Revenue Sharing in College Athletics

Clemson University's Football Facility represents the type of high-end facilities that wealthy programs can afford.

In the evolving landscape of college athletics, the introduction of revenue sharing represents a significant shift in how we value student-athletes' contributions. The $2.78 billion settlement  between the NCAA, its conferences, and former college athletes has opened the door to direct athlete compensation beginning in 2025. While this development marks progress toward fairness in college sports, we must acknowledge a concerning reality: without proper protections, smaller schools risk being left behind in this new era.

As someone who has followed college athletics closely, I believe revenue sharing is fundamentally a step in the right direction. For decades, student-athletes generated billions in revenue while receiving only scholarships and stipends in return. The ability for schools to share up to $20.5 million annually with their athletes acknowledges their role in creating value. However, this system threatens to widen the already substantial gap between wealthy Power 4 programs and smaller institutions that lack comparable resources.

The reality for smaller institutions is stark. As Big Sky Commissioner Tom Wistrcill noted, many schools in his conference will be forced to pay "$250,000 to $350,000 annually for ten years" in settlement damages - a significant burden for already cash-strapped institutions. While Power 4 schools can easily afford to pay athletes up to the cap, smaller Division I programs simply cannot match these resources.

This financial disparity creates several concerning outcomes. First, smaller schools may be forced to cut Olympic sports programs to afford settlement payments. Second, the recruiting landscape will become even more unbalanced, with top talent gravitating toward schools offering the most lucrative compensation packages. Finally, the competitive gap in college athletics will widen further, potentially diminishing the excitement and unpredictability that makes college sports special.

Consider the perspective of Portland State men's basketball coach Jase Coburn, who acknowledged that the changing rules around athlete compensation have affected "recruiting, budgets and program stability." For programs like his, competing against schools with vastly greater resources presents an increasingly difficult challenge.

Despite these challenges, there are viable strategies that could help smaller schools remain competitive in this new landscape. Here are several protections that could level the playing field:

1. Merchandise Licensing Revenue Models

One promising approach involves smaller schools acquiring their athletes' NIL licensing rights for merchandise. As Sports Illustrated reported , non-Power 4 schools can unlock new revenue streams by redirecting royalties earned from merchandise sales to NIL revenue-sharing. This strategy allows smaller schools to "move what would be 'above the cap' payments at larger schools in-house and use that revenue strategically."

The professional sports world offers useful models. The NFL Players Association uses a 67/33 split for jersey sales, with 33% distributed equally among all players. MLB takes an even more equitable approach, with all players receiving equal shares of licensing revenues based on service time. These models ensure that even athletes who don't sell many jerseys benefit from the collective marketing power of the league.

Ashton Jeanty of Boise State

2. Roster-Wide Distribution

Smaller schools should consider more equitable distribution models rather than concentrating NIL funds on a few star athletes. When Boise State running back Ashton Jeanty topped Campus Ink's NIL Store jersey sales last year, it demonstrated how a star player from a smaller school can generate significant revenue. By distributing some of these earnings across the entire roster, schools can improve team cohesion and ensure all athletes benefit.

3. Direct Negotiation with Merchandise Companies

By purchasing athletes' NIL rights upfront, smaller schools could negotiate directly with merchandise companies without expensive third-party intermediaries. This approach could reduce transaction costs and increase the total compensation reaching athletes' pockets.

While financial incentives are increasingly important in college athletics, we shouldn't overlook the continued significance of culture, community, and educational opportunities. As track athlete Sabrina Oostburg noted , "I think the bigger question we're looking at is, how do smaller schools keep up with the bigger schools? I think that's where you really have to lean into your strengths as a school."

Smaller schools must emphasize their unique advantages - closer student-athlete relationships with coaches, more intimate campus communities, and specialized academic programs. The military academies provide an excellent example of this approach. Despite not offering NIL collectives, they continue attracting talented athletes by emphasizing their distinctive culture and the long-term career benefits they can provide.

Facilities also remain crucial in this equation. While NIL collectives have diverted some funds that previously went toward facilities, schools can still prioritize investments in revenue-generating spaces, multi-purpose facilities, and environments that foster team cohesion. These investments create daily value for student-athletes beyond direct compensation.

The transition to revenue sharing represents a fundamental shift in college athletics, but it doesn't have to spell doom for smaller programs. With thoughtful protections and strategic approaches, these schools can remain competitive while embracing the positive aspects of athlete compensation.

What's clear is that smaller schools cannot and should not attempt to copy the payment structures of top programs. Instead, they must create competitive advantages through innovative approaches to NIL, emphasizing their unique strengths, and developing models that benefit all their student-athletes.

As Portland State coach Coburn wisely noted, "We have to strive to try and level the playing field." This sentiment captures the challenge and opportunity facing smaller schools in this new era. With the right protections and strategies, revenue sharing can be a positive development for all of college athletics, not just the schools with the most money.