The NCPA opposes settlement that would allow the NCAA, conferences, and colleges to ban colleges from sharing their revenue with athletes, ban all NIL money from collectives that would pay athletes based on their status on their team, and more.
The NCPA announced today its opposition to the preliminary settlement agreement in the House v. NCAA antitrust lawsuit.
NCPA Executive Director Ramogi Huma stated, “Despite discussions in the media that the proposed settlement will bring revenue sharing for athletes, there are terms in the settlement that would allow the NCAA, conferences, and colleges to prohibit any athlete revenue sharing. The settlement could also eliminate virtually all of the money that collectives are paying college athletes within just a few months from now. And instead of agreeing to spare non-revenue sports from cuts as a benefit for that subclass, the settlement explicitly asserts conferences and colleges have the right to cut sports.”
The settlement allows the NCAA, conferences, and colleges to collude to ban any revenue sharing if athletes on any team are deemed to have the right to collectively bargain. Such a determination may soon be made in the NLRB’s unfair labor practice charge against the NCAA, Pac-12, and USC as joint employers of USC football and basketball players.
The settlement also allows conferences and their respective colleges to simply decide not to share revenue. The settlement is silent on conference realignment so conferences could realign into one conference, with 3-4 power divisions, to ban revenue sharing at any time during the year settlement period.
The settlement would phase out full athletic scholarships (head count scholarships) and replace them with partial scholarships (equivalency scholarships) that can fall below current full scholarship levels.
Additionally, the settlement allows the conferences and NCAA to collude to ban all NIL money from collectives that would pay athletes based on their status on their team. This would snuff out a thriving collective NIL marketplace that is already set to pay athletes approximately over $1.3 billion this year and $2.1 billion next year (based on “Opendorse NIL at 3” report) in exchange for possibly receiving $0 in revenue sharing.
“Shutting down the money from collectives is a central part of the settlement and is an attempt at allowing colleges to re-monopolize booster money. Before NIL, boosters could only pay the colleges to try to give their favorite program an advantage. The colleges want that money back,” Huma stated.
The settlement also includes rules to ban boosters and collectives paying NIL money for athletes to support nonprofit purposes.
The settlement could also stifle a new direct NIL pay market created on July 1, 2024 when a Virginia NIL law guaranteeing its colleges the ability to directly pay their athletes NIL compensation without limits became effective. The Virginia law states in part:
“C. No athletic association, athletic conference, or other organization with authority over intercollegiate athletics shall…
4. Prevent an institution from compensating a student-athlete for the use of his name, image, or likeness; or…”
The House preliminary settlement would prohibit colleges from paying athletes a combination of NIL money and other pay that exceeds 22% of the average Power colleges athletic revenue. But Virginia’s new law already gives the state’s colleges the freedom to pay their athletes NIL money that align with their budgets, which could be 33%, 40% or some other amount of such athletic revenue. Virginia college coaches discussed how they are planning to use their new law to better compete against other colleges, and colleges in other states are incentivized to take similar measures due to market competition.
In short, the settlement for this lawsuit was filed in 2020 (before college athlete NIL) and is completely out of touch with college athletes’ NIL freedoms and economic realities in 2024. The court should not allow parties to use a settlement to stifle these existing, valuable athlete NIL marketplaces.
The NCPA also points out that the settlement would run counter to the many state NIL laws guaranteeing athletes the freedom to earn NIL without interference or punishment from the NCAA, conferences, and colleges. The courts should not interfere with states’ public policy decisions to protect their athletes from the NCAA and conferences.
“This is an unjust settlement that would not only harm current athletes but future college athletes who are only in 4thgrade. It could even affect children who aren’t even born yet because the lawyers can agree to extend the terms of this settlement without limits. The NCPA will work to get this settlement rejected so that parties can come up with a fair settlement or go to trial,” stated Huma.
Any Division I college athlete that does not agree with this settlement should visit this NCPA web page for information to receive information and how to help make sure that this settlement is rejected.