NCAA Settlement Updates: A Breakdown for College Consultants
This week, settlement agreements were finally filed in court regarding the House vs. NCAA case. In an effort to help our IEC community better understand the impact of this filing, we have provided a quick bullet-point breakdown of the key findings and what these changes mean for our IEC community.
Core Components of the Filing
Financial Compensation
- The settlement calls for back damages to be paid to former NCAA athletes, amounting to roughly $2.8 billion, paid over 10 years.
- Among other funding sources, the Power 5 conferences (Pac12, Big12, Big10, SEC, ACC) will have the ability to increase their scholarship caps for athletics and claim a percentage of that increase as “athlete benefits” in the new revenue share model.
- G5, FCS, and Non-Football DI programs have the option to opt-in to this new scholarship model as well, but are not required to do so as it would require them to participate in the athletic compensation portion as well.
NIL (Name, Image, and Likeness) Rights
- Under the new model, schools will be able to pay student-athletes directly for their NIL rights. This particular piece of legislation is expected to be a continued point of contention.
- This new model introduces a new oversight (or clearinghouse) for NIL activities in college, thus giving the NCAA newfound oversight into any NIL deal over the value of $600. The NCAA claims this is for the benefit of the athletes, but critics believe this is the NCAA’s second attempt at regaining control over student-athlete autonomy in the marketplace.
Scholarship and Roster Limits
- For schools that choose to opt-in to the new model, scholarship limits will be eliminated and roster limits will be established.
- For these schools, headcount sports (“all or nothing” scholarships) will be eliminated, and all sports will become equivalency sports (partial scholarship structures).
Key Takeaways for IECs
Applicability and Budget Considerations
- These new rules apply only to Division I institutions that opt-in to the new model. We suspect the majority of the Power 5 conference schools will opt-in, but most other schools in Division I are likely to opt-out of the program due to budget constraints. Therefore, this ruling will most likely only affect the top percent of athletes in the NCAA.
- There is no requirement for a school to fund all scholarships in the new model. Title IX is expected to be enforced in this new model, so schools will have to allocate the budget equally among male and female sports.
Potential Impact on Sports Programs
- For schools that do opt-in to this new model, there is a concern of Olympic or “non-revenue” sports being culled for the sake of the revenue sport budget. This is not a guarantee, nor is there any way to anticipate which schools might cut certain sports at this time.
Future Developments
- This is not a finalized decision, merely a settlement filing. We are still months away from this recommendation finalizing, and there may be amendments made during that time.
- The settlement does not address the state laws currently in place that may or may not contradict these rulings. Therefore, the NCAA’s next probable approach will be to create federal legislation that supersedes state laws regarding NIL and athletic scholarship allocation.
- The settlement does not make any adjustments or mentions of the ongoing employment status of student-athletes.
Understanding these updates is crucial for counselors and college consultants working with student-athletes and their families. Staying informed will help you navigate the evolving landscape of college athletics and ensure that your students make the best decisions for their academic and athletic futures.
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