The New World of College Athletics, explained
A guide to understanding some of the key changes that are shaping the new world of college athletics
While there has arguably never been a more interesting time in college athletics, we are undoubtedly in the midst of the most confusing time in college athletics ever. Transfer portals, collectives, COVID-years, revenue-sharing, buyouts, unionizing, conference realignment — it's all seemingly interconnected in the most convoluted, confusing way possible.
This confusion has become increasingly clear to me during recent conversations surrounding the state of college athletics. I realized that, even though I try to follow NCAA-related news as close as possible, the interconnected topics are difficult to keep straight. So, I decided to write myself a sort of guide to understanding this new world of college athletics. I figured others might find it interesting or maybe even helpful.
The Transfer Portal
The transfer portal is an online database run by the NCAA that all coaches can access. Student-athletes are organized by school and sport. It was implemented a year or two before the COVID-19 pandemic and has exponentially increased the rate at which student-athletes transfer between schools. Why? Because of the portal's centralized simplicity. Before the transfer portal, you would simply fill out some paperwork and then you were (usually) "free" to speak with other coaches. But it was mainly up to the student-athlete to reach out to other coaches and let them know they were transferring. Of course, there were discussions amongst coaches about who was transferring but it was a decentralized system that relied mainly on “word of mouth” and rumors. The new online portal system has made it much easier to know who is transferring, which has made transferring a much more attractive, less work-intensive option for student-athletes.
Main point: The transfer portal has made it far easier to transfer.
Transfer Eligibility Rules
While the transfer portal is one of the reasons student-athletes regularly bounce from school to school to school, a bigger reason is the rule changes regarding eligibility after transferring. The previous rule required most student-athletes to sit for a year if they transferred. The exception was if you were a graduate transfer (earned a four-year degree) or if you filed a special "one time" waiver, which granted student-athletes in some sports immediate eligibility. There was absolutely no transferring to schools within conferences. Then, around that 2019-2020 range, all those rules went by the wayside. Now, student-athletes can more or less transfer anywhere, any time, and as many times as they want. There are still some rules by the NCAA but even those have been (successfully) challenged in court.
Main point: There are almost no rules related to transferring anymore.
NIL (Name, Image and Likeness)
NIL, or “Name, Image and Likeness,” is a catch-all term for various forms of legislation that have allowed student-athletes to profit off their name, image and likeness. Before NIL laws were passed, student-athletes couldn't make any money off autographs and endorsement deals, or accept free cars or dinners — things of that nature. Each fall semester, student-athletes would have big seminars going over all the rules and regulations of what you could and could not do (I remember them well). Then everything changed in almost a total reversal. Basically, the NCAA lost a series of court cases (including one at the Supreme Court) and a select few state legislatures passed new laws that said student-athletes could profit off their NIL. The NCAA then basically ripped out all the NIL rules from their rulebook and the floodgates opened. The NCAA then came back with a loose set of NIL rules and guidance. The NCAA's initial hope was that since legislation set this whole thing in motion, Congress would step in with additional legislation. Of course, Congress has not stepped in and schools have not followed the NCAA's "rules."
Main point: New laws have allowed student-athletes to start making real money.
Collectives
When the NIL laws changed, I don't think anyone foresaw just how powerful "collectives" would become. Collectives are more or less a group of people, often connected to a university in some way, that pools money together. The money is then offered to student-athletes — either high school recruits or student-athletes in the transfer portal — to come and play for the university's athletic programs. All major football and basketball programs have some sort of a collective. For example, you might have a collective for the football program and then maybe you have a collective for the men's basketball program. Or the collective supports the football, the men's basketball program and maybe a few other sports. It varies from school to school. The one thing that doesn't vary is how the collectives operate alongside these programs. They work "indirectly" with the coaches to target student-athletes with lucrative “NIL” deals. See, when a student-athlete gets offered an NIL deal to play quarterback at say, Miami, they aren't getting the offer from the university itself. While the coach might inform the student-athlete (or the student-athlete's agent) of the proposed NIL deal, the money is actually coming from the collective. There are tax implications to collectives but those differ by how collectives categorize themselves. Some are 501(c)(3) non-profits while others are registered as for-profit LLCs.
The NIL laws were changed with the correct intentions. But NIL, as we currently know it with collectives, have quickly morphed into more or less “pay for play” models. Some collectives, I’m sure, are having their student-athletes do NIL activities (maybe their in a commercial or they’re signing a few autographs) but its now become “here’s a check, come play for us.” To be clear, this is not what the legislation was intended for but the NCAA, kneecapped by endless lawsuits, has no teeth to enforce any rules related to NIL. It’s really a lawless area right now, which is why people refer to this era of college athletics as the “Wild Wild West.”
Main point: Donor groups associated with sports programs are offering money for student-athletes to come play for their university.
Case Study: Ole Miss’ The Grove Collective
I have looked through and researched a fairly large number of Power 4 collectives. The University of Mississippi (Ole Miss) has one of the “best” collectives out there, helping transform a previously middling SEC West football program into a premier portal landing spot. They have also played an outsized role in the resurgent Rebel men’s basketball team. A select few points from their “Q&A” section are particularly revealing:
What is the purpose of The Grove Collective?
Ole Miss participates in the most competitive league in college athletics – the SEC West – and we value the student-athletes who represent Ole Miss in that effort. In order for Ole Miss to compete in NIL, and fairly compensate our athletes for their publicity rights, it is necessary to pool and harness the collective resources of the alumni and supporters of Ole Miss, and its alumni-related businesses. The Grove Collective allows us to be stronger together, providing the platform through which all alumni and supporters of Ole Miss may quickly and easily contribute to this cause.
How does The Grove Collective Work?
The Grove Collective enters into Name-Image-Likeness Agreements (“NIL Agreements”) with Ole Miss student-athletes. The student-athletes are selected by The Grove Collective’s Leadership Committee. Under the NIL Agreement and in return for compensation, a student-athlete licenses his or her publicity rights to The Grove Collective, and The Grove Collective utilizes the publicity rights by promoting the student-athlete on this website, at events, and in other ways. Compensation is paid in monthly installments to student-athletes, and to minimize tax issues for the student-athletes, Grove Collective makes estimated tax payments on behalf of the student-athletes to federal and state taxing authorities during the term of each student-athlete’s NIL Agreement.
Are all of The Grove Collective’s NIL Agreements for the same amount?
No. The contract amounts vary based on the specific student-athlete and the value of his or her publicity rights. For instance, higher-profile athletes may receive more compensation than lesser-known athletes. Each NIL Agreement is individually negotiated and agreed upon by the student-athlete and The Grove Collective. The Grove Collective also assists its student-athletes when they desire to enter into third-party NIL Agreements, by which the student-athletes may earn additional compensation.
Is The Grove Collective an “official” part of Ole Miss?
No. Under the Mississippi Intercollegiate Athletics Compensation Rights Act, a NIL program must be a separate legal entity from a university – the Act prohibits universities from being parties to NIL Agreements entered into with a student-athletes. However, the Act specifically allows communication between Ole Miss and The Grove Collective and expressly authorizes Ole Miss to facilitate engagement between student-athletes and The Grove Collective.
Revenue-Sharing
I would say most people who pay attention to college athletics have a decent understanding of the transfer portal, NIL and an ok understanding of collectives. Few understand just how game-changing revenue-sharing will be, and its set to begin in just a few months. This process began in 2020 (you can trace back to the actual start to many, many lawsuits ago) when two former student-athletes filed a class action lawsuit against the NCAA (a swimmer from Arizona State is the main plaintiff). The crux of the antitrust lawsuit was that NCAA Division I student-athletes were not fairly compensated for NCAA licensed video games and were looking to get compensated for name, image and likeness damages. The case was assigned to the judge who had previously ruled against the NCAA in two other landmark cases. Eventually, in spring 2024, the NCAA (and members of the then Power 5 conferences) decided to settle the suit for $2.8 billion.* This money would be back paid to former student-athletes, mainly football and basketball student-athletes, who played after 2016 and before NIL legislation passed.
U.S. District Judge Claudia Wilken is set to make a final approval on the settlement in April.
*The NCAA is paying for half of this settlement from reserves/insurance and will pay off the other half through reductions in revenue shares over the next decade. Basically, each conference gets distributed revenue from the NCAA that is split between its members. To pay the settlement, the NCAA will withhold some of that revenue. For some schools, this will be no big deal. But for other schools, especially non-Power 4 schools (like SDSU and NDSU) it will have an impact. From my perspective (and the perspective of many others), the proportions in which the NCAA is reducing payments is unfair. Almost all of these settlement payments are going to Power 4 football and men’s basketball student-athletes. Why should SDSU be paying any of the settlement money? Put another way from a source in this ESPN article: "This is incredibly unfair and has a dramatic impact. I'm losing about 10% of my operating budget. Do I cut two staff members in order for money to go to Zion Williamson? Ninety percent of the money in the suit projects to go to Power 5 football and men's basketball players. The 40% payment for the power conference isn't proportionate." Put another way by the Ivy League executive director: “It feels like the NCAA is bailing out the biggest spenders, and conferences like ours are paying for the majority of the settlement.” The South Dakota Attorney General, Marty Jackley, has filed suit against the NCAA in response and is pushing for a jury trial to be held in Brookings County.
Also in the settlement was an agreement by the NCAA to allow a revenue-sharing model for student-athletes to be paid directly from the university. A group of lawyers decided that schools will operate under a cap of 22% of average revenues (based on the Power 4 conferences) from the previous year. The projected starting cap is $20.5 million (for every school) and can be distributed to student-athletes across all sports however each individual school sees fit. The cap will grow incrementally over time.
The details of the revenue-sharing model will vary from school to school. However, all schools will have the option to opt-in or out of this model. But opting in doesn’t mean a school needs to share the full amount. The cap, $20 million, is the maximum a school can share with its student-athletes. For example, schools like Texas and Ohio St. will opt-in and share the full $20 million cap as it is just a fraction of their overall revenues. But other schools may offer partial revenue-shares (maybe a school shares $10 million in revenue) or opt-out completely. Many are speculating that schools without football programs but strong in men’s basketball (think Creighton or Marquette) will share around a quarter of the cap.
Alongside the revenue-sharing model, roster limits and roster sizes will help shape how schools plan to operate in this new world. Those who opt into the revenue-sharing model must follow the roster size rules. Those who opt out will operate in the same way they currently do. But those who opt-in will now be able to decide how many scholarship players they want per team, as long as it is within a roster limit. There is now no cap on scholarships up to the roster limit. For football, this likely means a reduction in roster size but an increase in scholarships and potentially the end of walk-on student-athletes.
Football is obviously the focus of these discussions, but in reality, not much will actually change. The NIL/collective pay for play model has effectively been the same as the revenue-sharing model. Other sports, non-revenue generating sports, will be far more affected. Let's take for example, men's cross country (surprise, surprise). The new rules say that a school can roster 17 men's cross-country student-athletes. This means that schools could offer up to 17 full scholarships for cross-country. That's up from the previous average roster size of 15 and way up from the previous cross country/track and field shared scholarship limit of 12.6. Great news for the sport of cross country? Not so fast. Just because a school can increase the roster size doesn't mean it will. The SEC has already said that they will limit men's cross country rosters to 10. Considering the SEC (alongside the Big 10) is the biggest powerbroker in the NCAA, I am going to go out on a limb and say that there is likely going to be roster and scholarship reductions in all non-revenue sports, i.e. every sport but football, basketball and baseball in some instances. It’s not far-fetched to think that some sports — again, non-revenue sports — may even be cut.
ESPN’s estimated projected roster changes will reduce D1 opportunities by at least 4,739.
Main idea: Starting next year, some student-athletes will receive direct payments from their university while other student-athletes will be cut due to roster limits.
Questions Remain
There are huge questions related to revenue-sharing that still remain. The biggest one will be related to Title IX. While the federal government has said Title IX applies to revenue-sharing, litigation opportunities will arise regardless of what a school decides to do. Share the revenues equally? A football student-athlete will sue because they are not receiving enough of the revenue they generated. Tilt the revenues in favor of football student-athletes? Title IX lawsuit.
Main point: There’s never been a better time to be a class action lawyer.
The next big question is related to NIL and collectives. NIL, in its defined meaning, will remain but will collectives, now that schools can pay student-athletes directly, have the same power as before? Hard to say. Some have theorized collectives may be used to offer bonuses and incentives, and may even “help” circumvent Title IX laws.
"The real big differentiator right now is, for lack of a better term, the above-the-cap compensation. And I think everybody is hyper-focused on what that looks like, what those amounts need to be," said Walker Jones, a former Under Armour executive who now runs the Grove Collective, which supports Ole Miss teams. "If revenue share is going to even the playing field for the most part, what's going to be our competitive advantage going forward? I really think it's going to be the entities like ours that can get really creative and work within the framework to provide supplemental compensation."
For schools that opt-out of revenue-sharing, or follow a reduced form of revenue-sharing, collectives may be even more crucial as they could help fill in funding gaps. One interesting note, from this article, is that schools are looking to “purchase a player’s exclusive NIL rights — a significant and possibly binding deal and one that would eliminate all third-party payment as well.” Iowa State’s AD Jamie Pollard made this point (and several other interesting points) last summer. This article, from Yahoo Sports that includes an interview with one of the lawyers in the House case, speculates the settlement may include guardrails and systems to police NIL deals. They say the settlement could create:
• A reporting mechanism that will require athletes to report their third-party NIL deals — possibly a mandatory measure tied to a player’s revenue-share pay from the school and their eligibility.
• A requirement that third-party NIL deals must be what is termed “true NIL,” according to settlement documents.
• A definition of “True NIL” as based on to-be-developed “fair market value” data, said two people with knowledge of the concept. In the simplest terms, true NIL is real marketing NIL-based contracts with a corporation or business — not a booster.
• If an outside NIL deal is struck with a booster — a business owner, perhaps — the burden is on the school and/or athlete to prove that it is “true NIL,” with significant risks (eligibility maybe) if the deal is not.
Main point: Revenue-sharing may end the “Wild Wild West” era of NIL.
What will revenue-sharing mean for the transfer portal? Another great unknown but revenue-sharing has the potential to slow down the transfer portal, if ever so slightly, especially if multi-year contracts are used in revenue-sharing.
Main point: Revenue-sharing may slow the rate of transferring down, but it is very hard to say for certain.
A Potential Scenario For How This Plays Out
It’s very difficult to predict how this revenue-sharing model will play out but there’s an obvious trend: the rich will get richer. Revenue-rich schools — the SEC and the Big 10 — will opt-in and share the maximum revenue with their student-athletes. This will most likely create a competitive imbalance in recruiting that will eventually translate to the playing field. Some non-SEC/Big 10 schools will undoubtedly try and keep up, all the while looking for coveted invites into either the SEC or Big 10 (where the revenues from TV contracts dwarf all other leagues including the Big 12 and ACC). The biggest catalyst for systematic change will be when Clemson and Florida State eventually force their way out of the ACC. Once this happens, a two conference “Super League” won’t be far behind.
There is much, much more to be said on this topic. The next big thing to keep an eye on is Congress. Will they take action? Early signs show they just might. Providing the NCAA with some form of protection from future lawsuits — experts say an antitrust exemption makes sense — would go a long way in allowing them to actually enforce their rules and regulations.
Great info. Things slightly clearer now.