Revenue sharing in college athletics is coming, but only collective bargaining will provide a true solution

cfp logo football

In 2011, 300 college football and basketball players from Arizona, Kentucky, Purdue and UCLA petitioned the NCAA demanding a cut of television revenue. They were told such a move is not “fiscally possible.” What followed was an early effort toward cost of attendance which involved increasing scholarships by $2,000.

That all seems laughable by today’s standards.

Nowadays, the players — along with their representatives, boosters and agents — are dictating terms. There are unionization efforts at Dartmouth and a de facto players association at UAB. The current structure still can’t wrap its collective mind around an employee-employer relationship in college athletics governed by collective bargaining. It’s coming, though. It’s necessary. 

large-scale revenue-sharing model is in the developing stages, which essentially reveals the endgame in all of this. With players and reps now dictating terms, this seems to be the only way the current a resolution is met. 

But while revenue sharing represents forward thinking that’s needed in today’s climate, it only puts a thumb in the dike. 

The whole intent at this point is to stop the spigot of antitrust lawsuits. There are a handful that could be particularly impactful, but House v. NCAA is the most prominent at the moment with a trial date scheduled for January 2025. It must be dealt with first. 

But that seems only a stop-gap measure. Revenue sharing might influence settlements in other cases, but that’s not assured. Most importantly, it doesn’t stop anyone, anywhere on the players’ end to file another suit. 

Big picture, there is only one way all of this ends: collectively bargaining with a players’ association. That shields the NCAA and schools from further litigation because the parties agree on working conditions, health and welfare, salary, etc. 

While a seemingly uncomfortable arrangement, the two sides would be partners. 

Sportico’s Michael McCann wrote recently that any “revenue sharing plan not borne through collective bargain would be at risk to antitrust legislation, since it would set a cap on how much athletes can get.” 

There are few absolutes in these types of situations. One is establishing the players as employees and the schools as employers. We’re already living in such a world where athletes earn millions in uncapped income. Athletic directors might be miserable, but the game has never been healthier with record TV ratings and rising attendance.

And for the hand-wringing about lack of parity, Liberty would have earned a College Football Playoff berth had the expanded field been in place last season. 

Revenue sharing is a step forward, but it’s not a solution. The soft deadline is the beginning of the House trial nine months from now. If it loses, the NCAA would be on the hook for $4.2 billion in damages. Settlement wouldn’t be closure, but it would be something

There is still a long way to go. The two sides could settle on the courthouse steps just prior to trial. Even if the NCAA is subject to a massive appeals process, it would just be further delaying the inevitable. Such a settlement would protect the defendants legally for the next 8-10 years, but that’s preposterous without collective bargaining. 

“Even if you gather up all the plaintiffs and all the lawyers in the settlements, it doesn’t prevent a case that hasn’t yet been filed to be filed in the future,” one veteran attorney familiar with NCAA legal matters told CBS Sports. 

Not unless there are two distinct sides negotiating with each other. The NFL has bargained a “personal conduct” clause into its collective bargaining agreement with the players for “conduct that is detrimental to and public confidence in” the NFL. That’s tougher than in the college space where coaches — with an obvious conflict of interest — can discipline players on their own. Or not, which sometimes is scarier. 

There’s more conjecture than conclusions with all sides darting for their corners of self interest. At the annual bowl meetings in El Paso, Texas, a proposal was made to carve off a portion of conference bowl revenue and pay it to players as an incentive/appearance fee to prevent opt outs. 

Never mind conferences will probably not agree with a reduction of their bowl revenue, but any such arrangement hints at an employment contract. We’re not there yet. 

“It’s getting kind of silly,” said sports attorney Mit Winter. “If you have direct payments from schools, everyone knows they’re being paid to play their sport even if they call it NIL. It’s just an employment contract.” 

Professional athletes aren’t compelled to play in postseason games. Why would you want an employer with an influence over whether you’re really injured? The is a legal term called a “specific performance” clause. 

“You can’t force anyone to play,” Winter said. 

The only solution seems to be the professional model. But is the system ready for such an arrangement? Doesn’t matter. Something has to be done, or there will continue to be a hamster wheel of lawsuits. 

“It’s settling lawsuits and trying to buy some time with other lawsuits,” Winter said. “This ushers in revenue sharing, but it doesn’t solve the other legal issues.”

Here’s a further breakdown of where we stand in what has been labeled the “Modern Model.”

Revenue sharing in and of itself doesn’t end NIL and collectives. Players would still be able eligible for compensation, but any attempt to cap that income would be met with another antitrust suit. Think of players getting, perhaps, $30,000 per year in revenue sharing but having side gigs with NIL benefits. Collectives would still have their tentacles in the process. 

The NCAA would be on the hook for $2.7 billion over 10 years in their end of the settlement, according to ESPN. Unless the NCAA has insurance for such a hit, members should expect a reduction in annual payout from the NCAA Tournament — which funds everything for the association. 

That NCAA settlement is separate from what the Power Four would set aside for revenue sharing. How would they pay for it? That’s easy, or at least understandable. We told you about it in March. In the settlement, Power Four schools will be on the hook for an average of $15 million to $20 million each. That’s just to settle House and hopefully influence settlements in other landmark cases. How to pay for the hit is less important than what it achieves: some sort of cost and labor certainty.

With some sort of rudimentary collective bargaining, the schools could “trade” that compensation for, say, two years in residence from players. That would begin to solve the huge issue of unrestricted player movement via the transfer portal. That only happens if there is a players’ association with which to bargain. 

Some current influencers who would fit the bill as a figurehead representing players:

  • Jim Cavale: The founder made headlines last week by signing up the entire UAB team. A non-profit that empowers players, could someday become a players association or union for college athletes.
  • Ramogi Huma: Head of the National College Players Association advocacy group, the former UCLA player has been an effective activist for players’ rights. 
  • Jason Stahl: Founder of the College Football Players Association, Stahl embarked on a path to organize Penn State football that ultimately failed two years ago.
  • Jason Belzer: The founder and CEO of Student Athlete NIL, which is another candidate to serve as a players’ association.

“You’re going to need somebody who can organize the athletes,” Belzer told CBS Sports. “Either the athletes get organized … or somebody organizes enough of them or has them under contract that starts making rules and makes demands.” 

But how do you organize a group whose membership changes significantly every year? College athletes are “pass throughs.” In other words, they are transitory and temporary. 

Some level of revenue sharing is already in place. Belzer estimates that 95% of NIL is pay-for-play by a different name. The state of Missouri has basically set up that structure allowing schools to help directly with NIL deals

The point of such a settlement is that it would be “global,” meaning that several suits could be bundled together for settlement. Among them:

  • House v. NCAA: The most urgent and significant in regard to the existing collegiate model. It seeks backpay for athletes in NIL benefits as well as shares of broadcast and video game revenue.
  • Fontenot v. NCAA: It alleges, based on broadcast rights alone, that colleges can certainly afford to pay players. Example: Texas A&M had enough money to pay Jimbo Fisher’s $76 million buyout.
  • Hubbard v. NCAA: This seeks backpay for the Alston v NCAA verdict. That landmark 2021 decision saw the Supreme Court vote 9-0 to allow limited educational benefits that the NCAA had fought.
  • Carter v. NCAA: Like Hubbard, it argues that athletes should be paid more than the NCAA basics — room, board, tuition, books and cost of attendance. This case was filed in December 2023 and could take years to litigate without resolution. 

Still, would bundling those cases shut off that spigot?

It remains unclear whether any/all of this would be subject to Title IX, the 52-year-old federal law that prevents discrimination based on gender in education in schools that receive federal assistance. This paper concludes that Title IX requirements would not kick in if schools shared market-based monies with basketball and football players.

To be determined: which players exactly would share in revenue. Does it apply to only apply to football and men’s basketball?

In this new era, look for expanded scholarship numbers and scholarship money allocation. Think of the so-called “equivalency” sports such as baseball, soccer and volleyball. Those sports split scholarships. Example: Baseball divides 11.7 scholarships among its roster. 

In the new climate, schools could fully fund those sports. The concept would be “permissive,” meaning optional, but at its core would be another separator between the haves and the have nots. It would also count as part of the revenue sharing settlement. 

There is still hope that Congress steps in to lend at least limited immunity for the NCAA to conduct some sort of business and adhere to its rules. Talking to sources, don’t expect anything on that front until at least next year. It’s an election year where Congress’ attention is occupied with the obvious: getting themselves reelected. 

Consider what might happen should a new administration take over. In general, Democrats are labor-friendly, while Republicans are just the opposite. However, a stacked conservative Supreme Court delivered the Alston decision, a significant labor-friendly move that landed us in the current climate. Alston opened the door for NIL.

“For Chrissakes, we are [still] going to the government?” asked Joe Moglia, a former TD Ameritrade CEO who on went to coach Coastal Carolina. “There is no private enterprise in the world that would say, ‘Let’s go to the government for a bailout.'”

Source link

About The Author

Scroll to Top