Florida higher-education leaders want to quickly hear how universities need to address a pending national legal settlement that is expected to lead to schools facing at least $22.5 million a year in new athletic-department costs.
After changes during the past few years that have allowed athletes to get paid for use of their names, images and likenesses, or NIL, a final hearing is scheduled in April in a lawsuit known as House v. NCAA. The tentative $2.78 billion settlement would allow athletes to be paid directly by universities, allow athletes who played at the Division I level since at least 2016 to recoup money from NIL deals they had been barred from entering and establish a revenue-sharing system.
Members of the Florida university system’s Board of Governors on Thursday expressed a need to provide some short-term financial flexibility for universities to compete against major schools in other states as the landscape changes. But they also cited a need to not use money directed toward academics.
“The last thing for us at the University of Florida that we want to do, and I think my president also agrees with me, is to take money from the education of our kids,” said Mori Hosseini, chairman of the University of Florida Board of Trustees. “That's something you should not allow.”
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Brian Lamb, chairman of the system’s Board of Governors, said he hoped to bring the issue back to the board in February or March with the analysis from the universities.
State Education Commissioner Manny Diaz Jr. said an “arms race” is underway as some universities outside Florida have already started to address the pending changes. As an example, the University of Tennessee added a 10 percent “talent fee” on tickets to pay athletes, according to information provided to the Board of Governors.
The changes would require athletic departments to share an estimated $22.5 million a year with players, which could boost annual athletic budgets for each school by at least $25 million a year.
“The hope is that it provides, for the vast majority of student athletes, an opportunity going forward,” Jared Tidemann, NCAA senior counsel for sports administration and government affairs, said. “I think the number I've heard is potentially up to like --- across the 10-year period --- up to like $20 billion in new benefits.”
The changes also would replace limits on scholarship amounts with new caps on roster sizes, which could mean football programs go from 85 scholarships to 105, and baseball programs would be increased from 11.7 scholarships to 35, Tidemann said.
The new system is expected to be in place July 1.
But the settlement is expected to face challenges, including because of its potential effects on women’s sports. That could include questions about violations of Title IX, a landmark federal law that prevents discrimination in education based on sex. South Dakota has already filed a complaint, contending the deal would unfairly put a disproportionate share of costs on smaller schools.
Florida State University Athletic Director Michael Alford told the state board Thursday that talks have included eliminating sports to be able to free up $22.5 million.
Amy Hass, University of Florida deputy athletic director, said as officials “scramble” to address the pending settlement, UF has explored changes in ticket prices, sponsorship marketing opportunities and even concerts to generate additional revenue, with the goal to maintain current sports, including those that do not produce sizable revenue.
“I think for all of us, our goal is not to have to eliminate the experience athletes are getting and eliminate sports that, even though they might not be generating revenue, are certainly generating value and prestige for our state and our universities,” Hass said.
Orlando Magic CEO Alex Martins, who is chairman of the University of Central Florida Board of Trustees, advocated “maximum flexibility” as Florida university leaders look to remain competitive in athletics.
“Some states are allowing, like Ohio State University, to run a $36 million deficit in their athletic program,” Martins claimed. “I'm not advocating for that, but that's what we're up against.”
Alan Levine, a member of the university system Board of Governors, said the University of Tennessee’s 10 percent talent fee hasn’t slowed demand for tickets while generating about $8 million.
“The biggest opportunity for revenue is the fans that are actually willing to pay,” Levine said. “And that doesn’t even get you halfway there. So there is a big, big, big gap.”
