The ‘long form’ of the negotiated settlement of the three huge lawsuits by former players against the NCAA was delivered to a federal judge yesterday for approval. It may take a little time for the judge to approve the settlement, no one is asserting that it will be materially changed.
The important part of the settlement which had been rumored earlier is the formula for calculating the maximum amount of revenue sharing which schools will be able to pay their athletes. This pool is a portion of athletic department revenues that can be shared with student athletes. Without addressing the questions of which athletes will share in the pool or how much Michigan might plan to share, maybe we should ‘run the numbers’ based on the language from the settlement.
Using the language from the settlement, the maximum amount that Michigan could share with athletes in the upcoming year would be between $50-55 million.
This isn’t new money, it’s a share of existing athletic department revenues. It’s a maximum amount that can be shared. Michigan or other schools can decide not to share any of the defined revenue streams. Some schools will decide to share their maximum amounts.
This definition of maximum revenue sharing has nothing to do with NIL. NIL payments are separate from the sharing of athletic department revenues defined by the settlement.
You can be certain that our athletes have read the reports on the settlement language and have probably run the numbers themselves. If you simply divided the maximum pool by the total number of our men’s and women’s team athletes equally, each of our 1,032 student-athletes would receive a little more than $235,000 next year.
Now for the key question. Those revenues are being used to fund athletic department expenses. Our athletic department budgets are separate from the University General Fund. Athletics doesn’t request funding from the University, nor does it return any revenues that go unspent.
There are several questions that result from this settlement but the key one given the way our athletic department is financed is — if substantial amounts of athletic revenues are shared with student-athletes, what athletic department expenditures get cut?
Will we eliminate sports, reduce the size of athletic staffing, hold back on facilities improvements, pay employees less, raise ticket prices? One thing is certain — the student athletes will have calculated what they can be paid and they’ll be looking to ‘get theirs’.
How are the payments to athletes funded? What gets cut?
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