The House v. NCAA settlement was officially ratified on Friday, clearing the way for universities to directly pay student-athletes starting in 2025. The University of Denver announced months ago that as a non-power conference member, it will opt in and abide by the settlement terms, which take effect on July 1, 2025. What will this mean for DU, mid-majors, and the Power Four conference members (Big 10, Big 12, SEC, ACC)?
If recent interviews are any indication, the immediate impact on DU is limited. The athletic department recently posted for a new job opening for an Assistant Athletic Director, NIL Revenue. Said Athletic Director Josh Berlo on the DU settlement opt-in, “Over the coming years, this will empower the University of Denver to provide additional support and infrastructure centered around student-athlete success.”
It looks like it may be some time before ‘pay for play’ becomes a reality at DU based on a recent interview David Carle did with CHN’s Adam Wodon “We don’t have any organized collective or NIL. Although we’re opting in, our plan is not to [revenue] share this coming season.” (As an aside, Wodon and Carle touched on many other college hockey topics and we highly recommend reading the transcript or listening to the full podcast). However, he did not discount future revenue sharing and the potential of non-school revenue options for his student-athletes.
So, in the future, how will DU and other schools manage the new collegiate landscape?
Starting in 2025, the Power Four universities and other schools that opt into the settlement will be able to share revenue with student-athletes. Power Four athletic departments will be allowed to use their funds to pay players, with a cap expected to hover around $20 million annually per school. That figure is intended to compensate student-athletes across varsity sports – not just those that generate revenue.
Between revenue sharing, scholarships, and other athletic benefits, the NCAA believes that compensation to athletes could come close to 50% of some athletic revenue at many Power Four athletic departments. There are few guidelines in place for how the money should be distributed across sports and what the impact of Title IX will be. While most athletic department income around the country is generated by football and men’s basketball, there are likely to be court battles over how the money is split within athletic departments.
Individual schools have the discretion to allocate funds as they choose. For example, Kansas or UCLA could decide to spend 50% of their budget on men’s basketball. Denver may elect to spend money on hockey, lacrosse, and women’s gymnastics or some other combination of sports. Other non-football schools in conferences like the Big East and West Coast Conference could gain a major advantage when funding basketball or niche sports at their discretion.
While some athletes have filed lawsuits to become employees, the current settlement treats athletes like independent contractors. They will receive pay directly from the colleges with no payroll or income taxes withheld and, importantly, no legal mandate to provide health insurance (all of which are required to be provided to employees).
In the settlement’s wake, the Power Four conferences will begin to regulate and enforce player compensation guidelines. They plan to create a new organization called the College Sports Commission (CSC) and will hire a CEO soon after the settlement. Salary cap and player compensation will be supervised and audited by Deloitte. In DU’s case, there will be no formal commission, but they will likely look to the CSC for governance cues.
The NCAA, meanwhile, will continue to focus its enforcement efforts on traditional issues heading forward, including player eligibility, academics, competition, sponsoring tournaments, and a variety of other topics.
Another legal landmine will rest on how universities will vet NIL agreements. The settlement allows players to sign outside contracts. However, future NIL contracts will be sent through a clearinghouse run by Deloitte to ensure “fair market value” based on an actual endorsement. If your reaction to that sentence is that it cannot possibly be true, you’re not alone.
The settlement may also cut out NIL Collectives by prohibiting NIL compensation from groups it classifies as “Associated Entities or Individuals,” which would seem to mean boosters. Deloitte concluded that more than 70% of NIL deals with booster collectives would have been denied.
The purpose of the NIL deal vetting is to prevent schools from using fake NIL deals to circumvent the salary cap. However, the likelihood of this meeting a legal threshold is highly dependent on whether the Deloitte-run clearinghouse will have any teeth. Plus, it remains to be seen how the NCAA will attempt to handle a punitive case of cap circumvention.
As it relates to DU, it seems that the Crimson & Gold Collective will cease operations, and DU will move all fundraising operations in-house. Denver will likely continue to use third-party collectives as a support tool for student-athlete services like connecting athletes with outside endorsement deals (INFLCR, Opendorse, Compass, etc). The unknown is the development of student-athlete contracts with terms acceptable to both parties. Financial deals must address student-athletes on issues such as team violations, legal violations, academic performance, transfer, and on-field performance, which could complicate the pay-for-play era contracts.
The outstanding issues will continue to linger until there is a federal alignment of rules and guidelines, and not the current patchwork of state regulations. Key NCAA stakeholders have gone to Washington, D.C., to lobby for federal legislation relief and, potentially, an antitrust exemption. Alabama coach Nick Saban and Auburn coach Tommy Tuberville (now a senator) are said to be spearheading the discussions. However, no immediate relief is in sight from the feds.
In a letter, NCAA President Charlie Baker stated, “The settlement opens a pathway to begin stabilizing college sports.” Instead, it appears to be the beginning of more unanswered questions with a spate of lawsuits to follow.
Excellent post. It’s going to be The Wild, Wild West for a long while, as this issue heads down the road. This, plus the issues of wokeness and accommodations for the gender-confused athletes, will make for premature gray hairs in athletic departments. Wish we could expect logic and wisdom from elected officials, but with such a divided legislative cadre, how will that happen? Uncharted waters, to be sure.
This is nuts😱 Congress and the courts are doing their best to ruin college athletics…Will high schools be next⁉️
Unfortunately for high schools, yes!
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DU will do what it needs to do to keep up in the sports that Pio Nation cares about.
With an athletic budget now of more than $50 million annually, it’s too large of an annual DU investment not to leverage and maintain, but not large enough (still less than 10% of DU’s overall budget) to be nationally competitive in all the various D-I sports that DU sponsors. So, DU needs to be smart about which sports will get the national level of vitamin water, and which ones will get regional water and are patted on the head and told “do your best.”
I see this investment as more likely shaking out into rough tiers:
Tier 1: Ice Hockey, W. Gymnastics, Men’s and Womens’ Lacrosse and Men’s Soccer are all NCAA National Championship contenders right now, and should likely be funded to compete at the highest levels of those respective sports. Hockey is still the 800 lb Gorilla/Golden Goose at DU, and the only sport at DU that could pay for itself, so its priority and primacy are most likely assured.
Tier 1A: Skiing is also a national contender, too, but there are so few overall ski programs are NCAA contenders (less than 10 schools can actually roster a full NCAA qualifying group (12 athletes) and there are less 25 total programs nationally), so winning the NCAA national trophy in skiing remains low value/low national profile (a nice-to-have, not a must have). Accordingly, I see DU funding the program for competitiveness, rather than top-level program spending here.
Tier II: Every other sport at DU will likely be funded to compete for league titles and regional awareness. This likely means you basketball, women’s soccer, volleyball, golf, tennis, swimming, triathlon, etc. If any these teams surprise us by getting to a higher national competition level than they are now, perhaps DU will up the funding levels for those sports, but until then, I just don’t see DU finding more money for these…