Midway through historic year, here are the biggest unknowns facing college sports

Take a breath, college sports.

Midway through a year so dizzying, so consequential – from landmark National Labor Relations Board developments and sizable cracks in the ACC’s foundation to a slew of lawsuits and, of course, the historic House settlement – the December unveiling of the NCAA’s reform proposal looks like ancient history.

As we eye the second half of one of the most impactful years in college sports history – soon to kick off with media days for newly expanded power leagues – the industry finds itself in an entirely new frontier yet still grappling with far more questions than answers as a more professionalized ecosystem comes into focus. 

Over the next six months, the NCAA will continue its lobbying efforts on Capitol Hill. Schools and leagues will gird themselves for a coming revenue-sharing model that will prompt difficult financial decisions. And all-important proceedings will continue in the courts and other venues, incrementally shaping this new world order. 

While the college sports world absorbs a defining first six months of 2024, here are the biggest unknowns as we consider the next six months:

Will U.S. District Judge Wilken certify the House settlement?

The tectonic plates shifted with the approval of House settlement terms on May 23. But the historic proceedings are not done.

Legal experts caution that it is not a foregone conclusion that Judge Claudia Wilken will certify the settlement in the coming months or early next year.

Mit Winter, a college sports attorney with Kennyhertz Perry, told On3: “Assuming the House settlement’s fairness hearing is held this year, how many objectors will we see show up in person (athletes, schools, and other parties)? Will more schools seek to intervene in the House case like Houston Christian did?”

Along those lines, when will we have more clarity on the new NCAA enforcement process or entity, Winter asked? And if the House settlement terms aren’t initially approved by the court, does the case proceed to trial, or do the parties agree to new terms that can get approved?

If Wilken does certify the settlement, the earliest a revenue-sharing model can take effect will be fall 2025.

How many schools across the country are willing and able to share $22 million with athletes?

Some power conference schools are incrementally announcing they will participate in the revenue-sharing model when it takes effect.

But not all schools have $200 million athletic department budgets. We’ve already seen athletic directors at some power conference schools speak to the enormous financial stress test that almost all Power Four schools will confront, be it at Iowa State or Alabama and beyond. 

“As much as people think there’s unlimited money, there’s not,” Alabama Athletic Director Greg Byrne said. “I think we all have to be thoughtful in how we spend, and where we spend. We can’t be top of the market in everything. And I’m at Alabama. Think about that, right?”

Schools are searching for new revenue streams, along the lines of now being permitted to put corporate logos on their football fields. For example, Texas Tech already unveiled its new partnership with Adidas with massive logos near midfield.

As Winter added, with some new state NIL laws going into effect, will we see schools implementing plans to pay NIL compensation to athletes before the House settlement is approved? Which school will be the first to hire a powerhouse marketing agency like Two Circles to handle its NIL compensation model and the marketing services that go along with it?

Expect a clearer picture to emerge over the next six months that will begin to show where the college sports’ line of demarcation rests. Specifically, what will the revenue-sharing model mean for schools in the industry’s competitive mid-tier – thinking American Athletic Conference or Mountain West Conference schools? 

Will Group of Five and non-P4 schools be able to automatically participate in the new model that allows schools to pay NIL compensation to athletes, Winter asked? Or will they have to opt in and agree to follow other new rules as part of the opt-in process?

Also, what will the new financial model mean for rank-and-file schools in the two super conferences, schools like Purdue, Minnesota, Mississippi State and Vanderbilt?

What’s the future of donor-driven collectives?

Many of the most ambitious, well-funded NIL collectives aren’t going anywhere. Rather, they will play a critical role in helping many power conference schools circumvent the salary cap.

Look for collectives to continue to position themselves as an entity or agency that can disperse additional dollars to select marquee athletes in addition to the revenue schools share with athletes. This will particularly help in the ultra-competitive world of recruiting and retaining elite players in football and basketball.

What remains unknown is how many collectives will look to move in-house, under the school’s umbrella, to help combat donor fatigue and better ensure that strategic plans are aligned. However, there are clear advantages to keeping collectives operating as third-party entities, including not being subject to Title IX compliance and avoiding legal liabilities.

Will there be formal Title IX guidance issued to schools related to a revenue-sharing model?

This is perhaps the most significant unanswered question on the heels of approval of the House settlement because it will determine how dollars are allocated on campus.

The 52-year-old federal law protects students from sex-based discrimination at any school that receives federal funding. 

There is no consensus among legal experts regarding how, if at all, Title IX will apply to revenue shared with athletes. 

Arthur Bryant of Bailey & Glasser, LLP – who has represented more women athletes in Title IX litigation against schools and universities than any lawyer nationwide – told On3 that institutions, conferences and the NCAA need to be aware that whatever revenue-sharing model is implemented, Title IX requires that female and male student-athletes receive equal treatment and benefits.

“If 60% of the student-athletes are women and Title IX applies, they basically need to receive 60% of the revenue-sharing dollars shared,” said Bryant, who is currently representing current and former Oregon athletes in a class-action Title IX lawsuit. 

Other NCAA observers disagree.

Either way, it could trigger legal headaches.

If schools choose to give the majority of shared revenue dollars to revenue-producing athletes in football and men’s basketball, the school potentially could be in violation of Title IX. 

On the other hand, if schools choose to disperse dollars proportionately to men’s and women’s athletes, those revenue-producing football and men’s basketball players could have grounds for a legal challenge, legal experts say.

Schools at this point, sources said, are offering differing plans of how they plan to allocate dollars. One consensus: Whether it’s by the courts or the U.S. Department of Education, the college sports world is awaiting formal guidance that universities can use as they craft a revenue-sharing template.  

“What we really need on this one, in particular,” NCAA President Charlie Baker said recently, “is the feds to give us guidance that says this is what a national standard with respect to Title IX and rev share should look like.”

What will be the outcome of the USC-NLRB case?

The decision by a Los Angeles-based administrative law judge, potentially coming this fall, could be the next earthquake to hit college sports.

The case involving Dartmouth’s men’s basketball players is big, as it awaits a decision by the NLRB’s national board whether it will formally review a regional director’s Feb. 5 decision that the athletes are employees of the college. But the case charging that USC’s football and men’s and women’s basketball players are employees of the university is even bigger.

Why? The NCAA and Pac-12 Conference are also charged with being joint employers. The National Labor Relations Act governs only private institutions. But if the NCAA and Pac-12 are deemed joint employers of USC’s football and basketball players, it could open the door for athletes at public schools to also be considered employees. 

That would be a Def Con 1 moment for college sports administrative class. There would be a lengthy review process. And it would intensify the NCAA’s lobbying efforts on Capitol Hill in pursuing its long-sought antitrust protection and codification that athletes are not university employees. Will we receive clarity on roster caps and the future of walk-ons?

Here are two elements you’ll hear more about in the coming months: roster sizes and the future of walk-ons, specifically as it relates to football.

As part of the House settlement, scholarships are expected to increase for sports at the same time that unspecified roster caps will be implemented. The reason for the former is to provide additional benefits to athletes as a way to try to create more legal protection. The latter is designed in part to reduce costs at a time when athletic departments nationwide are looking to reduce expenses.

Football teams now can award 85 scholarships. How much that increases remains to be seen.

How many total players comprise football teams varies. In the case of Nebraska, which has a long, storied history with its robust walk-on program, the number is 145. Many teams hover around 120.

The implementation of roster caps could spell the end of walk-ons as we know them, what many sources – and college football coaches – are already calling a potentially sad consequence of the House settlement. And this isn’t merely a football-specific issue. All sports are expected to be impacted.

For example, this week there were discussions amongst women’s soccer coaches that their rosters could be reduced to the 27-29 player range. Normal D-I women’s soccer rosters hover in the mid-30s.

Will the NCAA Tournament expand?

Expansion is coming. The power leagues want more access to the 68-team tournament. And what the power leagues want, they shall receive.

There won’t be any changes affecting the 2025 NCAA Tournament. But at the least, expect more signaling in the next six months that the tournament will expand by either four or eight teams in a few years, a development that sources for months told On3 was an inevitability.

The more important aspect relates to the rhetoric surrounding modest expansion. In short, will leaders from the power leagues, most notably SEC Commissioner Greg Sankey and Big 12 Commissioner Brett Yormark, stop there? Or will they push for reducing or eliminating automatic berths for champions from one-big leagues?

That answer will telegraph the extent to which the big leagues in the coming years may use their leverage to try to box out smaller leagues from the NCAA’s golden goose – March Madness. 

Will leagues make splashes with private equity?

Private equity is about to hit college sports in a big way.

 In late May, RedBird Capital and Weatherford Capital announced the creation of Collegiate Athletic Solutions, which is planning to lend money and offer guidance to athletic departments in exchange for a share of future revenue.

Then last month, On3 confirmed that Big 12 campus leaders are weighing a potential landmark private equity investment intended to narrow the revenue gap between the league and the industry’s two super conferences – the SEC and Big Ten.

The deal would entail the Big 12 receiving a cash infusion of as much as $1 billion from Luxembourg-based CVC Capital Partners in exchange for as much as a 20% stake in the league. The 16 conference members would receive a portion of the cash investment, and the league would receive access to CVC’s investment services and clients.

Sources familiar with the league’s internal talks told On3 that while some campus leaders are bullish on the potential deal, pushback exists from at least a few school presidents. Sources caution that achieving a supermajority among school presidents to approve this deal could be a steep climb.

If CVC secured a 20% stake in the league, sources say it would likely have very little operating control. What it could have, they note, is control – the right of first refusal – related to other sources of capital at both the conference and school levels.

In a post-House settlement world, the pressing need to tap into new revenue streams will be felt throughout the top tiers of college athletics, especially throughout a conference like the Big 12. Member schools receive $31.7 million per year because of their media rights deal, which is less than half of what Big Ten member schools receive because of their rights deal.

That said, sources said schools, rather than leagues, are more likely to first jump into private equity waters. 

How will the 2024 presidential election impact NCAA sports?

One significant way the presidential election could affect NCAA athletics relates to the NLRB.

In 2021, President Joe Biden appointed Jennifer Abruzzo as the organization’s general counsel. In September 2021, Abruzzo issued her headline-making memo in which she said “Certain players at academic institutions are statutory employees who have the right to act collectively to improve their terms and conditions of employment.”

Three years later, two cases – USC and Dartmouth – continue to proceed, as many industry leaders continue to say we’re on a slow road to an employment model for some athletes. 

But if Donald Trump regains the presidency, he could replace Abruzzo with an individual who harbors a different view entirely on the question of whether college athletes are employees of their schools.

That scenario could, potentially, slam on the brakes aboard the employment train.

What to expect from the inaugural 12-team CFP?

On the heels of the most-watched football season across all networks, the expanded College Football Playoff awaits this winter. Plenty of unknowns abound:

Will non-CFP bowl games dangle carrots, otherwise known as NIL dollars, to entice players to compete? How many opts-outs will we see in non-CFP bowl games, or even in CFP first-round games? 

To what extent, if at all, will the expanded field diminish the attraction of some regular-season games? How will the American sporting public digest the avalanche of football coming our way this winter, between the NFL and the expanded CFP?

The one certainty, of course: We will watch.