College sports are raising many questions as a landmark agreement emerges in the House of Representatives

How schools will distribute a huge settlement in the House case and where the funds will come from are just two of the many questions facing college sports this week.Getty Images

CCollege sports are approaching the moment of reckoning.

Multiple sources indicate that a joint settlement in the House, Hubbard and Carter antitrust cases regarding direct revenue sharing with athletes could be reached as early as this week. A source briefed on the talks told Sports Business Journal that Notre Dame had until last week to sign the settlement, pending the deadline for presidential approval by the Power Five leagues (the Pac-12 is in the lawsuit involved) ends this week.

The deadline is triggered at least in part by a May 23 hearing in Fontenot v. NCAA – a separate antitrust case being heard in Colorado – and sets up what could be one of the most consequential weeks in college athletics history find a way forward or risk losing your stomach.

“If you let it go and don’t come to an agreement,” an industry source told SBJ on condition of anonymity, “then it’s over for us.”

In short, a deal in the House would give college athletics a step toward what appears to be new stability, even if it's not quite the light at the end of the tunnel after a tumultuous three years. However, if the settlement talks fail, it would have catastrophic financial consequences for everyone involved. Yahoo Sports reported last week that the NCAA and Power Five leagues could be forced to file for bankruptcy and pay up to $20 billion in immediate damages if talks fail.

Important questions still need to be answered. The price tags are growing. The prospect of chaos versus clarity is on a knife's edge. All in all, college sports may be just a few days away from two completely different futures.

“College sports [are] Change. “Three years from now it’s going to look a lot different than it does today,” said a Power Four athletic director. “But I don’t think any of us have a clear idea of ​​what exactly that is, other than knowing that times are changing.”

What do schools pay for and where should the money come from?

The settlement focuses on the three antitrust lawsuits mentioned above – House, Hubbard and Carter – filed against the NCAA and Power Five conferences seeking repayment for prior restrictions on athlete compensation.

The scope of the agreement has changed in multiple discussions between the parties, but it is expected that schools will be eligible to opt into a revenue share model that would provide approximately 22% of the media rights, sponsorships and ticket sales of an average Power Five school , starting in time for the 2025-26 school year. This number is likely to be somewhere between $20 and $25 million. The payback between the NCAA and the leagues could also reportedly reach more than $2.5 billion.

The “revenue share cap” is expected to be optional. However, industry sources point to the competitive disadvantage that those schools that do not spend to the maximum will face, particularly those with the largest budgets.

“We know that most Power Four schools will choose to participate because of the competitive nature of college sports in recruiting and retention,” said Casey Schwab, CEO of Altius Sports Partners. “The real trick is, 'Okay, if we participate, how much are we going to do and how are we going to redistribute those dollars or where are those dollars going to come from?'”

How and to whom the settlement money will be distributed is an ongoing question. Equally pressing is the question of where this money could come from for those schools that decide to contribute to a cap. In reality, those who choose to pay up to the maximum will have to get creative. Multiple sources say schools will likely be able to factor up to $2.5 million in Alston grants and scholarships into the final figure. That would potentially mean schools will look to fully fund scholarships for sports that previously had restrictions, such as baseball and softball, among others. However, that requires accounting for $15 million or more annually, not to mention potential losses in NCAA distribution to cover damages due over the life of a settlement.

FBS administrators have privately expressed the potential need to cut non-profit Olympic sports, but even draconian measures like these would only save a few million dollars a year. There's also the possibility that athletic departments will look to cut administrative and coaching staffs, which have grown significantly over the past decade. Just last month, new Texas A&M athletic director Trev Alberts fired more than a dozen senior executives, citing “emerging threats to our business model” in a statement to the Bryan-College Station Eagle.

“Simply canceling sports is not always a priority, nor should it be,” another Power Four administrator said. “The way I look at it is: I have a bogey of $21.5 million and I have to find a way to pay for it.”

How revenue sharing will impact all college sports, not just football and men's basketball, has yet to be decided.Getty Images

How does Title IX fit into the broader revenue discussion?

The biggest outstanding question surrounding the agreement is how best to distribute the revenue that schools would have to share with athletes — and that raises significant Title IX concerns.

The settlement is not expected to detail how schools allocate their resources, lead attorney Jeffrey Kessler clarified.

“This settlement is an antitrust case and is not a settlement of any Title IX claims,” Kessler said. “Schools must decide how to comply with Title IX. This applies to everything the schools do…and this also applies to any claims made regarding benefits provided under the settlement.”

Given this reality, most college athletics are concerned about how Title IX might apply to potential revenue sharing. In theory, the policy has long been assumed to provide equal access for men and women to athletics and other school-sponsored activities. However, if it were interpreted to mean equal pay, schools would not be able to simply redirect most of their revenue to their highest-grossing players, such as football and men's basketball.

“Ultimately it has to be decided in court one way or another,” said a Group of Five sporting director.

“Either you're going to start emphasizing a lot of the options for men or defunding them, or you're going to rely on that market basis, someone is going to challenge it and the courts are going to do it.” That's where you have to decide whether to Basketball and football can give different amounts.”

It is also unclear to what extent the agreement would protect against future litigation, since on paper the most direct route to this would be a congressional exemption from antitrust law.

The NCAA has continued to ask its senior administrators to advocate for the people of Capitol Hill on the issue, but in an election year there are doubts as to whether congressional leaders will take up the issue.

What about NIL collectives?

Name, image and likeness collectives have become increasingly mainstream, but given the impending deal with the House of Representatives, their place in the long-term landscape is also unclear.

Again, schools with the highest budgets in the FBS are expected to use the cap as a practical requirement to remain competitive. Should Title IX be applied to this revenue sharing or further differentiation be made in the distribution of these funds rather than redirecting the majority to football and men's basketball, collectives would allow schools to fundraise independently and above the cap, as they do They are not expected to count towards this.

“There is a misconception that this deal in the House will eliminate all forms of pay-to-play, the free market of NIL and collectives in general,” said Walker Jones, executive director of Ole Miss' Grove Collective. “The dynamics will change, but I don't think there will be any substantive changes that everyone thinks will come with it.”

The other key cog in the wheel of collectives' viability is the potential cuts to college athletic departments. A persistent fear among administrators is that staff will have to be cut to meet cap requirements. If that's the case, an outside collective operating outside of an athletic department's payroll could allow for more hands to be involved in fundraising.

“Building an infrastructure that allows us to process payments to athletes in a secure and well-functioning manner will be critical to moving forward,” said Jeremy Smith, executive director of the Garnet Trust Collective in South Carolina. “There's a lot of talk about this: Is the money being funneled from the university to a collective, or is it when the university receives the money from the conference, is it just stopped there and distributed? There are still a lot of unknowns.”

However, the proposed deal is expected to place a greater focus on monitoring NIL. Yahoo Sports cited a summary of the possible settlement last week, reporting the court could reaffirm the NCAA's existing compensation rules, including banning booster payments if they don't involve “true NIL,” while a settlement could also encourage schools to include collectives – A house.

“People are waiting to see what impact this has on the collective,” said an FBS athletic director. “Because if you open up to the Department of Education and Title IX [by bringing it in-house]Just keep the whole damn thing external.”

Collectives aside, a defining moment has arrived for college athletics, and this week could well define the organization's next century.