Revenue sharing is now allowed by the NCAA. How will Penn State be impacted?
A new era of college athletics is here, with the fallout from the House v. NCAA settlement going into effect Tuesday. The case was originally brought by Arizona State swimmer Grant House and TCU basketball player Sedona Prince in an effort to get name, image and likeness damages.
The settlement of the case will have a major impact on Penn State — and every other university playing Division I sports — moving forward.
What does it all mean, and what are the implications for Penn State? Let’s take a look.
What is revenue sharing?
Athletic departments will now be allowed to share revenue with athletes, but it comes with a cap. Each department will be able to share an estimated $20.5 million, a number that will go up each year. Importantly, that does not mean every school will have to share that full amount, and not every athletic department will based on their financial situation. However, it is expected that all Power Four departments (schools in the Big Ten, Big 12, ACC and SEC) will share the fully allowed amount — that includes Penn State.
Where will the money go?
Most of the money from the revenue sharing is expected to go toward football and men’s basketball programs — the two programs in most athletic departments that are profitable. However, it is not required that schools allocate specific amounts to each program, and Penn State athletic director Pat Kraft said the Nittany Lions’ allocation could vary.
“I know the follow-up question is, ‘Well how are you spending that money,’” Kraft said in February. “Football, men’s and women’s basketball, wrestling obviously. Then you get into the space of women’s soccer, women’s volleyball. We’re trying to be able to manage the money so that if we need to move on someone, no matter what the sport is, we have the ability to. Hey if there’s the number one fencer in the world and we need to go use rev share to maybe tilt it our way, we’re gonna be able to do that.”
What can we expect at Penn State?
The Nittany Lions will fully fund revenue sharing and will add scholarships, as Kraft previously said.
“One of the biggest pieces to the House case is pulling the restriction of scholarships off,” Kraft said in February during a media availability. “That’s huge. That allows us to offer scholarships to all of our athletes if we could afford it. ... We have the ability now to not only help our teams in the space of rev share but also put a lot more of our student-athletes, if we do it right and we raise the right amount of money, on scholarship. And that is a huge advantage for us.”
And as the athletic director also noted, the change in how NIL deals work could end up being an advantage for Penn State.
“In this new system, you’re going to have to show fair market value,” Kraft said. “And this is where the power of Penn State is a huge asset. Because fair market value for the starting quarterback at Penn State is pretty good. And we’ve got to lean into that with our business partners.”
What is the impact on Name, Image and Likeness (NIL) earnings?
NIL earnings have largely been connected to recruiting players to campus and less connected to actual revenue generated for name, image and likeness earnings — even if that was explicitly outlawed by the NCAA when NIL earnings were legalized in 2021. That is supposed to change moving forward. Athletes will have to go through a third party called NIL Go for all NIL deals above $600 in order to make sure they are actual business partnerships.
Who is in charge of all of this?
The College Sports Commission (CSC) has been established to oversee all of the changes that come with the House Settlement. Bryan Seeley, who was previously Major League Baseball’s executive vice president of legal and operations, was named the CEO of the CSC and is expected to become “one of the most prominent figures in college sports,” according to ESPN.
Seeley and the CSC will be in charge of enforcement — meaning it will decide when rules are broken and what the punishments for those infringements are.
What else will change?
The biggest non-revenue related change will be to roster and scholarship limits. There are no longer scholarship limits in any college sports, with programs able to give scholarships to any athlete who makes a team. However, roster limits have shrunk because of that, which will impact football and other sports. Football teams had as many as 140 players on their roster, according to Yahoo! Sports, but that number will now drop to a roster limit of 105. Men’s basketball will now be able to scholarship 15 players instead of 13 and wrestling will be able to do the same for 30 athletes, among other changes to roster sizes.
And while scholarship limits for programs have increased to the full roster size, that does not mean all athletes will have full scholarships. Programs and athletic departments are not required to dole out scholarships to every athlete, although not doing so could be a significant competitive disadvantage.
