MIRAMAR BEACH, Fla. — Limping down the stairs of the Hilton Sandestin lobby, Auburn University football coach Hugh Freeze shook his head not in disgust but in confusion.
Freeze, who had just finished two days of meetings in this southern Florida region, was digesting information handed out to coaches, including a 17-page document on the NCAA’s landmark settlement agreement and new player compensation model that will soon go into effect.
What did he learn?
“It just means there are more questions than answers,” Freeze joked.
The SEC Management Conference situation is actually very clear in 2024. There are very few answers and very little clarity.
But that doesn’t mean there’s absolutely nothing.
In fact, SEC presidents and chancellors came out of this week’s meeting believing we would soon have more answers about how Title IX will affect revenue distribution to athletes in future compensation models, which is the most important question in this entire situation.
For now, at least, they’re focused on the billions of dollars in damages that plaintiffs’ lawyers will have to distribute to the athletes.
“One of the questions is, are we going to allocate the funds going forward the same way that we’ve allocated the funds going back over the last six years,” asked Georgia State Chancellor Jere Morehead, who serves as chairman of the NCAA’s Division I Board of Governors. “As the settlement moves forward, I’ll be interested to see what proposals the plaintiffs’ attorneys make regarding past damages.”
The settlement, which consolidated three antitrust cases, has two parts. The NCAA and the universities agreed to pay $2.77 billion in damages to athletes over 10 years. The second part of the agreement is a future revenue-sharing initiative that allows universities to pay millions of dollars to athletes under a capped compensation plan.
How plaintiffs’ lawyers split past damage awards in light of Title IX, a federal law that requires educational institutions to provide equal opportunities and benefits to male and female athletes, is emerging as a key factor in how schools will split future revenues, the SEC chairmen said Thursday.
Put most simply, if the plaintiffs’ lawyers in this case have not complied with federal law with past payments, do universities have to comply with Title IX with future payments to athletes?
“They’re going to come out with their plan first,” Texas Gov. Jay Hartzell said. “We’ll see what they think. How are the public going to react? How are the politicians going to react?”
In past interviews, the plaintiffs’ lead lawyers, Jeffrey Kessler and Steve Berman, said they would use an “allocation formula” to distribute the unpaid wages. The details of that formula aren’t entirely clear, but Berman told Yahoo Sports two weeks ago that the lawyers would “follow” information in economic reports prepared by expert witnesses.
According to the report used in legal filings in the case, roughly 90% of the unpaid NIL pay comes from Power Five football and men’s basketball players, specifically from using their NIL on broadcasts and video games, as well as from NIL payments to third parties.
If the reports are correct, more than $2 billion of the nearly $2.8 billion settlement will go to male athletes.
“That’s interesting,” Hartzell said when he heard about the numbers. “It’ll give us a way to gauge the public’s reaction.”
“We’re interested in the outstanding amount. This is a learning opportunity,” SEC Chairman Greg Sankey said.
Those figures do not include legal fees, which are expected to easily exceed $100 million, according to people familiar with the matter.
Upon hearing this, Morehead said, “This is outrageous. This is absolutely outrageous.”
Some conference executives are operating under the notion that revenue needs to be split equally between male and female players to satisfy Title IX, unless the court spells out the issue in a lengthy settlement document currently being drafted, which would mean half of the $20 million to $22 million in cap revenue that schools would be allowed to distribute to athletes would go to the female players.
While Title IX requirements are clear, many in college sports have questioned whether federal law should apply to revenue-sharing models, which often distribute payments based on the market value of players’ name, image and likeness (NIL).
“We have Title IX experts here,” Mississippi State University President Mark Keenum said, “and of course we want to be Title IX compliant. As the settlement documents state, these are NIL payments. How do these payments count under Title IX? There are differing opinions on this.”
One comes from Arthur Bryant, one of Title IX’s most prominent defenders and an attorney who has filed and won multiple Title IX cases against NCAA schools. Bryant believes that schools must comply with Title IX requirements even if the payments are classified as market-based NIL transactions.
“Title IX is not market-based. If the market discriminates, schools can’t discriminate,” he said.
School officials have been hesitant to split the millions of dollars in revenue generated by two sports (football and men’s basketball) at a time when Olympic and women’s sports are costing schools as much as $40 million in losses. Splitting the revenue evenly could expose football players to lawsuits that they aren’t receiving what they deserve for the revenue they generate, said Brian Davis, a California attorney who represents more than 100 football players in the NIL field.
Pay equity through donor-led groups will almost certainly continue to be a way for schools to offer football and men’s basketball players more compensation amid increased competition for players. Already, groups are working to evolve into “marketing agencies” that exist under new compensation models.
But university leaders are confident that a new enforcement agency, potentially backed by the courts and operating outside the NCAA, will have more power to enforce rules about payments to third parties that are not “true NIL.”
“I hope we can all agree that no one can sign a contract that hasn’t been pre-vetted by an independent third party and found to be legitimate,” Morehead said.
Who would that agency be? Would it have the power to issue subpoenas? Can a class even exist? Would schools have to share revenue under Title IX?
As Freeze said as he hurried down the lobby stairs, there were more questions than answers.
“I often use the saying: ‘Tell me the rules and I’ll live by them,'” Kentucky Gov. Eli Capilouto said.
“Well,” he said, “we don’t know the rules.”
