The Professionalization of College Athletes

Perhaps you read that a federal judge signed off on a controversial change in how college sports are administered including paying college athletes  of former players who were barred from millions of dollars as soon as in July 2025. The terms of the settlement of a lawsuit filed by Arizona State swimmer Grant House and the NCAA, and five biggest conferences, lifted restrictions on revenue sharing. The settlement includes approval for each school to share up to $20.5 million with athletes over the next year and $2.7 billion that will be paid over the next decade to thousands who were barred from that revenue.

The takeaway from the agreement is that the players are the ones producing billions of dollars in TV and other revenue, mostly through football and basketball and, as such, they should be fairly compensated for their efforts and the final product. 

"Approving the agreement reached by the NCAA, the defendant conferences and student-athletes in the settlement opens a pathway to begin stabilizing college sports," NCAA president Charlie Baker said.

Name, Image, and Licensing” (NIL)

I have previously blogged about the expansion of “name, image, and licensing” (NIL) opportunities for collegiate athletes. This has spawned so-called collectives.

NIL collectives are independent organizations that fundraise money for various universities and give it to attending college athletes in the form of NIL agreement payouts. Several NIL collectives guide their athletes through the NIL endorsement landscape. 

NIL collectives are a relatively new phenomenon. In less than three years, they’ve shaken up the college sports scene and spurred some controversy. They represent booster-funded organizations that are a common way for athletes to cash in on their NIL compensation. They have become a stand-in for salary, which has created deep concern for many in college sports.

Antitrust Settlement

“One of the key functions of a collective is properly managing payroll for a sport. And the skill set that’s been developed is now going to be required for every single [power conference] school,” said Blake Lawrence, whose company, Opendorse, works with dozens of schools of more than 40 collectives on NIL activities.”

Lawrence also wonders whether schools will hire key members of their collectives, those responsible for managing and moving money, negotiating with parents and players, and move the process internally. Or, according to Lawrence, “will schools hire the collective as their NIL agency, and shift some of their risk away from the school into the third party to manage the distribution of those NIL payments?”

The revenue-sharing model included in the antitrust settlement, and agreed to by the NCAA, Big Ten, Big 12, Pac-12, Atlantic Coast and Southeastern conferences, would allow schools to direct up to 22% of the average power league school's annual revenue to athletes. That amounts to about $20.5 million per year and would rise as revenues rise over the 10-year agreement. This is an enormous amount of money for a sports program that for many years treated college athletes as amateurs. 

Profiting Off NIL

The amount of money that goes into college sports from boosters, donors, alumni, television advertising, sales of sports merchandise and so on opened the gates to allowing college athletes to make money from their NIL. These deals are negotiated directly between the athlete and/or representative and the party looking to profit from NIL.

In a perfect world, NIL would be a great solution to a decades-old problem of college athlete compensation, but we don’t live in a perfect world. NIL has been taken advantage of by some schools, which causes rampant transferring and an unfair college football landscape. We can only guess at what could be an unfair system of revenue sharing where the five conferences make out like bandits.

Beyond football, NIL causes major problems with gender inequity, and it does not give everyone an equal chance to get fair or adequate payment. Will the same occur with the recent antitrust settlement and revenue sharing? Time will tell. Hopefully, at some point, the NCAA will figure out how to make NIL fair and equitable, and work to do so with the antitrust settlement, for all student-athletes. However, I doubt it as, in college sports, especially football, the rich get richer while the poor stay stagnant with respect to attracting funds from external sources for their athletes.

Posted by Dr. Steven Mintz, aka Ethics Sage, on June 12, 2025. You can learn more about Steve’s activities by checking out his website at: https://www.stevenmintzethics.com/ and signing up for his newsletter.