A Whole New World

College sports were forever changed once NIL legislation was passed and went into effect, allowing athletes to cash in on their personal brand.  Now we're even seeing star high school athletes making millions in endorsements and other promotional opportunities before they even enroll in college.  Well, as it turns out, that was just the tip of the iceberg.

Almost as soon as this new era in college sports dawned, schools began creating NIL "collectives," which are basically a recruiting tool that ensures them a certain amount in NIL dollars will head their way if they choose that program...but only if they choose that program.  Recruiting turned into an arms race to see who can offer the best NIL deal, and it drove coaches like Nick Saban out of the game.  These collectives were established because boosters wanted to make sure the program doesn't lose out on top recruits, but NCAA rules prohibit student-athletes being directly compensated by their school.

Or, I should say, NCAA rules used to prohibit student-athletes from being paid directly.  Not anymore.  If the NIL opened the door a crack, it's suddenly been swung wide open.  Because last week, the NCAA reached a landmark $2.8 billion settlement that resolved three pending lawsuits and paved the way for schools to share revenue with student-athletes.  Once approved by the judge overseeing the case, schools will, for the first time, be able to directly pay their student-athletes.

Needless to say, this agreement completely changes college sports as we know them.  Athletic Departments will suddenly need to find room in their budgets to pay their student-athletes.  Division I schools will be allowed (but not required) to set aside up to $20 million of their sports revenue to share with the players.  It would be up to the schools how to divide it, but you'd have to figure it would disproportionately go to football and basketball players.  You'd also have to figure it would disproportionately go to Power 5 schools, furthering the financial gap between them and other Division I members.

The settlement also provides compensation for the nearly 25,000 former college athletes who were represented by the plaintiffs in the original lawsuit, which paved the way for what has been called a "new world."  The $2.8 billion settled that antitrust suit and will effectively give those athletes backpay for revenue they've already foregone.  While the distribution is one of the things that needs to be worked out over the next several months, the damages will be paid out to athletes in three different categories: Power 5 football & men's basketball, Power 5 women's basketball, everybody else).

Had the suit gone to trial, it's very possible the NCAA would've lost and had to pay out much more in compensation.  The NCAA hasn't been faring well in court over the past few years and, despite repeatedly asking for some sort of federal guidelines or standards, has gotten no help from Congress on the legislative front.  So, seeing the writing on the wall, they settled.

Naturally, not everybody is happy about the settlement.  Schools in the Power 4 conferences will figure it out.  The SEC and Big Ten are both starting their new TV contracts next season, which will bring them even more revenue, even after carving out a chunk to give to the student-athletes.  I'd imagine the other College Football Playoff conferences and leagues like the Big East will also have no issue coming up with the money while also having enough to keep their Athletic Departments afloat.  They don't really have a choice in the matter, and they've already managed to do it with the NIL collectives, so this really shouldn't be much different.

What about the schools that aren't in the Power 4 or have CFP football programs, though?  How will they keep up?  These are schools and conferences that are already operating on a fraction of the budget those larger schools have.  That's why they play guarantee games!  Just like there was no way around letting athletes benefit from the NIL, there's no way for them to avoid directly compensating players.  But will they be able to afford it?

You'd also have to figure there will be Title IX implications.  Schools are required to have proportional scholarship and participation opportunities for men and women, as well as equal funding.  Will the same rules apply when it comes to athlete compensation?  I doubt they'd be able to get away with paying just football and basketball players, but does that mean everyone who's on scholarship also receives a salary?  What about those who aren't on scholarship?  And what's the percentage?

While all of those questions still need to be answered, the conferences are taking a proactive approach on how to move forward.  The SEC and Big Ten have come together to form a joint advisory group to address the "significant challenges" facing college sports.  The group will have no administrative authority and will only serve as a consulting body, but the goal behind it is clear and important.  College sports are changing like never before and the schools/conferences want to make sure they have an active role in what happens.

There's been rampant speculation for a while that the Power 4 conferences will eventually split off into a separate division.  Even the NCAA President has suggested it's a possibility.  He was speaking about it more for football governance purposes, but, considering the recent developments, it seems more than ever like it would be a wise and prudent decision.  I can easily see Division I being separated into one group for the larger schools that can afford to pay their student-athletes and another for those who can't.

Make no mistake, this is nothing short than the professionalization of college athletics.  Some might argue that's a good thing.  But no one will dispute the fact that it'll forever change the model.  Especially now that the transfer rules are also being completely blown up.

That's the latest major change coming to college athletics.  A federal judge has ruled that the NCAA's transfer rules requiring an athlete to sit out for a season whenever they change schools constitute an "unfair restriction of trade."  As a result, student-athletes will be able to transfer schools whenever they want without penalty.  In effect, they're allowed to essentially become free agents every year.  If you thought the transfer portal was out of control before, just imagine what'll happen now!

We already knew that we'd see a massive shift next season with the Power 5 becoming the Power 4.  As it turns out, the supersized conferences will just be the start.  College sports are changing like never before.  The 2024-25 season will be the start of a new era.  In more ways than one.