The House vs. NCAA settlement is finally approved, and college football’s operating structure is forever transformed.
Schools will pay athletes directly with most Power Four football programs expected to distribute at least $14-16 million annually. There are new roster caps. There’s now a clearinghouse responsible for determining fair market value with NIL deals.
The changes are designed with the intent to bring stability and circumvent future lawsuits. So, no more chaos, right?
Right …?
RIGHT!?
The bad news
If you believe that I have some oceanfront property in Arizona that you can get for a great deal. College athletics may be entering a new era, but the same issues that have caused anarchy in college football over the last half decade are foundational elements of the sport’s governing structure.
The NCAA still lacks an anti-trust exemption.
The NCAA nor its member schools collectively bargain with their athletes.
Lacking one or both of those elements means any changes that come with House are stopgap measures — flimsy walls constructed to stem a tide of change that continues to erode the old structure of the sport.
“All these rules are … very arbitrary and are not bargained with the players,” said Darren Heitner, a sports attorney with a large presence in the NIL space. “Until the NCAA decides to treat the players as employees or a unit to bargain with, they’re going to be stuck with challenges on their anti-trust law.”
I’ll see you in court
Remember, those lawsuits — from states and athletes alike — are the mechanisms that pushed the NCAA further and further away from its amateurism North Star.
The NCAA didn’t allow athletes to make money off their name, image and likeness. So, California passed a law that made it legal for colleges in that state to pay their athletes. That piece of legislation set off dominoes nationally and eventually forced the NCAA to adopt similar rules.
When the NCAA attempted to enforce its rules surrounding NIL — like boosters striking a deal with an athlete or a collective negotiating with an athlete before he enrolled — a state government once again enacted pressure.
Tennessee’s attorney general sued on behalf of the Nico Iamaleava and the Vols, who were under NCAA investigation for rule violations dating back to Iamaleava’s recruitment. That suit was successful and essentially broke the NCAA’s NIL enforcement mechanism, rendering the association almost powerless to control the obvious rule breaking that continues to occur.
Athletes pushed the NCAA through the courts, too.
Lawsuits shifted the NCAA’s transfer rules, creating an environment where players can change schools as often as they’d like in their careers. Challenges to the NCAA’s eligibility rules from those like Diego Pavia have shattered the NCAA’s long-held stance that players only receive four seasons of eligibility across five total years.
Legislation aimed at the NCAA’s potential anti-trust violations has been successful again and again this decade.
The House Settlement isn’t going to stop athletes from attempting to force change in the courtroom.
The House Settlement puts an annual cap on how much schools can pay their athletes via revenue sharing. The settlement also attempts to dictate who determines fair market value on NIL deals. Athletes will almost assuredly test those restrictions in court.
“There will definitely be more lawsuits on that issue,” said attorney Mit Winter, a lawyer who works heavily in the NIL space. “The rules that are coming out of the House Settlement don’t have any anti-trust protections.”
It only takes one desperate school to push the boundaries of fair market value. If you don’t think a school will get creative — i.e. break the rules — to find an extra $500,000 for a five-star recruit, you are probably one of those people who believes wads of cash show up in a McDonald’s bag during a recruiting trip by accident.
Schools do whatever it takes to get an edge. If their mechanism for landing a high-profile recruit is limited by a pseudo salary cap, you can bet a lawsuit won’t be far behind attempting to bust that rule.
The NCAA doesn’t have an anti-trust exemption that protects it from those challenges. Artificially placing a cap on someone’s salary is generally considered anti-competitive in America. That won’t change under the rules of the House Settlement even if a governor on compensation makes sense for the overall competitiveness of the sport.
In fact, several states, like Tennessee and New Jersey, have enacted state laws that prevent the NCAA from penalizing its schools for paying NIL to its athletes.
Eligibility lawsuits won’t stop either. Even if the NCAA at some point allows players five full seasons of eligibility, what prevents a player who just had his eligibility expire under the old rules to sue for the ability to return to the sport for another year?
There will be probable challenges on the grounds of Title IX, especially when you consider the large majority of schools participating in the House Settlement will funnel the majority of their rev share money to men’s sports.
That’s the thing about the House Settlement. Yes, it transforms the way college athletics operates and pushes it toward a near professional model. But the key word there is “near.” The NCAA is still operating a business based on the principle that its labor force isn’t technically labor. Athletes are not employees of the school. They lack the ability to collectively bargain.
The House Settlement does nothing to change that. If anything, it might embolden further challenges to the rules given how successful that strategy has proven over the last few years.
Read the full article here