NCAA Settlement and Implications for NCAA D1 Wrestling

[steamboat_charlie]

I haven't seen this discussed in depth here (I could have missed it), and I view this as a potential seismic event in terms of future implications for the collegiate athletics landscape.  I'll do my best to summarize below.  Disclaimer: I'm not a lawyer.  

What are the facts?

• Two weeks ago, the NCAA and its P5 conferences (Big 10, Big 12, ACC, SEC, Pac 12) agreed upon terms for a settlement to pay approximately $2.8 billion in back-pay to student athletes that competed between 2017 - 2020, a period during which NIL payments were still prohibited.  
• While an agreement was reached, the settlement hasn't yet been accepted by the federal judge.  This should take place in the next several months.
• The $2.8 billion will be paid over a 10 year period.
• About 40% of the settlement will be paid by the NCAA itself.  Power five conference members will pay about 24%.  The remaining 35% will be paid by non-P5 schools.  
• The settlement will largely be funded by NCAA withholding revenue distributions (primarily from NCAA basketball tournament revenue) from its member institutions.  
• While the majority of P5 institutions voted to accept the terms of the proposed agreement, many institutions were not in favor--notably, many SEC institutions.  
• In addition to the monetary back-pay settlement, this proposed agreement would provide a framework for universities to share revenue with their players. 
• Revenue sharing in the proposed agreement would be permitted up to approximately $20 Million, representing approximately 22% of revenue for an average P5 institution.  
• Allocation of shared revenue will be at the discretion of each member institution (i.e. each school can decide who they want to pay, and how much). 
• Additionally, scholarship limits will be removed whole-sale, and replaced with roster limits.  
• If everything is approved on a reasonable timeline, this would take effect as early as Fall 2025.  

What remains unknown?

• While terms have been agreed upon, there still isn't an official agreement in place for the judge to review. 
• Even once there is, there will still be a several month review process and there is no guarantee that this judge will approve the agreement.  While there is a feeling from many that it will be improved, rejection is a possibility.
• Schools paying student athletes directly throws gasoline onto an already lit fire with regard to athletes' treatment as employees by universities.
• There are multiple outstanding cases regarding this topic, and the ability for student athletes to unionize, and consequently, collectively bargain with their universities. 
• Despite the particulars of revenue sharing being left to institutions individually, each school is still subject to Title IX regulation. 
• Are schools within their rights to pay players on a percentage basis based on program revenues, or do these payments need to be distributed equitably across men's and women's programs?  It's easy to speculate how an institution paying $19 million of their $20 million limit to football players could open themselves up to serious litigation risk with respect to Title IX.  
• This would not "take the place" of NIL.  However, the future of NIL funding and collectives is completely unclear.  Would some funding currently directed toward NIL efforts be shifted to the athletic program itself?  Will schools competing at the top level in football treat this as a soft cap and use NIL to incentivize players above and beyond the $20 million?  Seems likely.  

My take: implications for NCAA D1 wrestling

• The $2.8 billion back-pay obligation is not a major issue for wrestling.  The settlement is to be paid out over 10 years and split across all member institutions.  The most any school will be "paying" on an annual basis is <$3 million.  When we're talking about a majority of P5 institutions with annual budgets north of $100 million, it's not exactly a rounding error, but it does feel manageable.  
• Most university presidents were happy to jump at a settlement they they could wrap their arms around that maintains some semblance of the status quo, in an effort to put a stay on the potential hundreds of additional lawsuits that might be brought against them on this matter.  If this were to continue in the court system there is/was a non-zero chance of a significantly larger settlement, of a magnitude that would simply crush the NCAA--some presidents were in favor of simply letting it burn down, but most are just happy to kick the can down the road for 10 years and let someone else deal with it when the time comes. 
• The real issue for wrestling is not the payment itself, but rather the future payment of athletes.  Tightening the athletics budget by a couple million dollars doesn't upset the apple cart.  However, tightening it by ~$20 million (if ~$20 million is going to be paid to football and basketball players) is a major, major problem. 
• Athletic departments are going to have to make some very difficult decisions.  Some departments are simply going to say, "No--we can't afford to pay players and we're not going to try to compete with the universities that can."  This is actually a better scenario for wrestling at those institutions.  
• The schools to watch for are the schools that are going to try to compete with the big boys by spending up to their limit, but don't have the same financial flexibility.   
• It's hard for me to imagine any of the ~$20 million revenue share will find its way into the pockets of wrestlers, unless a school decides to make an equal flat payment to all athletes.  
• The removal of scholarship limits will only serve to further increase the gap between the haves and have nots in D1 wrestling, and continues the current trend of the NIL era.   
• If this goes through as presently envisioned, there are going to be D1 sports programs eliminated from MANY universities.  When programs are getting put on the chopping block, I think we all know wrestling is one of the first names mentioned.  

Edited June 5 by steamboat_charlie

[juniorvarsity]

Ttal NCAA athletes by school and the payout per athlete based on $20M shares annually back to athletes:

Iowa, Nebraska, Penn State- 800 athletes - $25k

Ohio State, Michigan - 1000 athletes - $20k

Missouri - 550 athletes - $36k 

All are ballpark numbers and Google. Still, interesting to look at. You would need to cut a lot of sports to grow that number. I am going to guess title XI will not allow the money to go to just football and basketball. 

[fishbane]

15 hours ago, steamboat_charlie said:

 

• Are schools within their rights to pay players on a percentage basis based on program revenues, or do these payments need to be distributed equitably across men's and women's programs?  It's easy to speculate how an institution paying $19 million of their $20 million limit to football players could open themselves up to serious litigation risk with respect to Title IX.  

There will be a lawsuit regardless.  There is a fairly widely held belief that the opportunities must balance or at least be proportional to the makeup of the student body to pass title IX muster and that the payments to athletes could be proportional to revenue.  I'd be surprised if any power 5 school pays the women's athletic staff as much as the men's.   Schools are free to pay based on ability, experience, knowledge, and economic value for these positions why would it require the opposite for players?

It seems likely that at least some schools will take this interpretation and run with it. This in turn makes it more likely for others to follow suit since that would put them at a disadvantage recruiting athletes to revenue sports.  

On the other hand making a flat payment to all athletes regardless of sport/revenue probably gets another antitrust lawsuit. It would seem to deny athletes in revenue sports from making their true worth in the market. Another lawsuit is inevitable regarding this, so I'd imagine administrators will likely choose to take the path that doesn't put them at a competitive disadvantage in the sports that are most important to their institution.