UD preparing for a new era where schools pay athletes directly

June 3 – Nine years ago, near the end of his tenure as athletic director of the Dayton Flyers, Tim Wabler spoke about the cost-of-attendance stipend that NCAA athletes would soon receive and the signal it sent about the future of sports College students.

“There are a number of lawsuits that could impact the NCAA, institutions and student athletes,” Wabler said. “There’s a sea change potentially taking place in the next two to five years. We’ll see how it all plays out.”

Wabler made that comment shortly before announcing his retirement in July 2015. Neil Sullivan took over as AD that September.

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Just as Wabler predicted, change has come to the NCAA — slowly but surely and quickly. Everyone is still waiting to see how everything will unfold and it could take many years to assess the impact of the changes.

The biggest change – schools paying athletes directly for participation in sports – is coming soon. On May 23, the NCAA and the five largest conferences agreed to pay $2.77 billion to resolve antitrust complaints. If the NCAA had not reached a settlement, NCAA President Charlie Baker told member schools that the NCAA could have been hit with a $9 billion judgment that would have been “financially devastating and unsustainable.”

While the settlement still needs to be approved by a federal judge, it means more than 14,000 current and former athletes will receive a share of the settlement. The money will be paid over a 10-year period.

For former athletes, the payment will be retroactive to the income they could have obtained if they had had the right, during their careers, to profit from the use of their name, image and likeness. The NCAA did not grant these rights to athletes until July 2021.

The deal also means that current and future athletes will soon receive a share of the revenue that colleges earn from TV deals, ticket sales, etc. The current proposal calls for 22% of revenue, or more than US$1 billion, to be distributed to athletes annually. base.

“It’s the most fundamental, transformative change in the history of college sports,” Sullivan said Wednesday. “I’m not naive. I recognize that the federal lawsuits and government investigations have said, ‘The model must radically change and the system we have now is broken. The status quo is not an option.’ I think this agreement is indicative of that. It’s as significant as anything we’ve ever dealt with.”

The NCAA released a statement after the settlement was announced. Baker, along with the commissioners of the Atlantic Coast Conference, Big Ten, Big 12, Pac-12 and Southeastern Conference signed the statement, which said:

“The five conferences of autonomy and the NCAA’s agreement to the terms of the agreement are an important step in the ongoing reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics across all divisions for years to come. This agreement also is a roadmap for college sports leaders and Congress to ensure this uniquely American institution can continue to provide unparalleled opportunities for millions of students. All of Division I has made today’s progress possible, and we all have work to do to make it happen. implementing the terms of the agreement as the legal process continues. We look forward to working with our various student-athlete leadership groups to write the next chapter of college sports.”

For Dayton and every other school, the next chapter brings a lot of question marks.

“We still haven’t received the formal agreement, the actual document where we can evaluate all the risks and opportunities,” Sullivan said. “We have enough information to see the big picture. In short, there is just under $3 billion in damages that will be paid to a given class of college athletes, and going forward, the proposed settlement eliminates rules that prevent direct payments of schools.”

The changes will take effect in the 2025-26 school year.

“It’s one thing to resolve it on paper or in a mediation room,” Sullivan said, “but it’s another to execute it on campus. Execution is the scoreboard, not the term sheet, not the mediation room. or break us as a business, so I think a lot of details still need to be worked out.”

The upcoming revenue sharing could lead to athletes signing multi-year contracts with schools. The Dayton basketball team lost five players to the transfer portal this spring and gained three players to the portal. This is the norm these days, with unrestricted movement and no penalties for transfer.

“I know this has been talked about a lot,” Sullivan said, “but I think the reality is that there is a lot to be said for long-term commitments on both sides to add some stability to a really unstable environment. I would have to agree with that. I don’t see (the athletes) necessarily wanting to do long-term deals, as they have been the side that has really pushed for the ability to move freely. guess.”

Sullivan also spoke about how the deal and the new era of paying athletes will affect the Dayton 6th, the NIL collective that works with UD athletes.

“Dayton 6th was the most important initiative we had,” Sullivan said, “and in the short term, it is still the most important thing supporting our basketball program. yet. commercials, exactly what you see in professional sports. You see professional players on the markets and your team is paying, obviously, but they are making recommendations in the field.

According to reports, the NCAA will cover about $1.2 billion of the $2.77 billion settlement, or 41%. According to a memo Baker sent to NCAA members, this would be covered by “careful expense management, new revenue initiatives and use of reserves.”

The five largest conferences would account for 24%. Other FBS schools, the so-called Group of 5, which includes the Mid-American Conference, would cover 10%. FCS schools would pay 13%. Non-football conferences, such as the Atlantic 10 Conference, where Dayton plays, would pay 12%, or $34 million annually.

Some reports estimate that a school like Dayton would have to pay $2 million over the next 10 years for the settlement. Meanwhile, UD will have to figure out how much to pay current athletes, starting in the 2025-26 school year.

“It’s a permissive opportunity,” Sullivan said. “You are not obliged to pay the players, but you can. But I think we all recognize that if we want our basketball programs to be what they are, the market will demand that we participate in this and we will put an end to it. have to do this.”