Even if a federal judge approves the settlement of the House v. NCAA antitrust lawsuit — and there’s no guarantee it will — conference commissioners and athletic directors won’t sleep well because the agreement raises more questions than it answers about the future of college sports.
“We don’t know what unintended consequences this will have,” one small conference commissioner told me, speaking on the condition of anonymity due to the sensitivity of the issue. “Will all of those things — the caps on institutions and scholarships — go away because universities can now cover those costs? At the Power 5 level, this is probably OK. The Group of 5 is probably in the middle. And the lower-level DIs that get revenue from DI basketball are going to have to withhold some. They’re the ones that are going to be hit the hardest by this.”
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Since the House lawsuit was filed, the focus has been primarily on its impact on the major conferences and, to a lesser extent, the Group of 5. Little attention seems to have been paid to mid-tier and lower-tier DI schools, where some administrators and executives believe they have only three options to deal with the loss of revenue resulting from the $2.8 billion settlement: 1) find a way to make up the funds, 2) cut programs to make up for the lost funding, or 3) demote the division.
The latter is already being discussed among some athletic directors who fear what the new world order may bring, according to an athletic director at a small school who has knowledge of the private conversations.
“There’s a big difference financially between running an athletic department in the Big West Conference or West Coast Conference and running a high-level Division II department,” said an AD who spoke on the condition of anonymity. “The difference is in scholarships, scholarship equivalents, paying coaches, facilities fees, administrative fees. There’s a big difference. So if we stay in DI and have a shot, where are we going to make up for the loss in revenue? Talent is drying up. Donors? We’re exhausted, but we have to rely on them anyway.”
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According to the terms of the House settlement: AthleticFormer DI players will receive at least $2.75 billion in unpaid wage damages over 10 years. The NCAA will foot about 41% of that total, or $1.2 billion from its reserves, while the powerhouse conferences will foot about 24% through withholding of future revenues, with the Group of 5 accounting for about 10%, FCS schools about 13% and non-football DI schools about 12%.
sent to member schools, AthleticNCAA President Charlie Baker acknowledged that smaller colleges, while not the focus of the House lawsuit, could be hit harder, adding, “We understand this change will not be easy to manage, but given the challenges college sports have faced over the past few decades, change is inevitable.”
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Some have argued that small schools are part of the same exploitative system as high-profile programs, but that’s not an approximation, as many of the current lawsuits directly relate to student-athletes from powerhouse conferences not receiving financial compensation despite bringing in millions, and in some cases billions, of dollars in revenue. If the proposed new system seems like a kind of economic Darwinism, that’s exactly what it is. Baker can express sympathy for small schools, but his loyalty is to the powerhouse conferences that drive the big broadcasting rights deals. He knows that it will be much easier for Ohio State or Alabama to make up lost revenue, even if it’s projected at $2 million a year, than it will be for schools like the Group of Five, whose paths to solvency are longer and more difficult.
“The cuts could be upwards of $500,000 a year for the Group of Five,” the conference commissioner told me. “Look at California State University or Mountain West colleges. Even for San Diego State, that’s a huge amount of money. You go even further and it’s $175,000 to $200,000 a year for mid-tier universities. That’s a lot of money for them. It’s very concerning.”
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The problem is that the House lawsuit, which incorporates two other antitrust cases, isn’t the biggest concern for some conference executives. That concern is Johnson v. NCAA, which argues that student-athletes should be classified as employees under the Fair Labor Standards Act (FLSA) and be eligible for minimum wage and overtime pay. Depending on the outcome of that case, it could formally eliminate the outdated notion of amateurism at the collegiate level and pave the way for athletes to unionize and collectively bargain for working conditions.
“If that were to happen, it would eliminate many athletic departments outside of the Power 5, including at the Division I level,” the commissioner said.
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Sources involved in the meetings and negotiations between the broadcast networks echoed similar sentiments.
“There have been rumors for years that the amateur model is unsustainable and that money and greed have become too big,” said one person, speaking on condition of anonymity because he was not authorized to comment on the situation. “You have universities that preach amateurism but pay coaches millions of dollars to essentially maintain unpaid labor. At the FCS level, no university is making money from sports, so they will start cutting programs.”
Selective or all-out. Or relegated to a lower division. Or eliminated athletics. Period. Higher education is already facing budget problems. Last week, Birmingham-Southern College closed permanently while its baseball team was playing in the NCAA Division III World Series. Is this a sign of things to come? Maybe not, but there’s no doubt that realignment as we know it will take on new and dramatic meaning in the coming years.
It is sad but expected that smaller colleges are forced to pay a disproportionate price for the sins of larger universities.
(Photo of NCAA President Charlie Baker (right) and SEC Commissioner Greg Sankey by Andy Lyons/Getty Images)
