Once prohibited, NIL is now a fact of life in college sports, and the details of how it will be regulated continue to be ironed out.
In recent months, the NCAA has been embroiled in legal battles that deal with NIL and athletes’ ability to accept money and other benefits for their work, most notably including the cases House vs. NCAA, Hubbard vs. NCAA and Carter vs. NCAA.
With Friday’s submitted settlement terms between the NCAA, the Power Five conferences and lawyers representing former and current college athletes (which have yet to be approved by the court), those regulations look a little bit clearer.
The implications for LSU and the college athletic landscape are paradigm-shifting.
First of all, the settlement proposes a system in which the Power Five schools (schools in the SEC, ACC, Big 10, Big 12 and what’s left of the Pac-12) can directly pay their players by giving them a share of their revenue.
The amount each school in the Power Five could use would be uniform, set initially at 22% of the average power conference school’s athletic revenue (including television deals, ticket sales, etc.), which is estimated to be over $20 million per school.
The $20 million would represent a salary cap of sorts for Power Five schools, including LSU.
That system would first go into effect during the 2025-26 athletic year, and the percentage would escalate over the next ten years.
This new system will stabilize the current roster-building landscape and completely alter the way LSU and other schools approach attracting new talent.
It’s unclear how that money would be spread across each school’s sports, but it’s expected that, with Title IX regulations, it would be based on equity rather than revenue generation.
For example, football players won’t be paid the same percentage of the school’s athletic revenue as they generate (which would be the majority).
The settlement also leaves open the question of how athletic programs in smaller conferences fit into the picture.
There is no such proposed system for the Group of Five conferences or the Football Championship Subdivision, which could exacerbate the existing competitive gap between those teams and the top-level programs.
The hope for this system is to cut down on the unchecked spending that has characterized college sports in the post-NIL era and created inequity between schools that have wealthy boosters and those that don’t.
LSU, like many schools, has often been outbid on the market for commitments from transfers or high school athletes in the past few years by schools with greater resources.
With the new system, third-party NIL deals will be greatly reduced, and the NCAA will only allow those that are deemed “legitimate NIL activity.” The deals will need to pay athletes appropriately for the value of their endorsement compared to other athletes considered of similar prominence.
Helping to manage these third-party NIL deals will presumably be the role LSU’s existing NIL collective, Bayou Traditions, fills going forward.
The settlement has also taken arbitration and dispute settlement on the new rules out of the NCAA’s hands. That will now be handled by a court-appointed “special master.”
In addition, the settlement reached agreements for athletes seeking past damages for money they would’ve earned had the NIL system been in place when they were in college.
Division I athletes who played from 2016 on can make a claim for damages (based on the statute of limitations of the lawsuit), and the NCAA has agreed to pay almost $2.8 billion to former athletes.
According to ESPN, the highest estimated payout for an individual athlete is expected to be $1.8 million.
More and more former athletes are expected to apply for damages, and the amount of money they receive will be calculated based roughly on how much they might’ve earned based on the sport they played, what school they went to, their playing time and other factors.
In addition, the settlement included the expansion of how many scholarships teams are allowed to give across all sports.
Though schools aren’t required to use every available scholarship slot, they now can offer more than double the previous amount overall, which is especially significant in smaller sports.
Overall, the new settlement terms means more fair compensation for LSU athletes of the past, present and future, and a more stable regulation system for the post-NIL world.
