After months of debate and litigation, a federal judge finally granted approval to a settlement that is set to change the landscape of college sports as we have known them.

This new ruling will allow schools to directly pay their athletes for the use of their name, image, and likeness, subject to an annual cap based on a percentage of a defined set of Power Five Athletics department revenues. These payments can begin as early as July 1. The annual cap for revenue sharing for the upcoming 2025-26 athletic season is estimated to be $20.5 million. While that number has not been finalized, the cap is set to increase annually by 4%.

For schools that opt in to paying their athletes, the e NCAA’s current system of sport-by-sport athletic scholarship limits will be scrapped in favor of sport-by-sport roster limits. Initially feared to go into effect immediately, these roster limits will delay full implementation of the roster limits allowing some athletes to be grandfathered in. For football, the new roster limit will be 105 while basketball will have 15, baseball 34, and softball 25. Other sports also have roster limits, as well.

Additionally, athletes will continue to be allowed to make name, image, and likeness deals with entities other than their schools as has been the case for several years. Now, there will be an effort to bring greater scrutiny to those arrangements under the direction of a new entity called the College Sports Commission. Regardless of whether their school opts in to making NIL payments, any Division I athlete who has an NIL deal(s) worth $600 or more will have to report those deals to a system called NIL Go. The data will then be evaluated to determine whether the deal has a valid business purpose and is within a reasonable range of compensation.

Obviously, with this new landscape shifting ruling, there is a lot left to be sorted out and likely to still be altered in the courts for some time to come, but this marks the formal beginning of the largest transformation in college sports history we have likely ever seen.

How will this affect Liberty?

This is something that will be unpacked over the weeks and months to come as Liberty, Conference USA, and other schools and conferences adjust to this new landscape. First of all, schools must opt in to this new revenue sharing model. Nearly all Power Four conferences and their members will opt in. It can be expected that the majority of the Group of Five members will also opt in, including Liberty.

One thing to note, just because a school opts in, it does not mean that institutions will and can share revenue with its athletes all the way up to the cap. Liberty, the rest of CUSA, and most of the G5 will not be able to pay its athletes all the way up to the cap each and every year.

Also, even though Liberty will have to abide by the new roster limits for each sport this does not mean all of those spots will be scholarship. The previous NCAA scholarship limit for football was 85 and men’s basketball was 13. Sources have confirmed to ASOR that Liberty will not increase its scholarship limits in these sports all the way to the roster limit as the Flames are still expected to have some walk-on spots on its rosters.

How to distribute this money?

Each school can distribute the revenue they have deemed to share with its athletes how they see fit, but most power conference programs are reportedly planning to distribute 90% to football and men’s basketball. This is expected to be approximately $13-16 million for football and $2-4 million for men’s basketball this upcoming season with the remaining shared with women’s basketball, baseball, softball, and all other Olympic sports, for t hose sharing to the full cap. It can be expected that Liberty will likely follow a similar model

As mentioned above, this revenue sharing model, which many are referring to as internal NIL, is not a replacement to the current NIL structure we have seen in recent years but instead is in addition to it. It still remains to be seen how this new ruling will affect NIL Collectives, but NIL deals with outside business will continue. Of course, if those deals are $600 or more they must be reported through the new NIL Go system. This is the first formalized NIL monitoring system which will help curb some of the free for all NIL deals we have seen in the past.

How to pay for these deals?

Adding millions of dollars to athletic budgets is not going to be easy, especially for those not at the Power Four level who are already operating at a deficit. While it remains to be seen how these funds will be paid for at Liberty, some schools are planning on charging talent fees to ticket customers. Others are raising student athletic fees. One thing is for certain, schools will be looking for additional ways to raise revenue. We could see ticket prices raised and schools re-visiting donation levels that will be required for season ticket purchasing rights.

There will also be some expense cutting. Some schools have even announced layoffs to its athletic department employee base while others have asked their coaches to cut their budgets.

Other impacts

This will have a big impact at the mid major and Group of Five level, obviously. Take, for example, the schools that don’t have football teams – most notably in the Big East and A-10. Those schools will be able to have larger revenue sharing amounts for men’s basketball, think of a VCU. Another example is High Point. Just this past spring we saw the Panthers able to nab several basketball transfers, including Owen Aquino. While Liberty has a higher total revenue sharing amount than High Point, the Panthers have a larger revenue sharing budget for men’s basketball.

We could also see a school with football, maybe a Western Kentucky or Middle Tennessee, opt to give their men’s basketball program a larger cut while allocating less for football.

It will be interesting to see how this impacts the balance of power across the college athletic landscape as the months and years go by.

Questions?

Are there remaining questions you have for how this will impact Liberty moving forward that we did not cover here? Please let us know and we will answer them.