The House Always…Settles? – A New Horizon in College Sports

What to know about the landmark decision.

Name, image, and likeness, NIL. Those three letters, which used to stand for national letter of intent in college sports, completely upended college athletics just a few years ago. Now, rather than three letters there’s one word that is rocking the college athletics world. House. Well, it’s actually the House settlement, but you get the idea. This past Friday, a U.S. District Court Judge signed off on a settlement in a longstanding dispute between current and former college athletes and the NCAA. You can read an excellent article on this over at Sportico which covers the intersection of the law and sports. It’s a great site with a lot of great content. I’d recommend heading there often with this new world we are in.

So, what does this all mean for your favorite college sports? Well, there’s a few rather important points that everyone should be aware of going forward.

• Revenue sharing is here. Colleges who are a part of the settlement, the Ivy League has opted out, will be allowed to share up to $20.5 million per year with their athletes. Think of this as the salary cap from your favorite professional league. Teams can spend under this of course, but they cannot go over it. No luxury tax or anything else here. This appears to be a hard salary cap.
• Scholarship limits? A thing of the past. Due to some last minute haggling between the parties it was ultimately determined to scrap scholarship limits. How will this work out exactly? It’s not as if Purdue basketball could take 20 scholarship guys and have it work out. You can’t really keep 13 scholarship players happy, how would you keep 20 happy? This seems to be most impactful for football where the scholarship limit often meant having only a limited number of players at each position. Now? It could become a part of a strategy to stock up on certain high value and injury prone positions. Maybe? This one needs time to marinate before we get a grasp on it.
• New NIL regulations are finally here. Starting June 7th, so this week, any NIL deal that is over $600 will face independent review by what is being dubbed an NIL clearinghouse. This is essentially a way to ensure that players aren’t getting (for example) $500K to go to one autograph signing. They are wanting this to be a way to level the playing field and stop the shoveling of money for essentially no show jobs, but much like the scholarship limits, there’s a lot here that needs worked out.
• There will also be a pool of money, reported to be around $2.8 billion over 10 years for athletes from the past 8 years who were not being paid. Like much of this settlement there are still questions about how this will work.

So what does this all mean for Purdue? Well, the athletic department put out a statement this week to let us know.

The fund for past athletes will likely result in reduced NCAA payouts for member schools which Purdue estimates to be around a loss of $1.2 million per year for 10 years. Other than that, they want you to give more money. It’s really that simple.

If you know anything about the world of business or the world of athletics you know that their finances can be a bit of a shell game. No sports owner is ever making money on their team, they can never afford a new stadium, and they always have to raise ticket and concession prices just to break even. Now, if you believe all that I’ve got ocean front property in Idaho to sell you. I don’t pretend to know Purdue’s finances but I know that the large increase in TV revenue will come at the perfect time as Purdue looks to adapt to this new world.

Overall, I think this will be a good thing for the athletes and a good thing for a school like Purdue. Evening the playing field with a salary cap should make it easier to compete with the blue blood football schools, assuming that the NIL clearinghouse actually does what it’s intended to do. Could I be wrong? Of course I could. I could easily see a world where this exacerbates the haves and have nots and Purdue falls further behind. Only time will tell.