Joel Klatt breaks down changes to NIL, collectives after House settlement

The NCAA has seen a whirlwind of changes this past month following the settlement of three antitrust cases in the House vs. NCAA case. Earlier this month, FOX Sports’ Joel Klatt broke down the impact these changes will have on the NCAA landscape.

“Now, the money that the schools are just going to pay the players will come from a revenue share,” Klatt said. “It can be on the books of the university’s athletic department budget, which is I think a good thing. It also, by the way, increases that budget for almost every school involved. So, now they can go upwards—and you hear different numbers—but it’s somewhere between 19 and $25 million annually that a school can, if they want, allot to the players in a true pay for play.

“They can say, ‘Hey, you’re gonna be the starting quarterback at our school and you’re gonna make however many hundreds of thousands of dollars because of that,’ and it’s pay for play. That revenue sharing model I believe is good. It is a good thing because it brings what was in the shadows into the light.”

Before this change, players and agents could use the mystery surrounding NIL to pit schools against one another. They could claim one school was offering them an exaggerated figure to force the other school to improve its offer.

Klatt believes the new model will eliminate this practice, keeping finances over the table. While this change will take away one method players use to increase their pay, Klatt believes it will benefit the players in the long run.

How will NIL collectives be affected by revenue sharing?

In his explanation, Klatt also addressed how NIL collectives will be affected by the settlements.

“Rather than just being a collective for NIL, now a collective is going to have to work as a true marketing arm of the university and of those student athletes,” Klatt said. “What’s not going to go away is a player’s ability to go enter into an agreement with you name the company, and do a deal for their true market value for their name image and likeness. So when you have Caleb Williams, he can go get a Dr. Pepper deal.

“Now, the university can help them with that and the collective is a marketing arm. The reason that that is better is because now those dollars are—one—more trackable and—two—I think you get away from one school’s ability to just buy players over another school. So now you’re starting to even out the budget that every school is going to compete with.”