The NCAA’s Self-Inflicted Wounds: A Comedy of Errors in the NIL Era
The ivory towers of academia, those supposed bastions of intellect, have once again delivered a verdict on the landscape of college athletics, and it’s a doozy. It’s a decision so fundamentally flawed, so demonstrably out of touch, that it reinforces one inescapable conclusion: the NCAA, and by extension the powerful conferences that control it, simply have no idea what they’re doing.
Fresh off a monumental $2.8 billion settlement in the House case, a lawsuit accusing the organization of stifling player earnings, the NCAA is seemingly determined to snatch defeat from the jaws of victory. This settlement, poised to reshape the very definition of amateurism, is supposed to usher in a new era of athlete compensation. Yet, what does the NCAA do before the ink on the settlement is even dry? They double down on the same shortsighted, self-serving policies that landed them in hot water in the first place.
The House case settlement, a landmark moment for athlete rights, will deliver billions in back payments to former college players who were unjustly denied the opportunity to profit from their name, image, and likeness (NIL). The settlement also establishes a framework for an annual pool of $20 million to $23 million, a figure set to increase each year, to compensate players for their NIL rights starting July 1. This represents a seismic shift, a belated recognition that athletes deserve a piece of the massive revenue pie they help generate.
But beneath the surface of this seemingly progressive step lies a familiar and troubling pattern. The Power Four conferences – the SEC, Big Ten, ACC, and Big 12 – have consolidated their grip on the NCAA, and their motivations are clear: protect the money at all costs.
Even if it means courting further lawsuits, even if it means hemorrhaging millions, perhaps billions, more dollars, they remain stubbornly resistant to genuine change. They’re willing to enlist armies of consultants, like the seemingly impressive Deloitte Consulting LLP, and appoint figurehead “czars” to oversee college football, all in an attempt to avoid the inevitable. Their fear? Players gaining employee status, unionizing, and collectively bargaining. That, in their eyes, is where the real financial threat lies.
The $20 million to $23 million annual NIL pool, while a step forward, is a mere drop in the bucket compared to the potential losses they foresee if players organize. So, what’s their solution? A system that scrutinizes NIL deals independent of the schools, ensuring they are "legitimate" and fall within a "reasonable range of compensation," all while serving a "valid business purpose" tied to the athlete’s NIL. In other words, they intend to define “fair market value.”
This is where the absurdity reaches its peak. Imagine if the NFL, MLB, or the NBA decided to hire a consulting firm to dictate what their players can and cannot earn from endorsements. It is a fundamental violation of the free market. Value is determined by what someone is willing to pay, not by some arbitrary assessment imposed by those who stand to lose the most.
Initially, one might assume this stems from sheer financial incompetence. But a closer examination reveals a more calculated strategy. The NCAA, or rather, the power conferences, are willing to endure future lawsuits, potentially costing them tens, maybe even hundreds, of millions of dollars, to delay the inevitable: the sharing and collective bargaining of wealth.
The longer they can prolong the process, the longer they can postpone the day they must surrender a percentage of revenue comparable to what NFL players receive. As former Auburn and Michigan State quarterback Payton Thorne aptly put it, "It’s just minor league football now. Anyone who thinks anything different is fooling themselves."
The power conferences are establishing an entity composed of ten athletic directors who will act as judge and jury over potential enforcement issues. This entity, in partnership with Deloitte, will assess the "fair market value" of NIL deals and determine the consequences for deals deemed excessive. This is the same illegal behavior that just cost them $2.8 billion in the House case.
These entities, desperate to protect their billions in annual revenue, will now oversee what constitutes a "legitimate" NIL deal, with the backing of a consultancy that will rubber-stamp their decisions.
And if the deals don’t align with their perceived market value, the athletic director-led group can fine programs and reduce their future NIL budget. The idea is that, over time, the system will self-regulate, filtering NIL deals and maintaining future deals within their controlled definition of legitimacy.
But why should athletes be subject to a mediator who dictates what is legitimate, potentially preventing them from earning their true worth, while coaches like Georgia’s Kirby Smart receive $13 million annually? Each is worth whatever the market will bear. There are attorneys already preparing to file lawsuits, ready to sue the NCAA into oblivion. More lawsuits, more depositions, more financial experts, years of litigation and for what? To ignore the inevitable rise of collective bargaining.
The NCAA’s amateurism model is an antiquated system, an octopus that has grown fat and detached from reality. Now, forced into the light, it clings desperately to its old ways, unwilling to relinquish the cash it has hoarded for decades, prepared to spend millions in legal fees to protect future billions in revenue.
Perhaps they do know what they’re doing after all. A sad reality of what’s to come in the world of college sports.
