U.S. Dept. of Education releases guidance on proposed House settlement
How did nobody see this coming or prepare for it?
Each and year, right around National Championship time, the NCAA’s Board of Governors meets to go over the year. They talk about things like conference realignment, governance issues and more at the annual NCAA Conference.
But this year’s was different. As the Board of Governors sat in their meeting, everything changed.
The United States Department of Education dropped a bombshell that, frankly, I’m surprised took this long to go off. A nine page memo from the preeminent governing body for all things higher education took aim at Name, Image and Likeness (NIL) rules, especially at the proposed House v. NCAA settlement. Apparently there’s one thing everyone involved in making this decision didn’t factor into it - Title IX.
The case docket
Let’s back this up a little bit. If you don’t know what the House v. NCAA settlement is, you must not have been around here very long.
To make a long story short, House v. NCAA is the next landmark court case that will reshape college athletics. It is an antitrust suit brought against the NCAA stating that restricting athletes’ abilities to engage in NIL deals and endorsements are restrictive of a free market.
The two sides - the NCAA and the plaintiffs - came to a settlement agreement in May that will open the ways for direct athlete compensation from schools and destroy the illusion of amateurism the NCAA is clinging to. That settlement includes provisions like $2.78 billion in backpaid lost NIL wages, elimination of scholarship caps, a new enforcement agency and the aforementioned direct payments to athletes within a salary cap. In October, Judge Claudia Wilken gave her preliminary approval to the settlement to go forward. The settlement is projected to go into affect following a final vote on April 7, 2025 - the same day as the NCAA Men’s Basketball Championship.
More on the House Settlement and Revenue Sharing:
Title IX is an educational amendment aimed at prohibiting discrimination on the basis of sex by schools that receive Federal financial assistance. To us, that will impact any and every public school in America, from behemoths like Ohio State all the way down to your local community college. If even a cent of federal funding goes into that institution - Title IX is the government’s way of making sure there’s no discrimination there.
In terms of college athletics, Title IX has three compliance prongs that schools have to meet in order to stay compliant and avoid any penalties. Those are:
Participation: Men and women have to be offered equitable opportunities to participate in sports. The opportunities should be equitable based on the school’s enrollment. For example, a school that is 65% women and 35% men should have a breakdown of athletes similar to that ratio.
Scholarships: Men and women athletes receive scholarship dollars proportional to the participation ratio. If we follow the same example, 65% of scholarship money should go towards the women, while 35% should go towards men.
Other benefits: Schools have to provide equal treatment for men and women athletes in the cases of “(a) equipment and supplies; (b) scheduling of games and practice times; (c) travel and daily allowance/per diem; (d) access to tutoring; (e) coaching, (f) locker rooms, practice and competitive facilities; (g) medical and training facilities and services; (h) housing and dining facilities and services; (i) publicity and promotions; (j) support services and (k) recruitment of student-athletes.”
The memo
Now that we’ve recapped House v. NCAA and Title IX, it’s time to get into what’s actually going on here.
The memo, circulated by the Dept. of Education’s Office of Civil Rights - which oversees all Title IX compliance - takes particular aim at the second prong we noted above. The memo states:
Schools remain responsible for ensuring that they are offering equal athletic opportunities in their athletic programs, including in the NIL context. A school may violate Title IX if the school fails to provide equivalent benefits, opportunities, and treatment in the components of the school’s athletic program that relate to NIL activities.
The OCR goes further, pointing out that women athletes need to have equal access to publicity through their sports information department and promotions and support services.
But Section Four of the memo is where the real meat is hidden away. The OCR states:
As part of determining whether a school is providing equal athletic opportunity, OCR considers the total amount of athletic financial assistance made available by the school. Compensation provided by a school for the use of a student-athlete’s NIL constitutes athletic financial assistance under Title IX because athletic financial assistance includes any financial assistance and other aid provided by the school to a student-athlete that is connected to a student’s athletic participation; it is not limited to scholarships or grants.
That declaration that any school-provided NIL deals like proposed under the House settlement unequivocally forces the hand of the NCAA. These revenue sharing deals absolutely have to be Title IX compliant. Otherwise, the schools run the risk of major penalties instituted not by the NCAA, but by the United States Department of Education.
How did nobody plan for this?
Honestly, that’s the question I asked since the settlement terms became available. You can even read my thoughts in May when the settlement first got approved:
In the case of the House settlement and potential revenue sharing, we can see that it might fall under two points: Scholarships and Other Benefits. There is one main difference between those points of compliance, however. Scholarship money has to be equitable, while other benefits have to be equal.
This difference is where a lot of the Title IX questions around House are raised. We don’t yet know if revenue sharing will have to be equitable - based on enrollment and proportional between sexes based on student population - or equal - the same amount to each sex.
How in the world has that not been solved yet? We’ve had windows for complaints come and go. Judge Wilken has signed off on it. But there was no provisions for how Title IX would play into this?
You and I both know that these school-provided revenue sharing deals were only going to be earmarked for revenue-generating sports. Also known as football, men’s basketball, and women’s basketball at most schools, but also including specialized sports like baseball, men’s ice hockey and volleyball at others. That’s a lot of male athletes covered there, isn’t it?
The Athletic reported that Texas Tech officials have already divvied up their $20.5 million of revenue sharing - 74 percent, or $15.17 million, is earmarked for football. $3.5 million for men’s basketball. Women’s basketball gets $410,000 and the remaining $1.4 million goes to the other 12 sports sponsored by Texas Tech.
Yes, athletes in those major, revenue-driving sports are more popular and gain more attention, but we can turn back to the memo for that. OCR specifically points out publicity having to be equal - not equitable - for all sports. Sure, schools can’t control whether ESPN wants to televise a football game or a swim and dive meet, but the schools have to devote equal attention and publicity to men’s and women’s sports.
That’s something that, as a former SID, may be an adjustment. I know that some departments across the country split their sports and coverage into tiers - and have seen some of those tier breakdowns personally. Tier 1 sports included most of the revenue generating ones - football and men’s and women’s basketball. Tier 2 consists of those more specialized sports - baseball, volleyball, softball, and if the school is particularly noteworthy in an Olympic sport. But Tier 3 consists of the remaining Olympic sports that are fully non-revenue.
In those departments, the tiers correlate to how much coverage a sport gets. Tier 1 sports get the full-court press: coaches shows, constant stories, a more forward social media presence and more. Tier 2 sports get similar benefits, but are a second priority to Tier 1. Tier 3 sports, though, are the bottom rungs. A lot of times, those have minimal involvement from the sports information department as teams and coaches are self-sufficient on social media and the SIDs focus on media guides, press releases and noteworthy stories only.
Under this new guidance from OCR, that wouldn’t fly. The sports information formula would be forced to change. Just the one simple word of “equivalence,” a common refrain on that section, forces schools to reconsider how they’re approaching publicity for sports.
Now, to be clear, I don’t think this is going to be a major overhaul for sports information. Already, the sports are equally promoted on websites and the OCR goes further, saying things like unique circumstances of a student-athlete, competitive event or team accomplishments are among non-discriminatory means to promote one program over another. I would assume departments would lean on that heavily so as to not upset the apple cart too much.
Does this affect the settlement?
That’s the big question, isn’t it?
For most on the inside, there isn’t a major sense of panic, despite what is being reported about possible fallout.
Illinois Athletic Director Josh Whitman, who serves on the NCAA Board of Governors, told Yahoo! Sports’ Ross Dellenger, “We need some time to read, digest and understand it. We’ve been building plans on top of plans for some time now and this is just the most recent example of where we’re going to need to take some new guidance under advisement and figure out what if any changes we need to make to the strategy we developed.”
The lack of panic is not exclusive to the NCAA’s side of things. Jeffrey Kessler, the lead attorney for the House plaintiffs, told The Athletic, “This has no impact on the settlement at all.The injunction does not require the schools to spend the new compensation and benefits that are permitted to any particular group of athletes and leaves Title IX issues up to the schools to determine what the law requires. We resolved antitrust claims — not Title IX claims.”
It’s rare you see the two sides - especially including Kessler - agree on something. With that, you need to keep in mind that this guidance is brand new, released just last night. All the lawyers and legal departments haven’t had a chance to dig into it quite yet. There are no problems because everyone involved has only a base understanding so far. Expect there to be more chatter and rumbles soon.
But, when considering actions of the Department of Education, we also have to consider the government as a whole.
You see, the Department of Education falls under the executive branch of the government. Meaning, the President appoints the leader of the Department of Education.
With the Biden administration leaving power in just three short days on January 20, will the Trump administration uphold this guidance? You can take the idea that schools are waiting to see what Trump and his nominee, Linda McMahon, have to say before making any moves to correct or make adjustments to their revenue distribution plans.
There is precedent to assume that Trump may overturn this guidance. In 2017 after taking office, President Trump signed a resolution to overturn many Obama-era Department of Education acts. With incoming President Trump planning over 100 executive orders on his first day, it’s possible he takes aim at this one before the April 7 final hearing on the House settlement.
This may all turn out to be a big nothing-burger. Or, it could be a radical change to an already radical change. Either way, the House settlement is back on the docket and isn’t going anywhere anytime soon.
What I’m Reading:
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An idea hatched after years of 12-hour days glued to the couch, Tyler Schuster puts his passion for the sport on full display, delivering big-picture ideas, weekly previews and gambling nuggets directly to your inbox.
Tailgators Setup by Brian Lennon, John Crimella, and Gary McDaniel: I’ll be a little selfish on this one and plug a great college football podcast that I was lucky enough to join a few weeks back to talk UEC and SID Sports! Brian, John and Gary are a ton of fun to listen to and break down the weekend to come in a very easy to digest and entertaining way. Be sure to tune into the Tailgators' Setup podcast and subscribe for more great content from them!
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You could read the tea leaves when programs started loading up on flag football.