well as what the potential ramifications for breaking the rules will come out very soon, as the new policy goes into effect in less than a month.

There are plenty of questions about whether the Power Five will be able to “police themselves”, along with the rest of D1 athletes. Also, there will be a need for clarity for who they will have authority over. D1 programs have a choice to opt in or out of the settlement, so does the Commission still have the power to monitor those schools? Plus the large majority of athletic programs are in D2 and lower and unaffected by the House settlement, so there are a lot of unknowns. If you want to know more, click on the link below.

High School Athletes: More Income, Fewer Roster Spots

The House settlement drastically reduced the number of roster spots due to the elimination of spots for non-scholarship walk-on athletes. From now on, a roster spot = financial support. This may mean coaches will recruit fewer freshmen, preferring to spend their revenue-sharing dollars on experienced transfers. Here’s some important things to consider:

• Revenue-Sharing is not the same as third-party NIL deals, so if you are being recruited by a school that opted in, make sure you ask where you financial support is coming from.

• Schools still must comply with Title IX. This may create a benefit for female athletes in Olympic or non-revenue sports, who may see increased resources, staff or revenue-sharing payments.

• The Transfer Portal is now your competitor. You are not competing against other recruits for roster spots. You will need to show you can contribute right away. It may be difficult to show you can compete with an experienced D1 transfer, so think realistically and consider different levels like D2 or D3.

• Along those lines, opportunities outside D1 may improve. You may want to consider D2, D3, NAIA or JUCO schools that can offer a development pathway to D1, thanks to the freedom available through the transfer portal.

Four Steps to Take Now to Land a D1 Roster Spot

A Final Note