NASHVILLE, Tenn. — As the NCAA Board of Governors entered the third hour of its meeting Thursday evening, the phones of college sports executives at the gathering began buzzing.
Texts. Emails. Calls.
As some of the most powerful executives in college sports gathered here to close the NCAA’s annual convention this week, the Department of Education’s Office for Civil Rights released some jaw-dropping news that, if confirmed, could completely change the way many schools think about paying their athletes in the future world of college sports revenue sharing.
The department released much-anticipated guidance related to Title IX: Schools’ revenue-sharing payments to athletes must be distributed “proportionately” to male and female athletes, or institutions risk violating Title IX, the decades-old federal law. 53 years requiring that universities receive federal funding to provide equal benefits to female and male athletes.
“That’s one way to drop a bomb, huh?” “” murmured a university executive leaving the meeting room.
In the final days of President Joe Biden’s administration, the Department of Education’s nine-page guidance released Thursday serves as an eleventh-hour salvo to many Power Conference schools’ plans to distribute the majority of their pool of revenue sharing – 80% plus – to football and men’s basketball teams.
As part of the NCAA and Power conferences Historic settlement agreement in the Houseschools are allowed starting July 1 to distribute at least $20.5 million annually to athletes under an escalating, capped compensation system. Most schools determine their distribution method based on a sport’s revenue generation and/or the back injury distribution method announced by the House plaintiffs’ attorneys.
In both cases, football and men’s basketball are expected to receive a significant share of the revenue. According to those familiar with the matter, several schools plan to spend as much as 85 percent of $20.5 million in revenue on their football team — a clear violation of federal Title IX guidelines released Thursday.
However, the document is not a regulation but only guidance. Even more significant is the imminent change in the presidential administration, with the replacement of a Democratic leader by a Republican, a major change that has profound and far-reaching impacts on the future of college sports.
President-elect Donald Trump, who is scheduled to be sworn in Monday, has the authority to replace leaders of the Department of Education and rescind or modify orders and directives issued by the entity – a common move when there is a change of party within the executive branch and something that happened. when Trump succeeded Democratic President Barack Obama in 2016.
Trump’s nominee to head the Department of Education is Linda McMahon, the ex-wife of WWE founder Vince McMahon and administrator of the Small Business Administration under Trump from 2017 to 2019.
Asked about a new administration reversing the guidelines, NCAA President Charlie Baker, a former governor, said, “It’s really hard to say. This process usually takes some time due to all the elements associated with turnover in administration. Some things happen right away, some things happen later, and some things don’t change at all.
In the meantime, these guidelines have left many school administrators scrambling to understand what impact the document might have on their revenue sharing strategy.
Thursday’s document was full of critical lines that could raise alarms and prompt changes to many school plans, if the Trump administration doesn’t rescind it. For example, the department classifies future income payments as “financial assistance,” which “must be made available proportionately to male and female athletes.” the document says.
“Schools remain responsible for ensuring that they provide equal athletic opportunities in their athletic programs, including in the NIL context,” the guidance states. “A school may violate Title IX if it fails to provide equivalent benefits, opportunities, and treatment in components of the school’s athletic program related to NIL activities.”
Hundreds, if not thousands, of athletes have already signed revenue sharing agreements with schoolsmost of which are contingent on approval of the settlement in April. These agreements provide for a payment amount that may now be at risk.
Most agreements grant the school non-exclusive rights to the athlete’s name, image and likeness (NIL), allowing companies and brands to connect with athletes but prohibiting other school to do it.
“We need time to read it, digest it and understand it,” said Josh Whitman, an Illinois athletic director who serves on the Board of Governors, the NCAA’s highest governing body. “This whole thing has been an exercise in contingency planning for us. The world has changed many times over the past six months. We’ve been making plans on top of plans for some time now and this is just the most recent example of the need to deliberate new directions and determine what changes, if any, we need to make to the strategy that we have developed.
The NCAA traditionally does not provide guidance to schools regarding Title IX, leaving those decisions to campus officials like Linda Livingstone, Baylor president and chair of the Board of Governors.
“We’re all going to have to go back (to campus) and have a conversation about this and see what we think the implications are for what we’re doing,” she said Thursday.
“Well, we all want to read it. We’re trying to digest it,” said ACC Commissioner Jim Phillips, who is also a board member.
Thursday’s forecast wasn’t terribly shocking to some.
For months now, many Title IX experts have publicly expressed concern about some schools’ lopsided distribution method. One of the nation’s top Title IX attorneys, Arthur Bryant, told Yahoo Sports in the spring that he expected the distributions to immediately trigger Title IX lawsuits, even if schools used the value merchant to justify payments or a third party agency.
“Title IX is not market-based. If the market discriminates, schools can’t,” Bryant said. “The school cannot use a marketing agency to avoid Title IX.”
Even one of the plaintiffs’ attorneys in the case, Jeffrey Kessler, acknowledged last April that the Title IX issue will have to be resolved in the courtroom.
Preparing to share revenue directly with athletes, many schools have closed their booster-powered NIL collectives, the entities that have been funding athlete rosters for three years now.
One of the most shocking parts of the guidelines concerns these entities, targeting zero compensation from certain third parties, particularly those affiliated with boosters: “The fact that funds are provided by a private source does not relieve a school of liability” for Title IX Compliance, he said.
The guidance comes just two weeks before the deadline for filing objections to the House rules — historic deal in which NCAA schools pay former athletes (primarily Power Conference football and men’s basketball players) nearly $2.8 billion in back damage.
However, the second part of the settlement allows schools – but does not require them – to share millions of dollars in revenue with athletes under a capped system. Baker does not believe this guidance will impact the timing of the settlement.
A final hearing is scheduled for April 7 in Judge Claudia Wilken’s California court, coincidentally the day of the NCAA men’s basketball national championship game.