OPINION|

If you follow Division I college athletics and/or are interested in the Missouri State University Bears athletic teams, fasten your seat belts. It’s going to be a bumpy ride.

Are you familiar with the House v. NCAA lawsuit and the settlement agreement? House, as it is known, is one of four reasons NCAA Division I athletics is undergoing a profound shift of its organization and business model. The other three reasons are: conference realignment, the transfer portal for athletes, and NIL (Name, Image, Likeness) income for athletes.

SPOILER ALERT: Navigating all of this is as complicated as it is important. Further, while each has significant challenges, it is the intersection of revenue-sharing, NIL, and the transfer portal that keeps university presidents and athletic directors up at night.

House v. NCAA lawsuit and settlement

This House lawsuit was brought in 2020 by former Arizona State swimmer Grant House and former Texas Christian University basketball player Sedona Prince against the NCAA and the power conferences: Big 10, SEC, Pac-12, ACC and Big 12. Other plaintiffs have been added along the way. Northern District of California Judge Claudia Wilken is waiting for one final element before she rules on a negotiated settlement. A good summary may be found here.

Here are some of the key elements of the proposed settlement:

Damages – $2.8 billion would be distributed to Division I athletes who couldn’t earn NIL money prior to the NCAA rule change in 2021. Some institutions have already begun taking steps in anticipation of this.

Revenue-sharing – For the first time, schools would be allowed to share a portion of their athletic department revenue with athletes over the next 10 years. The maximum distributed by any one school is set at $20.5 million, which will increase over time. Schools can participate in the revenue-sharing or not; share among all sports or some; and share among all athletes or just some. While the estimates assume sharing 22 percent of revenue, the exact percentage is voluntary — it is not a requirement, it is not a minimum, and it is not a maximum. Estimates of revenue-sharing are available here.

NIL Clearinghouse – The NCAA would establish a clearinghouse for NIL deals, with the NCAA having the ability to reject “pay for play” deals.

Roster Limits – The settlement would eliminate scholarship limits, but impose roster limits. This is the final piece before the judge rules on the settlement.

Conference realignment

The first major conference change came in 1996 when the Southwest Conference dissolved. Realignment has accelerated since then, creating a handful of super conferences. A good example is the Big 10 Conference. The last time it had 10 members was in 1989. Today, it has 18 members and should be called the “Sea To Shining Sea Conference” since it includes teams from Oregon, Washington and California to New Jersey and Maryland.

The Big 10 Conference now includes 18 schools (west to east): Washington, Oregon, USC, UCLA, Nebraska, Minnesota, Iowa, Wisconsin, Northwestern, Illinois, Michigan State, Michigan, Pursue, Indiana, Ohio State, Penn State, Maryland and Rutgers.. (Photo from Wikipedia Commons)

Transfer portal

The transfer portal was launched in 2018 as an organized way for athletes to move from one school to another. The portal picked up steam in 2023 when the NCAA ruled athletes could transfer and become immediately eligible, provided they met minimal academic requirements. Further, the new rule does not limit the number of times an athlete can transfer. It is the NCAA version of free agency.

Name, Image, Likeness (NIL)

NIL started in 2021, initially affecting football and men’s and women’s basketball, but since has expanded to most other sports. The NIL money is in addition to any scholarships athletes receive and it will be in addition to any revenue-sharing funds the athletes receive in the future. Supposedly, NIL is prohibited from being used for recruiting, However, not everyone buys that (pun intended). Former Auburn, NBA star and now sports commentator Charles Barkley has been quoted saying NIL has created a bidding war that is unsustainable and that not all schools can compete financially. Consider two examples:

• Colorado quarterback Shedeur Sanders was drafted by the Cleveland Browns. He is expected to get a four-year deal worth $4.6 million. His NIL valuation was estimated at $6.5 million.

Colorado quarterback Shedeur Sanders is going to the NFL rather than return to college for potentially more money. (Photo courtesy University of Colorado)

Rules, Laws, Accountability, Oversight, Enforcement – Barkley has reportedly called the NCAA’s handling of NIL “idiotic.” There are no national standards and no one group has oversight responsibility. In states with no oversight, the NCAA has universities write policies for their own athletes. Some state legislatures have started passing laws about NIL, but those laws are inconsistent. The federal government is now looking at NIL. There seems to be two overriding goals regarding NIL: it should not be used as a recruitment tool and schools should not compensate students directly.

Transparency, Limits and Fairness – many schools claim the details of NIL agreements are confidential, protected like other student records, causing some state legislatures to pass laws making the agreements public. So far, there are no limits on the amount of NIL money an athlete can receive, another topic for discussion.

Tax Implications – there are questions regarding taxes. What are the tax liabilities for the athletes, the individual donors, and the corporate donors?

Athletes are allowed to hire professionals to help them navigate NIL; many schools offer training and resources to athletes directly; and many have added NIL coordinators to their staffs. Most colleges have policies that require athletes to report the details of their deals to their schools, and some must get school approval before signing. Several schools reserve the right to keep their athletes from advertising certain products, like drugs and alcohol.

One thing the NCAA wants to avoid is for athletes to be categorized as employees, which could mean paying benefits and worker’s compensation as well as the potential for unions and collective bargaining.

At this point there are more questions than answers, both with revenue-sharing and NIL, which is probably why so many college administrators and coaches are hesitant to talk about it.

Next week, in Part Two that will be published June 7, I identify the additional challenges facing Missouri State University and compare the current situation to my own experiences 50 years ago.