NCAA SETTLEMENT UPDATES: A Breakdown for Counselors
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, the Student-Athlete Advisors 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:
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.
Under the new model listed above, schools will also be able to pay student-athletes directly for their NIL (Name, Image, and Likeness) rights. We expect this particular piece of legislation 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. This has been claimed by the NCAA to be 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.
For schools who choose to opt-in to the new model, scholarship limits will be eliminated and roster limits will be established.
For schools who choose to opt-in to the new model, headcount sports (“all or nothing” scholarships) will be eliminated, and all sports will become equivalency sports (partial scholarship structures).
KEY TAKEAWAYS FOR IECs:
These new rules apply ONLY to Divison I institutions who OPT-IN to the new model. We suspect the majority of the Power 5 conference schools will opt-in, but we suspect almost all other schools in Division I 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 no requirement for a school to fund ALL scholarships in the new model, and Title IX is expected to be enforced in this new model so schools are going to have to allocate budget equally among male and female sports.
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.
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.
This 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.
Please refer to the articles below for more detailed information regarding the settlement:
If you would like to listen to additional commentary on these changes, please refer to the podcast episodes below:
Pre-Filing Commentary on Settlement Impact - The Athletes to Athletes Podcast
“The good, the bad, and the ugly of NCAA’s new Roster Limits” - The Athletes to Athletes Podcast
