The first thing you need to understand about the House settlement, despite bold proclamations that it will spawn an exciting, new era of college athletics, is that it amounts to a big, fat L for the NCAA.
It consolidated three antitrust lawsuits and opted to avoid trial and the prospect of potentially catastrophic financial losses, essentially accepting a 20-point beatdown instead of what could be 40 or 50 given its inauspicious record in litigation.
So schools will pay $2.8 billion to past college athletes who weren’t allowed to receive NIL payments, plus up to $20.5 million per school per year in revenue sharing to current and future athletes. Over the settlement’s 10-year umbrella, that could amount to $20 billion of money that, by the way, only a handful of schools actually have.
In exchange, they gained “injunctive relief” from similar lawsuits.
But, and here’s the problem, not from others.
As sports attorney Cal Stein told The Athletic: “The House settlement started with the goal of the NCAA putting an end to the losses it has taken in their litigations all over the country. But the great irony is that’s really just going to lead to more lawsuits.”
It’s a weed killer that wiped out the dandelions but becomes fertilizer for crabgrass.
It put one set of litigation into a box but opened Pandora’s.
It’s the beginning of a new era of college sports … but might be the beginning of the end.
It took a whole five days for the first lawsuit to be filed in federal court, alleging the $2.8 million in back payments violate the gender equity provisions of Title IX. The payments were supposed to begin next month. Now they’re on hold, pending a court hearing.
That’s about the past. It’s the lawsuits about the present that could most affect the future of college sports, rendering it even more unrecognizable an unappealing to the casual fan than it already is. The day when “college” teams are operated as for-profit professional organizations without eligibility limits, Title IX restraints or academic requirements is suddenly closer than you might think.
There are two ways out. One is to get an antitrust exemption from the government, but that requires bipartisan Congressional at a time when the two sides of the aisle a) have far more imperative legislative fish to fry and b) can’t agree whether the sky is blue or red. The other is to gain antitrust protection through collective bargaining with unionized athletes as employees, which the NCAA has continually resisted.
Without a legal forcefield, they’re left exposed.
“Like a lot of stuff in college sports,” attorney Todd Shumaker, who specializes in sports and higher education, told Sportico, “it’s not if you are going to get sued, it’s when you’re gong to get sued. … We are happy to have the business.”
Title IX
The only reason we haven’t seen lawsuits over the House settlement’s annual revenue sharing provision is because money can’t be distributed until July 1. But know this: They’re coming.
The premise is simple: Title IX guarantees gender equity in federally funded institutions like universities, and this is money being paid by universities directly to athletes — and, according to most athletic directors, 90% or more will go to male football and basketball players.
There is gender equity in scholarships, facilities and budgets. Why shouldn’t there be in athlete compensation?
The House settlement involved conferences, which don’t receive federal funding and thus aren’t under the purview of Title IX. Individual schools do and are, though, which makes them easy targets for lawsuits.
According to Sportico, “Lawyers say several institutions are preparing litigation resources on par with the ($20.5 million) maximum revenue-sharing pools.”
NIL
The House settlement permits athletes to receive outside deals monetizing their name, image and likeness, or NIL. The catch is anything over $600 must be reported to a Deloitte-run clearinghouse that audits them for fair market value, hoping to regulate the wild spending of the current system that predictably morphed into unrestricted free agency without a salary cap.
By one estimate, 70% of the current NIL deals would be invalidated.
Good luck with that.
The NBA has a salary cap that is collectively bargained with its athletes union. But it has no control over Kawhi Leonard’s shoe deal with New Balance. If New Balance wants to overpay him in an effort to carve out market share, that’s its prerogative under the laws of capitalism.
How might a judge view that sort of regulation?
“I’m skeptical,” said Jeff Smith, the founder of San Diego State’s basketball collective. “I believe the legal system is porous and there are many people inside the conversation that have a for-profit mentality, not only the athletes but the agencies. How do you stop that free market train from leaving the station?
“It’s kind of impossible.”
Eligibility
The courts are already inundated with lawsuits from athletes seeking an additional year of eligibility. And why wouldn’t they, knowing that, in a sport like basketball, they can make more from NIL in one year in college than over an entire pro career bouncing around Montenegro, Romania and the Philippines.
The problem now is the athletes are receiving money directly from the universities, not an outside collective. Professors are granted tenure, guaranteeing a position for life. The janitors who clean their classrooms don’t have a four-year limit before being forced to find another job. Why should paid athletes, whether or not you classify them as employees?
The notion of athletic eligibility has already been teetering. The requirement to sit out a season after transferring was shot down by the courts. Another case negated junior college years from counting against NCAA eligibility. Miami had a tight end last season in his ninth year of college.
“All of these rules are … very arbitrary and not (collectively) bargained with the players,” sports attorney Darren Heitner told CBS Sports. “Until the NCAA decides to treat the players as employees or a unit to bargain with, they’re going to be stuck with challenges on their antitrust law.”
Academics
If you’re cutting a $3 million check to your quarterback, you’re not paying him to get an A in molecular biology. He’s paid to perform on the field, period, and pulling an all-nighter before a Friday midterm isn’t helping him find the slot receiver against a Tampa 2 defense on Saturday afternoon.
Patrick Mahomes isn’t sitting in Greek philosophy lectures or evening study hall. Why should any other paid athlete?
It’s a fair question: At what point do college athletes stop being college athletes?
The answer is, we’re about to find out. Pandora’s box has been pried open.
The NCAA no longer makes the rules. The courts do.
