By: Nathan Padbury
September 19, 2024
Photo Credit: The New York Times
In the last couple of decades, the college sports landscape has been uprooted in by court cases, the most recent of which being the House v. NCAA case. In this case, a settlement was reached on May 23rd, 2024. With landmark decisions from O’Bannon v. NCAA (2008) and Alston v. NCAA (2021) setting the groundwork for the player empowerment era of college athletics, the NCAA’s foothold in keeping college sports an amateur endeavor has steadily decreased in the 21st century. Whereas both the O’Bannon and Alston cases dealt with the worth of players’ names, images, and likenesses, the House v. NCAA settlement is the first decision or settlement where the NCAA has made a concession directly related to a more pressing and relevant issue, amateurism and player compensation.
It is important to understand the context of the House settlement and the people within the world of college sports that brought it to life. Former Arizona State swimmer Grant House and former Oregon and TCU basketball player Sedona Prince sued the NCAA on the grounds that barring student-athletes (such as themselves) from profiting off of their name, image, and likenesses was a violation of existing antitrust laws. The House settlement will also settle a collection of other ongoing similar cases against the NCAA, including Hubbard v. NCAA and Carter v. NCAA, which were also pressuring the NCAA in the realm of student-athlete compensation.
But what does the House settlement mean?
In short, athletes who competed from 2016-2021 will be eligible to receive an individual cut of back pay - from a fund of around $2.8 billion - as overdue compensation for their missed opportunities to capitalize on their name, image, and likeness. In the proposed settlement, the scholarship cap for varsity sports would be eliminated, opening the floodgates for the creation of a system where all college athletes are recruited scholarship players. However, many in the college sports industry are most focused on the settlement’s proposal for athletic departments to use up to 22% of their annual budgets to directly compensate student-athletes. This would be a radical change in college sports, representing the first time that student-athletes would be able to be paid by the institutions they represent on the sole basis of their athletic status.
With such a major quake in the status quo of college sports, the immediate future and long-term fallout post-House is impossible to determine. However, we can identify what questions arise and remain from this settlement and what the potential answers may be. For instance, one of the largest questions about the settlement is how athletic departments will allocate their budgets with their newly gained ability to pay their student-athletes. To remain competitive in the recruiting landscape, most schools will most likely utilize the full 22% to pay players. This money will likely come from media rights, which make up the largest percentage of income for almost all major athletic departments.
Another question is how to fairly divide this money between revenue sports, such as football and men’s basketball, and non-revenue sports, such as golf, cross country, etc. One potential solution is to divide athletes into “tiers” based on their respective sports’ visibility, popularity, and revenue generation. However, there are obvious equity issues with this potential solution and individual athletic departments will most likely solve this issue in the way they most see fit for their own campus’ climate.
A major question mark for the NCAA after this settlement is how this impacts their long-standing identity. House marks a stark shift in the college sports landscape and a definitive defeat for the stalwart NCAA, which has been desperately clinging to the protection of amateurism in college sports, even in the face of the rampant progress in players’ rights. As a result, the next few years will be incredibly difficult for the NCAA, likely forcing them to forge a new identity and maintain their relevance (read: profitability) in the college sports sphere.
While questions remain unanswered in the wake of House regarding the future for walk-on athletes, the transfer portal, parity between programs of different sizes, and more, one thing is for certain: American college athletics will undergo a groundbreaking transformation in the years to come.
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