How Judge Claudia Wilken could outline revenue sharing framework in House settlement

LAS VEGAS – In hallways throughout Mandalay Bay last week, the impact and unknown of the impending House settlement dominated conversations at the National Association of Collegiate Directors of Athletics convention.

Panels and hallway conversations were filled with questions and not many answers. The top leaders in college sports don’t know the exact date revenue sharing and the new world order will begin – speculation is the 2025-26 academic year. Meanwhile, others are trying to figure out how much revenue they can share while keeping an athletic department up and running.

Another major question remains: How will revenue actually be split up?

The NCAA and Power 5 conferences voted to sign off on the settlement agreement in May, agreeing to pay $2.77 billion in back damages to athletes over 10 years. The second piece of the agreement is revenue sharing, allowing institutions to pay $20-22 million annually to athletes.

How plaintiff attorneys divide back damages is expected to be how schools approach Title IX and shape a framework for revenue sharing. Steve Berman, the co-lead counsel for plaintiffs in the House case, confirmed to On3 on Monday the settlement is on track to disperse 75% of TV revenue in back damages to football. From there, 15% would be funneled to men’s basketball, 5% to women’s basketball and the final 5% divided by the remaining athletes.

How does Title IX play into House settlement?

As administrators try to figure out how to split up revenue-sharing dollars, if Judge Claudia Wilken ratifies this portion of back damages it’s expected to be looked at as a framework for the future, antitrust attorney Jay M. Ezelle believes. The Birmingham, Alabama, based litigator with Starnes Law has advised NIL collectives and institutions in the NIL Era and previously worked on NCAA investigations.

If Wilken ratifies a settlement that follows a similar breakdown of TV revenue, Ezelle believes it could help institutions navigate Title IX.

“Title IX pervades everything you do and an athletic department has to be in compliance with Title IX,” he said. “So, it is thoughtful and the right thing to do to be considerate. This is an issue that has not been litigated. And so, that presents uncertainty. You have to address that uncertainty. That being said, the people who just say, ‘Let’s just distribute this 50-50 in order to comply with Title IX’ are not looking at the flip side of that. Because if you do it that way, you may actually be in violation of antitrust laws. Because you’re doing something that’s against the market.

“You’re taking something from a market that is generating more revenue and giving it to another market. And so those two things could be in conflict.”

Leaders will follow federal judge on revenue sharing

The top-funded NIL collectives are spending between $13 to $20 million annually on football rosters at the moment. In basketball, the highest spending programs are pushing $5 million.

Despite the NCAA trying to minimize the role of collectives in college sports, multiple sources and stakeholders have continued to tell On3 that the revenue-sharing cap will only necessitate organizations to strike side NIL deals to provide a competitive advantage.

Ezelle believes splitting revenue evenly will only necessitate the need for collectives to step up. And it would also open up the possibility for football players to challenge they’re not receiving enough revenue they’re producing.

The Big Ten announced a seven-year, $8 billion media deal with CBS, NBC and Fox in 2022. The SEC starts its new deal with ESPN this season, expected to be worth around $811 million annually.

Schools will follow Judge Wilken’s lead on dispersing revenue.

“You have to analyze it in the context it’s arising,” Ezelle said. “The smart people who have analyzed and are being thoughtful – and we’ll hear from them – they’ll say, ‘Let’s wait and see what Judge Wilken come down and use that as a guide.’ Because at that point you have a federal judge saying, ‘This is a fair way to distribute your money.’ In hindsight, it would then be smart for universities and conferences to say, ‘We’re going to follow the advice that the federal judge has just given in this case that’s created the revenue sharing, and we’re going to model what we’re doing after what she has just approved.’

“I think it would be a little foolhardy to simply say, ‘I’m going to ignore what a federal judge just did with over $2 billion and said is a fair way to do it.’ And likely is going to be in response to an objection on Title IX, she’ll probably have that pending in front of her. So, I think the smart money would be let’s follow what the federal judge said for us to do.”