Perhaps the most momentous week in the history of college athletics has arrived.
Amid three antitrust cases, the NCAA and its conferences are fighting over how they will fund an estimated $2.8 billion in back pay owed to former student-athletes for the use of their name, image and likeness. According to Yahoo Sports, the Division I Board of Directors approved a framework that requires the NCAA to fund $1.1 billion, or 41% of the total, while schools fund $1.65 billion over a 10-year period through a reduction in school distributions.
If $2.8 billion seems like a hefty price tag, it’s actually the cheapest part of the deal: The NCAA would have to pay an estimated $20 billion in upfront damages if it doesn’t accept the deal and ends up losing in court, which is a likely occurrence given the governing body’s history in the courtroom.
The cost is not so much the problem. The issue that is further widening the divide between the power conferences and the non-football conferences is trying to reach an agreement on how the bill should be divided. Under the approved framework, the power conferences will pay about $644 million in damages, while the 27 non-power conferences will pay $990 million.
The NCAA determined how much each of its 32 Division I conferences contribute by creating a formula based on the amount of distribution a league earned over a nine-year period starting in 2016, according to documents obtained by Yahoo Sports. This is where the non-football leagues that thrive in college basketball are hit hardest: Most of the NCAA’s distribution to their schools comes from revenue from the NCAA men’s basketball tournament, meaning Back damage could represent a significant expense compared to your sports budget. .
For that reason, Big East commissioner Val Ackerman and other non-football leagues went on the offensive. They argued that their share of the bill was too high and that the power conferences should pay a larger share in damages, since most of the back pay goes to former student-athletes of the power conferences. Legal experts agreed: An economic report found that 90% of NIL back pay would go to Power Five (SEC, ACC, Big Ten, Big 12 and Pac-12) football and men’s basketball players.
If accurate, that would mean $2.5 billion of the $2.8 billion deal would go to those demographics.
However, the Big East and the rest of the non-football conferences were not heard. His workaround of having power conferences pay 60% of the damages while powerless leagues pay 40% was considered, but ultimately not approved.
Now, the Big East faces paying up to $7 million a year or up to $70 million over a 10-year period. That equates to between $600,000 and $700,000 per school year, according to Yahoo Sports. When looking at the breakdown, take, for example, a school like UConn, which reportedly has a $90 million budget, compared to the average power conference school with a budget of around $130 million that faces a $1 to $2 reduction million annually.
Schools like UConn, the only public school that sponsors Division I football in the Big East, face a higher percentage of their budget being taken away compared to power conference schools, even though most students -athletes who will receive back pay have competed. in one of the Power 5 leagues.
The division of damages was not the only complaint non-powered conference leagues had with the deal.
In the agreement, a new NIL model expected to be implemented in fall 2025 will allow schools to directly compensate athletes for their NIL in a revenue-sharing concept that includes a salary cap. The cap could start at $22 million annually per school, and while they are not required to meet that cap, those in the power conferences are expected to be aggressive in the NIL space for a long time.
As for the Group of Five and non-football leagues, sharing revenue with student-athletes wouldn’t be as easy. Athletic departments at that level typically don’t make much profit and often struggle to provide athletes with third-party benefits. Whether some of that is self-inflicted or not, such compensation would put many schools in even greater financial straits.
Congress has yet to intervene regarding NIL and the idea of “pay for play,” but the idea of schools directly compensating their athletes has long been thought to be the final direction in sanctioning compensation between students and athletes. The Athletic directors hoped that this would not be the case, but it seems that it will soon be a reality.
The next frontier of college athletics will take shape this week when Power 5 conferences vote to resolve antitrust cases. The ACC and the Big 12 already voted in favor of the deal. The other three power leagues and the NCAA Board of Governors will also vote on the matter.
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