New era of college athletics arrives July 1 | Sports

CHAMPAIGN — Dramatic changes are coming to college athletics next week.

The approval of the House vs. NCAA settlement will usher in a new era starting July 1. Former athletes will be able to receive damages totaling $2.8 billion in the next decade. Current athletes will benefit from revenue sharing directly from the universities. And actual, enforceable guidelines for third-party name, image and likeness deals will be put in place.

The entire landscape of college athletics will evolve, and it’s a new way forward Illinois athletic director Josh Whitman is adamant will work.

“I have every expectation it will work,” Whitman said Thursday during his annual media roundtable. It was the first time he discussed the House case publicly after it was approved June 6 by U.S. Senior District Judge Claudia Wilken.

“I was in Orlando a couple weeks ago in some meetings, and the message in those rooms was, quite simply, we need it to work and we should expect it to and want it to work,” Whitman continued. “If we want it to work, the chances are really good it will. If we want it to fail, the chances are really good it will fail.”

The revenue sharing aspect of the House settlement is more straightforward than the changes in third-party NIL. Power conference institutions in the Big Ten, ACC, Big 12, SEC and Pac-12 are required to share revenue with their athletes. How much of this year’s $20.5 million they share is at their discretion, but Illinois will distribute it all, as is the expectation for the entire Big Ten.

How those dollars are distributed is left to the discretion of each individual program. The rule of thumb that’s evolved at most institutions is a 75-15-5-5 split, with 75 percent going to football, 15 percent to men’s basketball, 5 percent to women’s basketball and 5 percent to either a fourth sport or split in some way.

Whitman said Illinois’ distribution would be in those ranges, with football, men’s and women’s basketball and volleyball receiving more than 98 percent of the shared revenue. Investment elsewhere across the department would be in the form of an increase in scholarships to the other 17 programs the Illini sponsor. New scholarships that cut into the $20.5 million total.

“In the new environment, we can compete for student-athlete talent by adding additional scholarships as we deem appropriate or necessary,” Whitman said. “We’re not going to share the actual numbers, but I will say we are intending to make meaningful scholarship investment in every sport that we sponsor. That is something that is exciting for our coaches and I know is exciting for our student-athletes. We think making a meaningful investment in incremental scholarship growth is an important part of our plan and ultimately should give many of our programs some level of competitive advantage.”

The initial revenue share is set at 22 percent based on average athletic revenue across the power conferences. That generated $20.5 million to share this coming year — a total that will increase by 4 percent annually. Whitman said the overall revenue sharing percentage would be reviewed every three years. Significant changes in revenue — like when the Big Ten negotiates its next media right’s deal when the current $7 billion contract runs out in 2029-30 — could change what percentage is shared with athletes.

Illinois’ Division of Intercollegiate Athletics is on the hook for the entire $20.5 million this coming year, with Whitman making a point to note it would not come from state dollars. The DIA is also phasing out the student fee it received each semester, which will begin in the next fiscal year and continue toward a self-sufficient operation relying on media distributions, ticket sales, sponsorships and philanthropic giving.

With revenue sharing geared toward Illinois’ four ticketed sports, Whitman said approximately 150 athletes of the 450 total would sign contracts assigning their NLI rights to the university in return for revenue sharing payments. Those payments are expected to begin in July.

“These are not contracts for services meaning that the NCAA rules that prohibit pay for play continue to be in place,” Whitman said. “We are not paying these athletes to play football or basketball or volleyball for the University of Illinois. We are purchasing their NIL rights. It’s a very important distinction that maybe has more legal meaning than public meaning.

“This agreement gives the university exclusive access to use their NIL to promote a handful of things — the University of Illinois, the Division of Intercollegiate Athletics, the Big Ten Conference and the NCAA. That’s the only place we have exclusive use of their NIL.”

Those deals assigning NIL rights to the university will begin as one-year contracts. Whitman said the opportunity exists to extend multi-year contracts, and that could be Illinois’ preference moving forward. Those contracts grant exclusive NIL rights to the university, making the transfer process in the event the Illini move to multi-year deals more complicated.

“The only way, under the rules, a school can pay a student-athlete is to pay them for their NIL rights,” Whitman said. “Our student-athletes are giving us exclusive use of their NIL rights. If they want to transfer to another school, they can transfer there, but that school has no mechanism to pay them unless we reach some agreement between the three of us — our school, the next school and the student-athlete.”

Beyond revenue sharing, athletes can continue to benefit from their NIL with third-party deals, which have to be approved through NIL Go, which was created by the College Sports Commission. The CSC was founded by the power conferences who were the defendants in House vs. NCAA as a means to facilitate revenue sharing and ensure third-party NIL deals comply with the new rules in place.

Any third-party NIL deal worth more than $600 has to be submitted through NIL Go, with Deloitte managing all reviews. Unlike the previous iteration of NIL, which had no enforceable rules, all deals in the future must have a valid business purpose with compensation falling within a reasonable range for said purpose.

The CSC will also be in charge of enforcing those new NIL rules. Rules in place to prevent circumvention of the cap on revenue sharing.

“I can’t emphasize enough how important that is to the overall success of this project,” Whitman said. “We have to stop thinking about enforcement through the lens of what we have always known, which is the NCAA. The NCAA had a membership-drive, committee-heavy process. Highly bureaucratic. Highly procedural. It took extended time and didn’t always come back with the most consistent results.

“The charge, the challenge, the directive, we have given to (the CSC) is investigate fast, punish hard. In order for this to work, that has to be the mandate. We want the College Sports Commission to move quickly and to swing a big hammer. We need to demonstrate early that this is different than what we have always known from the NCAA.”

The idea is the risks to trying to circumvent the revenue sharing cap will outweigh the rewards of the under-the-table dealings that have existed throughout the history of college athletics. Whitman declined to go into detail about what punishments the CSC might hand down, but said he expected them to be more forward-looking than retroactive like the NCAA vacating wins and championships.

“We’re asking for (the CSC) to function in that way so that this new project we are putting together — probably the most ambitious, comprehensive project in the history of college athletics — can work,” Whitman said. “We all understand rule breaking has happened in college athletics forever. It will continue to happen in college athletics forever. This is not a perfect system that will rid college athletics of all bad actors, but we think it can cut down, dramatically, on that level of badly-intentioned activity. If we’re able to do that, I think that’s a great win for college sports.”