College sports have entered a new era.
Late last week, a California court approved a legal settlement that ends a longstanding ban on schools paying athletes directly. The House settlement is named after former Arizona State University swimmer Greg House, who sued the NCAA and five conferences. The agreement settles multiple lawsuits that were combined.
Michigan Public sports commentator John U. Bacon joined Morning Edition host Doug Tribou to take a closer look at the settlement.
Doug Tribou: There’s been a long run-up to this settlement and some things changed along the way, so to help our audience get caught up, I want to present a few of the key results and have you give us a summary of your thinking about each of them. Then we’ll get into some larger questions.
First, the deal creates the framework for colleges and universities to pay their athletes directly. Right now, the total amount allowed for each school is about $20.5 million based on a calculation on TV revenue, ticket sales, and other factors, which some schools disputed. What’s your view of the direct revenue sharing plan?
John U. Bacon: Well, first, that'll be the first of about ten thousand disputes, but anyway. I find it inevitable. It's long overdue in many ways, but it's going to be incredibly complicated. For all the money that college sports produces, all but a few athletic departments are losing money. And one of the early complications: Will this turn student athletes into employees? If so, that will complicate their lives too, including taxes, kids! Hey, have fun! [Laughs]
"For all the money that college sports produces, all but a few athletic departments are losing money."John U. Bacon
DT: [Laughs] The agreement also caps roster limits for sports, which is likely to eliminate the concept of the walk-on athlete as we know it. But the House settlement also allows schools to offer every athlete a full scholarship. What jumps out at you there?
JUB: Well, if you're looking at the quote-unquote "spirit of college athletics," you know, sound mind, sound body, a true student-athlete, this is going to impinge on that quite a bit. Not only will walk-on athletes likely be reduced, you're going to put a lot of pressure on schools to limit or cut their Olympic sports like gymnastics, swimming and track, which almost never make any money.
DT: Another major pillar of the House settlement is $2.7 billion in back pay, going to athletes who competed between 2016 and 2024 and were not able to maximize their name, image and likeness earnings — NIL — because of old rules. The NCAA and its conferences will pay out that back pay over time. What's your view on the back payments for athletes?
JUB: It's a good idea. It's more parity for the athletes. Certainly they had it coming, but it's also going to be another very large expense — $2.7 billion — that will put pressure on everything else.
DT: And we want to note here that a group of eight women has appealed the settlement, saying the division of the back payments is not fair to female athletes and that its structure violates aspects of Title IX, which prohibits gender discrimination in education. It appears that appeal will delay the start of those back payments, but the revenue sharing with current athletes is likely to move forward.
John, I'm just going to take a guess that this will not be the last legal action we'll see...
JUB: [Laughs] Doug, I love you. And we're going to be talking about this every Friday for about the next five years. So yeah, I think your impulse is correct here.
In an open letter, athletic director Warde Manuel announced the University of Michigan has a long-term goal of reducing its athletic department staff by 10 percent as a cost-saving measure.
DT: Let's turn to some local effects. After the settlement was finalized, University of Michigan Athletic Director Warde Manuel published a letter about U of M’s plans. Manuel said the changes create a nearly $27 million deficit for the athletic department — from more than $6 million in new scholarship money the department will pay out and that maximum $20.5 million that all universities are allowed to pay directly to athletes.
Manuel listed a lot of ways U of M can make up the short-term and long-term costs. One that stood out to me was, “the department staff will gradually decline in number through two methods: attrition, with a long-term goal of a 10 percent reduction in total staff, and through a stricter approval process for new hires.”
Were you surprised to hear that the Michigan athletic department is planning to downsize?
JUB: Well, I was impressed by Manuel's directness and his plan here, but I was a little surprised because this move was about ten years overdue. Manuel inherited a bloated payroll from a previous athletic director, Dave Brandon, that had increased the budget of the department from $100 million to $140 million in just four years. And Warde had done nothing to reduce it until now. But better late than never.
And I think his approach — attrition with fewer future hires — is both smart and compassionate. Trust me, every athletic department out there will be doing the same, so Michigan has very little choice here.
DT: Michigan State's new athletic director, J Batt, who was just announced as the AD this month, also released a letter. What a time to get a new job, by the way, you take a new job as an AD and they rewrite how college sports works [Laughs].
JUB: [Laughs]
DT: He did note that MSU is committed to distributing the maximum amount. Again, that's that $20.5 million to its athletes. He also promised to share more details about MSU's plan in the near future.
Some people might be wondering about the schools that do not have the ability to do that sort of maximum spending and that don't have these full scale programs that you see at U of M or MSU or Ohio State. For example, Oakland University has a very competitive basketball program at the Division I level, but does not have an NCAA football team.
How do you expect this to affect the schools in those types of situations?
JUB: For those schools, this is going to be brutal. It's going to increase the already growing gap between the haves and the have-nots. Oakland U., [Mid-American Conference] schools like Eastern [Michigan], Western [Michigan], and Central Michigan, they're going to have some very tough choices. And they're going to find it very hard to compete in a lot of sports and they're going to start cutting sports. It's almost inevitable.
Editor's notes: Some quotes in this article have been edited slightly for length and clarity. You can play the audio of the full interview near the top of the page.
The University of Michigan holds Michgan Public's broadcast license.
