Conference Realignment, G5 Rev Share & Former Athletes Arguing for NIL $ | NIL Blitz: Jul. 2 - Jul. 7
Welcome to the 45th installation of the Blitz, NIL-ers!
Today's edition is brought to you in a classic "Who, What, When, Where and How" fashion, tackling the five topics of notoriety from last week. Go have at it!
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1. Who's Going to Rev Share? 🤝
It sounds like a lot more schools than initially expected.
We've had the fortune of speaking with dozens of partner schools over the past few months as this conversation has grown, and I can honestly say the number of schools who have mentioned (in confidence) they will be participating is surprising. Not every AD has gotten out in front of it and shared it like TCU and others have, but Utah State's Diana Sabau made it clear the Aggies would work towards it.
“Absolutely, we will get there. I think we will get there perhaps a little bit slower, or a more thought out process, than the Power Five. It would be easy for them to dip into some coffers to get it started. You know, we don’t have a lot of reserves. We don’t have that financial fund just ready to go. Every day we eat what we can kill, and we have to do a better job of having more reserves, so that we can plan for that.”
There was an early perception that a "fault line" would be drawn at the Group of 5 level, with some schools opting out of revenue sharing to cite the undoubted financial strain. But as more G5's like Utah State (ranked 68th among public FBS programs in 2022-23 Total Operating Revenues) pledge to establish rev share programs, the greater the snowball effect. I wouldn't be surprised if this comment alone could force the entire Mountain West into participating.
Even though $22M is the suggested limit, we will have to wait several weeks before terms of the preliminary approval could leak, followed by several months of waiting during the objection (and possible appeal) process. Why I bring this up is the ceiling ($22M) is appearing more firm but a floor (minimum requirement for revenue sharing) has yet to be divulged, if one even exists.
It would certainly appear that making a choice not to revenue share would go against the spirit of the settlement (and could wind the defendants back up in the same place they started). If you remember back to last December, NCAA President Charlie Baker's model, affectionately known as "Project DI", did include a concept of a "floor" which would be set at >$30K in a trust fund for >50% of student-athletes. All this to say, the $5M-$7M annual expenses could be a range that schools who are less-apt to jump on the Rev Share train may try to resort to.
At the end of the day, this reminds me of Alston payments x10. Each school is going to make their own decision based on their finances, the temperature of their conference, and competitive risk tolerance, to name a few factors. As with Alston, some conferences made a decision that members would fully participate and some schools made the choice to implement partial payments in the beginning. Keep your eyes out for more "plans" to be revealed.
2. What is Happening to that College Sports Bill in DC? 🏛
Remember that one bill that got a lot of attention a month ago for actually progressing through in Congress? Well, it's moving again. (A little bit.)
H.R. 8534, titled the "Protecting Student Athletes’ Economic Freedom Act of 2024" was placed on the Union Calendar last Friday for future action. The draft of the bill has all but boiled down to a "don't let college athletes be deemed employees" blockade - which is precisely what the NCAA and Power Conferences are looking for.
Call it what you want, but while the next action for the bill isn't prescribed it is expected to occur soon in July or later in September to accommodate for the Congressional calendar.
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3. When Could We See Capped NIL Payments? 🔝
Depends on who you ask, but there may be an appetite in the American Athletic Conference for this approach. Freshly minted AAC commissioner, Tim Pernetti, mentioned the following to a local Memphis news outlet RE: revenue sharing and institutional NIL payments.
"Everybody has their own point of view. I think some institutions in our conference are resourced in different ways than others. What we want to try to avoid is creating competition and gaps in our own league. For instance, and I'm just throwing it out there, the idea of us discussing as a membership, which I think we will, the prospect of revenue sharing within our conference. And should we have an agreed-upon conference cap for revenue sharing to try to create as much of a level playing field as we possible can. Nothing's off the table on that front."
I would second the comments of Extra Points' Matt Brown who notes this certainly is an "idea" and "not the signed and notarized official opinion of AAC presidents." But it still makes it interesting to consider!
This is in the same vein as the first topic of today's Blitz where we established that a floor could be an useful dimension of this solution to create what Pernetti describes to be a "level playing field". A "tiered-cap" within the $22M "cap" is not a foreign concept either, as California's revenue sharing bill from last summer attempted to introduce tiering proportional to a school's revenue. (I think there are some people who might've preferred that to the proposed settlement solution of today.)
While I'm not going to be one to take this unbaked concept for truth for the future of the AAC, I do think we have a few truths to look at if it were to play out:
4. Where is the Line Drawn with Former Athletes Suing the NCAA? 🏀
This is a great question to ask your friendly neighborhood sports lawyer. Over the past month, rumblings from two groups of former basketball players arose over their historical appearances in highlights during March Madness.
First, the 1983 NC State title team (aka Jimmy V's "Cardiac Pack") sued the NCAA claiming their marketability does not end upon graduation. This suit was followed by a conglomerate of more recent former athletes, including KU's Mario Chalmers, claiming the NCAA, Power Conferences, and Turner Sports do not have the right to use their NIL for free in March Madness broadcasts.
Time is the most curious dimension in both of these as they more or less represent historical versions of the House case as House has a bookend of June 15, 2016. A probable defense argument over the statute of limitations and/or First Amendment protection for use of newsworthy events is expected, but this current climate appears to have more appetite towards challenges to the Association.
Again, a better question for you to ask to your attorney of choice but arguably a pair of cases which could heighten to House level damages.
5. How Conference Realignment Impacts the NIL Market 🔄
Short and sweet, last week was the beginning of the great migration across Power Conferences. You're likely aware by now of the instant conference classics between UCLA and Rutgers, but I want to add some NIL context to this - the change in scenery for the schools in motion this year will actualize in an estimated 19% change in NIL dollars.
In other words, no matter which Power Conference you belong to, you are going to see a noticeable spike (or plummeting) of NIL compensation across your peers. For nationally-recruiting programs, this may not have the same "feel" but for those who fight tooth-and-nail among their longtime rivals this will set a new standard.
It also signifies a changing of the guard for many conferences' "premiere NIL schools" who either left for greener grass or have to welcome someone with bigger pockets.
Read more on Conference Realignment in NIL AT 3: The Annual Opendorse Report.
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Thanks for reading - holler with questions!