Colleges Can Now Pay Athletes Directly, but Some Aren’t Cheering

DI track and field athlete Sabrina Oostburg isn’t celebrating the recent NCAA settlement, which allows colleges to pay athletes directly.

The Belmont University student said she was standing next to a volleyball player and two football players when the news came out. One of the football players reacted positively and then turned to the volleyball player to get her take.

“It’s good for you because you’re going to get paid, but some of your female athlete friends might get cut,” Oostburg recalled the volleyball player saying.

The recent settlement, which ended multiple antitrust cases against the NCAA, sets up a system in which football players will likely get the lion’s share of the money. The settlement’s back-pay portion, for example, allocates 75% to football, guided by how much revenue the sport brings in.

Colleges that opt into the settlement can pay up to $20.5 million to their athletes for the year starting July 1 (with increases in subsequent years).

“It’s going to be focused on football, basketball,” Craig Weiner, a partner and litigator at Blank Rome, told Business Insider.

While schools are free to distribute the money to different teams as they wish, there is a clear incentive for them to want to remain competitive in football to generate revenue. That could mean some athletic programs — if we take that 75% figure as guidance — will need to cover $15 million in new expenses to pay football players.

Where is the money going to come from? Oostburg said she’s worried about cuts to her team and others that don’t make money for the college. She fears they could lose roster spots, places where they practice and train, or even snacks.

“I think you’re going to see cuts potentially in the non-revenue sports,” Weiner said. “As far as support, athletic facilities, athletic support. Money that is that is earmarked to help the non-revenue producing sports, because they’re going to focus on the money makers.”

The settlement ruling could create Title IX issues

The skew toward football and men’s basketball in the $2.8 billion back-pay part of the settlement has already attracted a legal challenge.

Dan Ain, an attorney at Reavis, Page, Jump, noted that current and former DI female athletes had filed an appeal. They argued that 90% of the back pay going to former football and men’s basketball players was a violation of Title IX, which requires schools to give male and female athletes equitable opportunities.

Ain also pointed out that Judge Claudia Wilken, who oversaw the case, said that athletes could sue if they felt there was any infringement on Title IX due to the nature of the revenue share model.

“This is new territory for schools,” Ain said. “Schools, for the first time, will be deciding how to allocate tens of millions of dollars in revenue share to individual athletes. The expectation right now is that the distribution is going to be grossly unequal between men and women, and that will open schools up to Title IX litigation.”

Athletes have to run their deals through a clearinghouse

Oostburg said she also had concerns about a new clearinghouse that will oversee deals athletes strike on their own with brands, called NIL deals (short for “name, image, and likeness”).

Athletes with deals of over $600 will have to report them to the clearinghouse, operated by Deloitte, which will determine the athlete’s value. If the deal is higher than their assessed value, it can’t go through. Athletes who don’t report deals or violate them by taking something of a different value could have their eligibility taken away.

For athletes like Oostburg in “non-revenue” sports, NIL deals — often driven in part by their social media footprint — are the biggest money-making opportunity.

“That does concern me,” Oostburg said. “If I get a deal over $600 and they decide, no, that doesn’t make sense for someone like a track athlete like me to get a $1,000 deal.”