It is official, the NCAA and the power conferences have agreed to settle anti-trust cases and adopt a new compensation program for athletes. Implementation is several months away, but schools will need to make quicker decisions that can be explained to recruits no later than this fall. Final approval by the presiding judge may take another couple of months, but no significant changes are expected.
The Alabama Crimson Tide sports programs will not be in a unique situation, but by no means will schools compensate athletes in a uniform manner.
Over 10 years, back payments will be made to athletes, with the largest shares going to football and men's basketball players. The total of back pay amounts to over $2.7B. The back pay totals will be calculated back to 2026.
Going forward, schools can opt-in to compensate athletes a portion of sports revenues. The total, annual amount is 22% of the average power conference revenue streams. For the Alabama Crimson Tide Athletic Department, the total should be around $22M. Each school will be allowed to determine how it will distribute the revenue share. Schools can choose less than 22%, or opt out and not participate.
NIL will change but in no way will NIL become less important to most athletic programs. One NIL executive explained the continued need for NIL compensation, "There’s going to be a salary level, and collectives are going to be the bonus or that key differentiator." In simple terms schools will cover an athlete's base pay, and bonus sweeteners, which can still be significant, will come from NIL funds.
One scenario is some schools will opt out of the revenue-sharing plan, leaving them dependent on NIL funds to attract athletes.
There is no shortage of unknowns. The NCAA plans to provide a new enforcement program to prevent 'pay to sign' recruit and transfer deals. Outside the NCAA offices, there will be little confidence such an enforcement effort will succeed. Other anti-trust cases are moving forward and more could be added unless the federal government provides an anti-trust solution for the NCAA and college sports.
How muddled will the new world of college sports be? Very, is a fair one-word answer. For perspective, consider some numbers reported over the last several months. It is believed the most aggressive football programs require $15M to $25M annually for player rosters. In men's basketball, the range is thought to be $5M to $7M. How do those numbers work when the speculated market rate for a top quarterback is around $3M? Add in player payments to other teams in a school's athletic programs and the new revenue share of around $20M is not close to being enough. Total costs will be determined by market conditions, but could certainly reach $40M-plus after adding NIL funds.
All the above has good that far outweighs any bad. But this new world of what can be called a new version of 'professional' sports can be expected to have winners and losers.