Under a new NCAA-based plan, major college schools will see a likely increase of over 10% to the pool of funds available to pay students athletes. After the initial deal passed in the aftermath of the House settlement, schools were capped at an initial value of $20.5 million available to distribute to student-athletes as their share of revenues. But the new program should immediately add roughly $2.5 million to most schools’ revenue pool and will likely add even more money later.
School Revenue Money for Athletes
In June, the final settlement of the multiple antitrust suits regarding payment of players was approved. Off of that ruling, a revenue sharing figure was reached based on school ticket sales, media rights, and overall revenue generated. The figure in question capped school contribution to athletes at $20.5 million, with that total slated to grow over the next 10 years.
However, that initial plan allowed schools to reduce that $20.5 million total by up to $2.5 million in new scholarship money that a school offered. Accordingly, as reported by Sports Business Journal, most schools thus implemented that full amount, functionally reducing their total to $18 million.
New Plan Raising Cap on Athlete Payments
The new proposal under consideration would eliminate this $2.5 million provision. In addition, the planned annual increase of the pool should jump funds available by 4% or roughly another $800,000. So while most schools have operated under a functional $18 million cap, under the new proposal, next year those schools will have about $21.3 million to distribute.
Uncertain Division of Funds
While schools have freedom to determine their terms of disbursement of the funds, the court-approved settlement of prior damages allotted 75% of the funds for those claims to football players, 15% to men’s basketball players, and 5% to women’s basketball players, with the other 5% divided based on performance in the remaining sports.
One Case Study on Money Division
Of course, in the NIL era, the school’s direct payments are only a piece of the pie available to student-athletes. For instance, recent reports have the Kentucky men’s basketball roster being compensated at $22 million– which is more than the school’s entire revenue-sharing allotment. Kentucky athletic director Mitch Barnhart had previously indicated that six sports would split the $18.5 million Kentucky distribution, with football presumably the heavy winner.
Given the revelations of the new hikes, the one indisputed fact is that more money should be available for school distribution to student-athletes. While how big of a piece of the overall financial pie it is may vary, the big picture is a positive for student-athletes.