Interesting tidbit about revenue sharing

[retired711]

This is from a story about the upcoming hearing on approval of the settlement in House v. NCAA, which provides for schools to share revenue --that is, pay -- athletes:

"Revenue-sharing will be in addition to (and not in place of) athletic scholarships, which cover tuition, housing, meal plans, health resources and other student benefits and does not count NIL deals with third-parties, either. When revenue-sharing is coupled with full scholarships and other benefits provided by schools, the share to some D-I athletes—the plaintiffs argue—will be “comparable to the 50% revenue-sharing in professional sports.”

https://www.sportico.com/law/analysis/2025/house-v-ncaa-settlement-objections-1234844919/

 

[-RUFAN4LIFE-]

It was always meant to be in addition to scholarships and NIL. Though some convinced themselves that it would replace NIL.

 

[DJ Spanky]

Revenue-sharing will be in addition to (and not in place of) athletic scholarships, which cover tuition, housing, meal plans, health resources and other student benefits

Which begs the question, does that make ALL of that now taxable income for them?

 

[-RUFAN4LIFE-]

Revenue sharing will be taxable and NIL is already taxable.

 

[retired711]

Which begs the question, does that make ALL of that now taxable income for them?

Certainly revenue-sharing money will be taxable just as NIL payments are now. But scholarships (including athletic scholarships) aren't taxable and I don't see any reason why that will change.

 

[retired711]

It was always meant to be in addition to scholarships and NIL. Though some convinced themselves that it would replace NIL.

It will replace NIL only in part: entities or individuals "closely associated with the schools" can engage in NIL agreements with athletes only if it can be shown that the agreements serve a valid business purpose rather than being pay to play. But all other NIL agreements are fine.

I had been unsure how scholarships would be affected, and so I found the item I posted interesting.

 

[LETSGORU91]

It will replace NIL only in part: entities or individuals "closely associated with the schools" can engage in NIL agreements with athletes only if it can be shown that the agreements serve a valid business purpose rather than being pay to play. But all other NIL agreements are fine.

 

[WhichReligionIsRight]

It was always meant to be in addition to scholarships and NIL. Though some convinced themselves that it would replace NIL.

I think the settlement changes NIL such that boosters and other third parties give money to the schools and the schools administer the NIL funds.

 

[-RUFAN4LIFE-]

I think the settlement changes NIL such that boosters and other third parties give money to the schools and the schools administer the NIL funds.

That's an immaterial change. NIL will still be a major issue for schools with cheap fan bases.

 

[DHajekRC84]

There was another tidbit for the record. This is based on a Football team having 85 ships. IF a school chose to go up to say 105 the cost of those extra ships would go against the $20.5mm.

I didn't see anything about bball on this but that's ok. As others have thought/suggested I can see teams going with less.

 

[MrsScrew]

It will replace NIL only in part: entities or individuals "closely associated with the schools" can engage in NIL agreements with athletes only if it can be shown that the agreements serve a valid business purpose rather than being pay to play. But all other NIL agreements are fine.

Serious question: can anyone tell me any "business purposes" any RU athlete, from any sport, engaged in?
I think I remember a couple of football players doing some construction commercial, but other than that, isn't it all just pay to play?

 

[retired711]

Serious question: can anyone tell me any "business purposes" any RU athlete, from any sport, engaged in?
I think I remember a couple of football players doing some construction commercial, but other than that, isn't it all just pay to play?

My guess is that you're right -- and now that NIL from boosters is being confined to commercial purposes, all third-party NIL is going to go to stars like the gymnast Olivia Dunne. (She has partnerships with a number of brands and has been valued at $4.1 million.) So the result of all the litigation is that athletes will be directly compensated by their schools in addition to receiving scholarships.

 

[retired711]

I think the settlement changes NIL such that boosters and other third parties give money to the schools and the schools administer the NIL funds.

But the school can spend only 22% of revenues on NIL up to the $20 million cap. Donations will principally be important as a way to make up for the revenue that will go to athletes. If Rutgers has (to pick a number) $150 million in revenue, and is spending $20 million on NIL, then Rutgers is going to want to raise $20 million to make up for the hit on its budget from paying players.

 

[Leonard23]

This is from a story about the upcoming hearing on approval of the settlement in House v. NCAA, which provides for schools to share revenue --that is, pay -- athletes:

"Revenue-sharing will be in addition to (and not in place of) athletic scholarships, which cover tuition, housing, meal plans, health resources and other student benefits and does not count NIL deals with third-parties, either. When revenue-sharing is coupled with full scholarships and other benefits provided by schools, the share to some D-I athletes—the plaintiffs argue—will be “comparable to the 50% revenue-sharing in professional sports.”

https://www.sportico.com/law/analysis/2025/house-v-ncaa-settlement-objections-1234844919/

Sad that revenue sharing can't include tuition, room and board, (full cost of attendance), and all the other free amenities already provided, such as additional food/training tables, medical care, transportation, gear, etc.

 

[retired711]

There was another tidbit for the record. This is based on a Football team having 85 ships. IF a school chose to go up to say 105 the cost of those extra ships would go against the $20.5mm.

I didn't see anything about bball on this but that's ok. As others have thought/suggested I can see teams going with less.

The cost of the scholarships doesn't count against the $20.5 million. But compensating the players does, and the more players, the more the school will have to shell out in compensation

 

[retired711]

Sad that revenue sharing can't include tuition, room and board, (full cost of attendance), and all the other free amenities already provided, such as additional food/training tables, medical care, transportation, gear, etc.

My *guess* is that it was decided that it was too hard to value those items. But my *guess* is that the fact that athletes receive those benefits was considered by the parties in determining how much each school could pay the players.

Keep in mind that the NCAA was in a very poor position in the negotiations. Most commentators think that a court would hold the NCAA's NIL restrictions to be anti-trust violations -- and a plaintiff can collect *treble* damages from a defendant found to have violated anti-trust laws.

 

[DHajekRC84]

The cost of the scholarships doesn't count against the $20.5 million. But compensating the players does, and the more players, the more the school will have to shell out in compensation

I'll get back to you on that. It's in the NIL link I've posted at least 4 times now. As I said the first 85 don't. Over that yes.

If I'm wrong please explain this to me..

House-NCAA settlement could clean up wild west of NIL

There may be a silver lining in an unlikely cloud hanging over the darkened world of collegiate athletics.

floridastate.rivals.com

$2.5 million of (the $20.5 million) can go into increasing scholarships,” Alford said.

Within the House Settlement is a provision that allows schools to increase the number of scholarship opportunities to the full roster of players and count up to $2.5 million of those scholarships towards the $20.5 million cap. Rather than 85 scholarships in football with 20 “walk-ons” with no scholarship aid, FSU has the option to now fund full scholarships for all 105 football players if it chooses

 

[retired711]

I'll get back to you on that. It's in the NIL link I've posted at least 4 times now. As I said the first 85 don't. Over that yes.

If I'm wrong please explain this to me..

House-NCAA settlement could clean up wild west of NIL

There may be a silver lining in an unlikely cloud hanging over the darkened world of collegiate athletics.

floridastate.rivals.com

$2.5 million of (the $20.5 million) can go into increasing scholarships,” Alford said.

Within the House Settlement is a provision that allows schools to increase the number of scholarship opportunities to the full roster of players and count up to $2.5 million of those scholarships towards the $20.5 million cap. Rather than 85 scholarships in football with 20 “walk-ons” with no scholarship aid, FSU has the option to now fund full scholarships for all 105 football players if it chooses

Oh, I didn't know that the additional scholarships count against the cap -- thanks! I wonder how many schools will use up their cap money on scholarships for kids who are not that likely to turn into starters.

 

[hinson32]

Serious question: can anyone tell me any "business purposes" any RU athlete, from any sport, engaged in?
I think I remember a couple of football players doing some construction commercial, but other than that, isn't it all just pay to play?

I'm pretty sure Riley Tiernan had some, but I don't remember what.

 

[robcac26]

But the school can spend only 22% of revenues on NIL up to the $20 million cap. Donations will principally be important as a way to make up for the revenue that will go to athletes. If Rutgers has (to pick a number) $150 million in revenue, and is spending $20 million on NIL, then Rutgers is going to want to raise $20 million to make up for the hit on its budget from paying players.

I think part of the reason why some people thought revenue sharing is replacing NIL is because people keep referring to the revenue sharing as NIL. The money they're making from schools isn't for their name, image, and likeness, the schools are essentially paying them as employees. NIL and the direct pay from the schools are two separate things.

 

[robcac26]

Serious question: can anyone tell me any "business purposes" any RU athlete, from any sport, engaged in?
I think I remember a couple of football players doing some construction commercial, but other than that, isn't it all just pay to play?

If that starts being enforced, it seems like an easy workaround though--just get the athlete to pose for a picture to be used in ads or something quick and easy like that.

 

[rutgersal]

If that starts being enforced, it seems like an easy workaround though--just get the athlete to pose for a picture to be used in ads or something quick and easy like that.

That clause was put in so the Ohio States could continue to pay players whatever they want.

 

[-RUFAN4LIFE-]

If that starts being enforced, it seems like an easy workaround though--just get the athlete to pose for a picture to be used in ads or something quick and easy like that.

Or they will be doing appearances to sign autographs at these businesses. Many ways to get around it.

 

[PSAL_Hoops]

Basic example (and I don’t know the answer).

Will boosters be able pay AAU clubs behind the scenes to “hire” players to make cameo appearances at their camps this summer or sign autographs for kids at events they charge for, etc.? It’s a very easy argument to make in NJ (at least for Deloitte purposes) that brand names increase the price parents are willing to pay for youth camps. The ones that promise a star from Rutgers, a retired Knicks player or whoever will show up always charge more. A week long 75 kid camp - let’s say they charge $100 more. Theoretically - that could be $7,500 right there to show up once or twice. Now picture sporadic youth clinics that include autographed balls signed by a player for each kid.

These are small time examples but they add up. There are plenty of ways to disconnect booster contributions to these entities from Rutgers. A booster could be giving to them for a host of reasons - a grandson playing for the club. Family friends kid - whatever. Go prove a connection to Rutgers. Deloitte likely wont be able to. Now take this example and put it on steroids for the big time programs. There will be creative ways to circumvent the rules is my guess. The question is only how hard will it be?

 

[retired711]

I think part of the reason why some people thought revenue sharing is replacing NIL is because people keep referring to the revenue sharing as NIL. The money they're making from schools isn't for their name, image, and likeness, the schools are essentially paying them as employees. NIL and the direct pay from the schools are two separate things.

The reason the NIL term is still being used is that the compensation by the schools is being labeled in the settlement agreement as payments in return for the school's use of the athletes' NIL. That makes sense (at least sort of) because the litigation is about the NCAA's past and present restrictions on NIL. The school's use is not exclusive: athletes can also make NIL deals with third parties. The only exception is that, as I've said above a couple of times, NIL deals between athletes and boosters are allowed only if they have a valid business purpose rather than just being pay-to-play.

 

[retired711]

If that starts being enforced, it seems like an easy workaround though--just get the athlete to pose for a picture to be used in ads or something quick and easy like that.

The question to be arbitrated will be: "is there really a business purpose to that?" , e.g. are you really going to use the picture in your ads and why? The workaround is not going to be that easy.

 

[retired711]

That clause was put in so the Ohio States could continue to pay players whatever they want.

The original agreement contained greater restrictions on third party NIL, and the judge (a graduate of Stanford and BerkeleyLaw) made the parties relax them because she thought they unduly hindered athlete's ability to make money on their NIL.

 

[RUBlackout]

I'm pretty sure Riley Tiernan had some, but I don't remember what.

Crazy part is she could have been in the same stratosphere as Livvy Dunn but she chose not to sell out to sex appeal

 

[retired711]

Crazy part is she could have been in the same stratosphere as Livvy Dunn but she chose not to sell out to sex appeal

Here's some information (a little old) on Riley Tiernan's NIL. She also had an NIL deal with the Rutgers collective following her freshman year.

https://sports.yahoo.com/rutgers-athlete-next-olivia-dunne-100705608.html

And here's her Instagram link: