Could the bill neutralize coaches’ and athletics departments’ abilities to regulate and govern the conduct of student-athletes under their watch?
Yes. The bill states that an NCAA member school, conference, and NCAA national office may not levy against a college athlete any fine or other punishment that does not apply equally to other students enrolled in the institution. This particular clause will raise many questions on feasibility and practicality.
For one, non-athlete students may be subject to particular rules that the rest of the student body are not. For example, a student government representative may have particular officer obligations that the rest of the student body does not. A music student may have performance requirements stemming from his or her music discipline or degree that do not apply to other students. In that same way, student-athletes may have conduct requirements such as arriving on time for practices or wearing particular apparel during team activities — rules that other non-athlete students would have no reason to fulfill.
Not many federal bills have sought to include revenue sharing, but this one does. How is the bill trying to carve out revenue sharing? How is profit defined for purposes of splitting revenues?
The bill does venture into a formula by which college athletes would be receiving a 50-50 split of revenue, post-expenses with programs that trigger the bill’s revenue-sharing mandate. The bill posits that the only expenses that could be reduced from the revenue total are the scholarships for the involved student-athletes.
The target of the revenue sharing formula are institutions with high commercial sports NIL revenue. The bill defines the term ‘‘covered sports team’’ as an athletic program that participates in a division or subdivision for which 50% of the total commercial sports NIL revenue of every institution that participates is greater than the total amount of grant-in-aid provided by those institutions to eligible college athletes that participate. How the sponsors intend to further define “total commercial sports NIL revenue” will be pivotal when, for example, licensing out one’s university athletics marks to sell t-shirts may not be sport-specific but could still account for a notable amount of revenue.
Process-wise, the bill calls for, on an annual basis after one year from enactment, the NCAA national office to be responsible for distributing commercial sports revenue royalties to eligible college athletes that participate in the division or subdivision of the covered sports team. A student-athlete’s university would be required to transfer to the NCAA 50% of commercial sports NIL revenue minus the amount of grant-in-aid the school awards to eligible college athletes regardless of whether the institution awards athletics scholarships or not (Ivy League, for example). If the amount of scholarship money that the NCAA institution awards to eligible college athletes that participate on the covered sports team is more than 50% of the commercial sports NIL revenue generated by the covered sports team, the institution shall transfer a percentage of such commercial sports NIL revenue determined by the Commission after calculating average contributions made by institutions of a similar size.
Further, NCAA member schools would be required to submit each year a list of the eligible college athletes that participate on the covered sports team.
This portion of the bill will face significant scrutiny on how the revenue-sharing formula actually works within the modern financial landscape of college athletics licensing, media and marketing rights, and other revenue that could be plausibly tied to student-athlete NIL. There’s a lot of unknowns that need to be identified and then unpacked that go beyond the baseline formula spelled out in the bill.
How would student-athletes be paid from this revenue sharing model?
Not later than the first August 15 occurring after the date that is one year after the date of enactment of this bill, and annually thereafter, the NCAA would distribute the money to every eligible college athlete that participates in the division or subdivision in which the covered sports team participates based on the total commercial sports NIL revenue divided by number of eligible athletes for that year.
The NCAA could distribute these royalty shares either directly to the athletes or, upon the request of the eligible college athlete, through the licensing group of the eligible college athlete. The NCAA member schools would also have to disclose annually their commercial sports NIL revenue generated and whether it has one or more covered sports teams and the amount of royalties distributed to each eligible athlete on a covered sports team. The NCAA national office would also have to disclose its commercial sports NIL revenue and the amount it distributed to eligible athletes.
The revenue sharing concept will likely draw the most contentious debate and pushback from NCAA national office and its member schools and conferences that, in part, are championing the collegiate model that includes broad-based sport sponsorship. The collegiate model would also not mirror a pro sports league that shares revenue with a unionized group of athletes. It could be said that revenue sharing is already happening under the collegiate model — that is, to support a wide-array of non-revenue, Olympic sports as part of the operational philosophies of each NCAA division.