Summarizing the NCAA vs. House Settlement and what it means (including High School Athletics)!

There has been a lot of news about the NCAA vs. House Settlement and we wanted to clear up any misconceptions, offer a Point of View and discuss broader impacts. The settlement – negotiated by plaintiffs seeks back-NIL pay and as such the NCAA and major college (P4) leagues (SEC, Big Ten, ACC, Big 12)- has 3 main parts in the settlement: 1) $2.8B in back-pay to ex-athletes 2) $20B+ in rev-share to future athletes 3) New roster rules & enforcement arm. Let’s break down each.

BACK PAY:

$2.8B in back-pay: Yes, that sounds like a lot and it is but it will be spread over 10 years. From NCAA and school distribution (inclusive of the NCAA Basketball Tournament) the distribution will be determined using a formula based on a player’s value – $2.3B goes to P4 FB/MBB players (avg of $120K a player over 10 years). These payment should start soon but no specific date has been provided.

REVENUE SHARE:

This is the part that is really making the headlines. It includes a roughly $20B+ rev-share model over the next 10 years. During this time, schools must stay under an annual cap determined thru avg of Power 4 revenue data. Currently the initial year cap in 2025-2026 is $20.5M per school with escalators to as high as $33M by 2035 – schools are not *required* to share revenue – rev-share to start July 1. While a cap is in place the allocation of the cap per school will vary with most colleges following a model of 75% (+5-10%), 15%-Men’s Basketball and the rest to other sports. This will vary greatly.

NEW ROSTER RULES AND ENFORCEMENT:

The NCAA vs. House Settlement had a critical element to it that is impacting roster development, High School Recruiting and the Transfer Portal. Specifically roster structure! Now schools are permitted to scholarship full rosters under new limits. In the past some sports where “equivalency” sports (aka Partial Scholarships sports). Now roster limits have changed dramatically some addition and some reduction to the norms depending on the sport. For Football the roster is 105 (from 85); Men’s Basketball is 15 (from 13); Baseball is 34 (11.7) while Women’s Soccer is now 28 while in many situations rosters were well over 35-40 including walk-ons. While roster limits are real it will have an impact on certain sports from school to school. Not every school will fill the roster limit, some will scholarship at various level and of course the transfer portal still will impact roughly 25% of the open roster spots across the board in our opinion.

On the enforcement side of this is a newly implemented Cap management system managed by a newly formed entity entitled College Sports Commission. This newly formed entity will be the one’s serving as the police cap requiring regular school submissions into a new platform called “NIL Go”: a Deloitte-run entity to approve non-school (booster) NIL deals with athletes as well as brand and “true NIL” deals. On the legal side, arbitration, aka a neutral arbitrator to hear appeals will also be handled by College Sports Commission.

SUMMARY:

As you can see this is the “first step”. This isn’t the last time we will hear about College Athletics trying to reshape itself. There is still need to define employment or non-employment status which candidly would require congress to step in (already started). So we shall see but no doubt this will be transformational and far reaching at several levels. At the High School level we are still seeing steady growth in “true NIL” by brands, local, regional and national businesses and the sophistication of the deals is growing. Much like college we expect to see more rigor around agent involvement, more resources to ensure proper disclosures are happening to protect both sides of the deal and continued enforcement of amateur rules so that NIL at the High School level does not become “pay to play”.

For more information or to assist you, your brand, team, school or association on all things NIL and College Recruiting, please reach out to thebedfordagency@gmail.com or call us at 405.503.9284 to inquire about our workshops, training, community education nights, marketplaces, disclosures, training videos consulting and much more.