Tag: upend

NASHVILLE, Tenn. — As the NCAA Board of Governors entered the third hour of its meeting Thursday night, the phones of college sports leaders within the gathering began buzzing.

Texts. Emails. Calls.

While some of college sports’ most powerful executives met here to end this week’s annual NCAA convention, the Department of Education’s Office of Civil Rights released some jaw-dropping news that stands, if upheld, to completely alter the way many schools plan to pay their athletes in the future revenue-sharing world of college sports.

The department issued long-awaited guidance related to Title IX: Revenue-sharing payments from schools to athletes must be “proportionately” distributed to men and women athletes, or institutions risk violating Title IX, the 53-year-old federal law requiring universities receiving federal funding to provide equal benefits to women and men athletes.

“Way to drop a bomb, huh?” whispered one college leader emerging from the meeting room.

In the final days of President Joe Biden’s administration, the Department of Education’s nine-page guidance released Thursday serves as an 11th-hour salvo at the plans of many power conference schools to distribute a majority of their revenue-share pool — 80% plus — to football and men’s basketball teams.

As part of the NCAA and power conferences’ landmark House settlement agreement, schools are permitted starting July 1 to distribute at least $20.5 million to athletes annually in an escalating, capped pay system. Most schools are determining their distribution method based on a sport’s revenue generation and/or the back-damage distribution method announced by the House plaintiff lawyers.

In either case, football and men’s basketball are poised to receive a significant amount of the revenue. According to those with knowledge of the subject, multiple schools are planning to deliver as much as 85% of the $20.5 million revenue pool to their football roster — clearly a violation of the federal Title IX guidance issued Thursday.

However, the document is not a regulation but only guidance. Even more significant is the impending change in the presidential administration, as a Democrat leader is replaced by a Republican, a major shift that has far-reaching and sweeping impacts for the future of college athletics.

President-elect Donald Trump, due to be sworn in on Monday, has authority to replace executives at the Department of Education and rescind or change orders and guidance issued by the entity — a common move for party turnover in the executive branch and something that happened when Trump took over for Democratic President Barack Obama in 2016.

Trump’s nominee to lead the Department of Education is Linda McMahon, the estranged wife of WWE founder Vince McMahon, and the administrator of the Small Business Administration under Trump from 2017-2019.

Asked about a new administration overturning the guidance, NCAA president Charlie Baker, a former governor, said, “It’s really hard to tell. That process usually takes a while with all the elements that are associated with turnover in administration. Some stuff happens right away, some stuff happens later and some stuff doesn’t change at all.”

In the meantime, the guidance has left many school administrators scrambling to understand how the document may impact their revenue-sharing strategy.

Thursday’s document was chock full of critical lines that may trigger alarm and change in many school plans, if the Trump administration does not rescind it. For instance, the department classifies future revenue payment as “financial assistance,” which “must be made proportionately available to male and female athletes,” the document says.

“Schools remain responsible for ensuring that they are offering equal athletic opportunities in their athletic programs, including in the NIL context,” the guidance says. “A school may violate Title IX if the school fails to provide equivalent benefits, opportunities and treatment in the components of the school’s athletic program that relate to NIL activities.”

Hundreds, if not thousands of athletes, have already signed revenue-share agreements with schools, most of them contingent on the settlement’s approval in April. Those agreements feature a payment amount that, perhaps, is now in jeopardy.

Most of the agreements grant the school non-exclusive rights over the athlete’s name, image and likeness (NIL), permitting businesses and brands to still enter into a relationship with the athletes but prohibiting another school from doing so.

“We need some time to read, digest and understand it,” said Josh Whitman, the Illinois athletic director who serves on the Board of Governors, the NCAA’s highest-ranking governance body. “This whole thing has been an exercise for us in contingency planning. The world has changed over and over just in the last six months. We’ve been building plans on top of plans for some time now and this is just the most recent example of where we’re going to need to take some new guidance under advisement and figure out what if any changes we need to make to the strategy we developed.”

The NCAA does not traditionally give guidance to schools related to Title IX, leaving those decisions to campus officials like Linda Livingstone, the Baylor president and chair of the Board of Governors.

“We’re going to all have to go back (to campus) and have a conversation about it and see what we think the implications are for what we’re doing,” she said Thursday.

“Well, we all want to read it. We are trying to digest it,” said ACC commissioner Jim Phillips, who is also on the board.

Thursday’s guidance wasn’t terribly shocking for some.

For months now, many Title IX experts have publicly voiced their concern over some schools’ lopsided distribution method. One of the nation’s leading Title IX lawyers, Arthur Bryant, told Yahoo Sports in the spring that he expected the distributions to immediately trigger Title IX lawsuits, even if schools used market value to justify the payments or a third-party agency.

“Title IX is not based on the market. If the market discriminates, the schools cannot,” Bryant said. “The school can’t use a marketing agency to avoid Title IX.”

Even one of the plaintiff attorneys in the case, Jeffrey Kessler, acknowledged last April that the Title IX issue will need to be resolved in the courtroom.

Preparing to share revenue directly with athletes, many schools have shuttered their booster-fueled NIL collectives, the entities that for three years now have funded athletic rosters.

One of the more jarring portions of the guidance is related to these entities, targeting NIL compensation from some third parties, specifically those affiliated with boosters: “The fact that funds are provided by a private source does not relieve a school of its responsibility” for Title IX compliance, it says.

The guidance drops just two weeks before the deadline for objections to be filed in the House settlement — a landmark agreement in which NCAA schools are paying former athletes (mostly power conference football and men’s basketball players) nearly $2.8 billion in back damages.

However, the settlement’s second portion permits schools — but doesn’t require them — to share millions of dollars in revenue with athletes in a capped system. Baker does not believe the guidance will impact the timeline of the settlement.

A final hearing is scheduled for April 7 in the California court of Judge Claudia Wilken, coincidentally the day of the NCAA men’s basketball national championship game.