The latest seismic wave in the ever-changing landscape of college athletics will keep administrators and outside forces checking their balance – and balance sheets – when it emerges July 1.
Less than two weeks remain before the recently approved House settlement – a landmark $2.8 billion antitrust case against the NCAA – goes into effect, and everyone involved is scrambling to find the best way to implement the far-reaching agreement that will forever change the business of college athletics.
Issues are so complex that the NCAA last week posted a 36-page online Q&A on implementation of the agreement. Also, a Title IX lawsuit was recently filed over the settlement with former Vanderbilt long-distance runner Kacie Breeding as one of the eight plaintiffs.
In an effort to provide a clearer big-picture look at the House settlement and to compare and contrast the issues facing two Division I Tennessee programs competing at different levels, the Nashville Ledger recently spoke with athletic directors Candice Storey Lee of Vanderbilt and The University of Tennessee at Chattanooga’s Mark Wharton about the challenges ahead.
Private school Vanderbilt is a charter member of the Southeastern Conference (one of the Power Four conferences that played a key role in charting the future of college sports) while Chattanooga, part of the University of Tennessee system, competes at the FCS (Football Championship Subdivision) level as a member of the Southern Conference.
Both Lee and Wharton say they are glad the settlement was approved by federal judge Claudia Wilken and are ready to implement the twofold decision that will pay $2.8 billion in damages to former athletes (dating back to 2016) over a 10-year period and allows schools to directly share up to $20.5 million with current athletes.
“It’s really important that we view the House settlement for what it is,” Lee says. “It hits a few key things and it’s important for the future, but it’s not meant to be a comprehensive solution. There are still so many other things that we as an industry will need to work on and find solutions for.
“At Vanderbilt, we’re very excited about the future because we think that this is going to offer some much-needed stability and much-needed national standards,” she adds. “Now it’s not the end-all; it’s not the comprehensive solution.
“If you were asking us for a comprehensive solution, it would be a federal one, and so this is a step toward that, but there’s more work to be done. But in the meantime, we’re pleased with the direction and we’re excited about the new model.”
Wharton is concerned the settlement will widen the gap between the Power Four conferences (SEC, Big 10, ACC and Big 12) and everyone else in Division I football FBS (Football Bowl Subdivision) – the Group of Five includes the American Athletic Conference (Memphis) and Conference USA (MTSU and Western Kentucky) – and FCS conferences like his.
Chattanooga and ETSU are Southern Conference members, while Lipscomb and Austin Peay are Atlantic Sun members. Belmont is now in the Missouri Valley Conference, and Ohio Valley Conference members include Tennessee State, Tennessee Tech and UT-Martin.
“It’s crazy times, and everybody in the country is trying to figure it out. No one’s been through this before,” Wharton says. “I’m leaning on our leadership team and our staff to be able to guide us to make sure we’re more methodical and that we just don’t jump out and make commitments that will hurt us long-term.
“I definitely see the gap getting wider (with) the Power Four,” Wharton adds. “The media rights money continues to be astronomical, and then you throw in the College Football Playoffs and the expansion.
“That’s even a bigger gap of money that schools like UTC and the FCS level don’t get. I won’t even say a percentage – we don’t get any of that. When you get into the $20 million that you can share, that’s not 2% of what we can provide.”
Tennessee AD Danny White shared his thoughts with Nashville reporters in April 30 – five weeks before the House settlement was official.
“There’s obviously just enormous sea-changing in everything we’re dealing with. We’ve been working since August on what the next chapter of college athletics means for UT Knoxville – what our actual department’s going to look like,” White said. “So we’re moving forward and executing our plan and, in a lot of ways, excited about it. I think that it’s an opportunity for us to continue to get better and grow on the success we’ve had here in the last four years.”
The House settlement
Big picture-wise, gone are the amateur days of college athletics. Even though administrators still see their primary task as providing educations for their student-athletes, colleges are closer than ever to a pro sports model, which could lead to unions and collective bargaining.
Lee explains the two parts of the settlement.
“There’s a backwards-looking damages that everybody that’s included in the class that does not opt out will receive damages that will be funded by the NCAA. And there is a very prescriptive breakdown for that,” Lee explains. “The majority of the damages is going to go to football and men’s basketball. That is prescribed. That is looking back.
“The new (revenue-sharing) model that starts July 1, that’s up to each institution. Each institution will decide which sports they would like to directly share revenue with. That is literally a local decision,” Lee says, noting Vandy “is prepared to share revenue of up to the cap that is established.
“And while I’m not going to publicly disclose how we’re going to split up that $20.5 million, I will say that we’ve been working on a plan really for the last year in anticipation. So it felt good on Friday night (June 6) to get that final approval. We are ready. Our teams are ready.”
Lee says Vandy coaches have “autonomy” over revenue distribution for their programs.
“The thing to understand that, with the institutional revenue, that’s up to each institution how they want to split it up. And then within each program, there are likely to be different reasons that will determine how each program decides to split up revenue.
“But also remember, that cap changes every year and that each year will be different. That is, each year will be different as you look at roster composition and what you need within each program. That’s likely to be a year-by-year decision.
“This is also a great example of coaches having the autonomy for programs who have been allotted revenue share. Those coaches then have the autonomy as they recruit and retain and build their rosters to determine how to share that revenue.”
For example, the NCAA.com Q&A on implementation clarifies that colleges can offer high school athletes an NIL revenue sharing agreement beginning Aug. 1 of their senior year. However, athletes must wait until the signing period before they can sign the offers.
Scholarship and roster size
Another wrinkle is that scholarship limits have been eliminated, meaning colleges now match scholarships to roster limits.
Lee notes that while revenue sharing gets “a lot of attention,” the House settlement also creates the opportunity for sports to have more scholarships.
“In the past, the NCAA would establish a scholarship limit, and you had to honor that limit,” Lee says. “In a lot of cases, that scholarship limit might be lower than the number of people that are on your team. But now there’s no scholarship limit. So institutions can decide if they want to give scholarships or how they want to divvy that up.”
Chattanooga AD Wharton says his school will focus on that aspect as they go forward in this new era.
“We’ve decided we’re going to opt in to the settlement but really focus on the roster limits. We have really worked hard, mainly doing the basketball and football, with our collective to be able to position ourselves for the fall with our student-athletes,” Wharton says.
“We have a plan that we hope to socialize in the fall that is going to allow us to do other new student-athlete enhancement, whether it’s Alston money, rev share – those type of things – on top of continuing to enhance our nutrition and strength conditioning and athletic training that the House settlement allows us to provide.”
Wharton says his school’s fundraising efforts will be expanded in order to avoid what is popularly known as “donor fatigue” among current supporters.
“There’s a fine balance. We have had great success in corporate sponsorship, donations and ticket sales over the last seven years, but it’s still our responsibility to bring new people into the fold so that we’re not taxing the same people over and over again and they get donor fatigue. And so, it’s a combination of the two,” Wharton says.
“But certainly it’s our staff and our campus that needs to be able to continue to help us broaden that net and bring more people into the fold,” he adds. “We’re very fortunate with the NIT victory (the men’s basketball team beat UC Irvine for the NIT championship in April) and football success and women’s basketball success that the community is definitely behind Chattanooga athletics. I said with this plan that I want to do that we have a fighting chance to be successful.”
‘NIL Go’ is the path forward
Separate from revenue sharing, athletes also can still sign NIL deals (Name Image Likeness). But that, too, is changing, affecting some of the collectives that have popped up at schools. While affiliated with schools, they are not part of the athletic department, and many have been criticized for how they operate.
Now, all third-party deals will go through the “NIL Go” clearinghouse that is operated by Deloitte and the LBi software system. Athletes will have to submit NIL deals worth $600 or more for approval. There’s also the newly created College Sports Commission that will monitor compliance.
Certain “guardrails and standards” have been put in place, Lee says, but the thrust of the House settlement is focused on local decision-making regarding revenue sharing.
“Then you decide how you want to implement them,” Lee says. “This is one of the things that I think is getting lost with the discussion around the House settlement. This is actually a new model for all of college athletes for all sports – not just football, not just basketball.
“Every student-athlete can have the opportunity to earn NIL (deals), external to the institution, third-party NIL, that is. They have a valid business purpose and that is approved by NIL Go, which is the entity that is going to review all of those agreements that are above a certain dollar amount ($600).
“That is available to all student-athletes. One of the things that’s important to us at Vanderbilt is that we are working very hard to build the infrastructure and the engine that will continue to support NIL efforts for student-athletes in this new model. Everybody can benefit.”
To that end, Lee and Chancellor Daniel Diermeier recently announced the formation of Vanderbilt Enterprises to “underscore our readiness to embrace innovative models that support excellence in education, research and athletics.” Markus Schreyer will serve as CEO.
Lee says the goal of NIL Go is to make sure student-athletes are protected in pursuit of their NIL opportunities.
“So it’s not to dissuade student-athletes from having NIL opportunities, but it’s to ensure that they are valid NIL opportunities,” Lee says.
“And to be valid, it needs to be that the money received is an acceptable range of compensation as determined by NIL Go and that it’s valid business purpose. I think that probably one outcome is leveling the playing field potentially, but another outcome is that a lot of student-athletes will get the benefit from legitimate deals.”
Will lawsuit halt revenue sharing?
In a word, no. Revenue sharing will begin as scheduled July 1 for schools that opt in, but the Title IX lawsuit will freeze the portion of the settlement regarding the $2.8 billion in back payments to athletes from 2016 through 2024.
The settlement formula states that 75% of future revenue will be shared with football players, while 15% goes to men’s basketball players, 5% with women’s basketball players and the remaining 5% to all other sports.
Breeding, who was at Vanderbilt from 2016-2020, is joined in the lawsuit by seven other former athletes who say this the settlement formula doesn’t comply with Title IX and is more about following the law than the money
“This isn’t about football and basketball,” Breeding said in a recent interview with Sean Keeler of the Denver Post. “I hope you get your bag.
“But we all were athletes at this school … there were not rules in place that we were on different pay rates. We should all be getting paid the same. You think about Caitlin Clark (Iowa basketball, WNBA) or Livvy Dunne (LSU gymnast, model/influencer), they’re superstars in their own right. Are you going to pay them minimum wage because they weren’t born male and went into football and basketball?
“(People), if they don’t understand this case, they would say, ‘You’re in this for a money grab,’” Breeding continues. “And I am someone of very strong moral convictions, not someone that would get into something just for the press. It’s not going to be a huge payout. This is more of a statement to say, ‘Look, if you’re going to pay reparations, why not pay them to the letter of the law?’”
To sum up: What does this all mean to the future of college athletics? That even though a settlement is in place, things remain very much unsettled, and the landscape is still prone to shifting at any moment.