💰 Industry shaping news happened over the past week, as the NCAA board of governors and the Power Five conferences have approved a historic settlement that, pending legal review and judge approval, will end “amateurism” as we know it and usher in a new era of college athletics where student athletes are paid by the schools.
There are still way more questions than answers and a lot to figure out, but the one fundamental thing that has been agreed upon with this settlement: the notion of “amateurism,” the much maligned, 100+ year bedrock of the current college sports system that has long been guarded by the NCAA and other college administrators, is dead.
In its place, there is a framework for $2.8 billion in backpay to former athletes for lost compensation plus a revenue sharing agreement on up to $20 million per year for future players. If approved, this new framework would be implemented by 2025.
🧠 My three takeaways from the deal:
- This proposed system is a net positive, but it will only deepen the chasm between the “have’s and the “have not’s.”
- The settlement doesn’t provide a real solution for NIL collectives, and they are unfortunately going to continue to operate mostly as is, for now.
- Private Equity is going to fill the void for these schools in need of salary cap funding, and it likely paves the way for the privatization of athletic departments
🔥There is still much to be sorted out with this new system. I have three burning questions about the deal. Time will tell how these shake out.
- Does this new world run afoul of Title IX?
- Will student athletes keep going and push to be student athletes?
- Will Congress finally step in and create a national standard?
Interested in learning more? Check out this week's Sports Business Playbook 👇
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