I don't pretend to know a lot this new world of paying football players. Many of the articles I read seem to be somewhat confusing particularly about Revenue Sharing versus NIL. Some articles seem to conflate the two sources of revenue. I saw a letter from UNC Athletic Director (Bubba Cunningham) to UNC donors which gives a pretty concise breakdown of the income possibilities for players. According to Cunningham the
Revenue Sharing is distinct from the NIL opportunities. I have copied the key paragraphs below and show the link to the article at the bottom. The
Revenue Share portion of the income will be delivered to the Athletes directly from the Athletic Department. NIL is separate and derived from outside sources (with approval from a National Clearing house).
Based on that, I suppose the Athletes would have to be paid based on Contract Labor or placed on the Athletic Department payroll.
Just as a non-lawyer, I assume Athletes will be paid on a Contract Labor basis to avoid being characterized as Employees.
From Cunningham's letter:
THE CHANGES
The House settlement, expected to gain final approval by U.S. District Court Judge Claudia Wilken in April 2025, will end three lawsuits that challenge NCAA rules about NIL and other payments to student-athletes. The proposed settlement would result in significant changes to the college athletics landscape, as well as the way we operate at Carolina, including:
Revenue Sharing: Institutions will be allowed to share revenue directly with student-athletes. The revenue share – derived from a percentage of average revenue from ticket sales, TV broadcasts and other commercial activity at schools in the top athletics conferences – is expected to start at approximately $20.5 million in 2025-26 and will increase over time. With a $130 million budget last year supporting 28 teams, we are working with the University, The Rams Club and other commercial enterprises to generate as many dollars as possible for revenue sharing. Currently, Football and Men's Basketball are the only sports at Carolina that generate more than they spend. We are still determining how to share revenue while being mindful that the success of those two teams is key to the success of all of our sports programs.
Roster Limits and Additional Scholarship Support: Previously, the NCAA did not limit roster sizes but did limit the number of scholarships that could be awarded in each sport. The settlement now places limits on team rosters with schools being able to provide as many scholarships as roster spots. Carolina currently offers the equivalent of 330 full scholarships to 530 of our approximately 850 student-athletes, thanks to the generosity of our Rams Club donors. While the new roster limits will decrease our total number of varsity student-athletes to a maximum of 735, we are committed to offering more opportunities to student-athletes by increasing the number of scholarships available. The Rams Club Scholarship Endowment will continue to be a great resource in funding athletics scholarships.
Past Damages: The NCAA will pay approximately $2.8 billion to student-athletes who participated from 2016 to 2024 and were not allowed to participate in NIL activities due to NCAA rules. The NCAA will fund this payout by withholding revenue distribution to schools over 10 years. The impact will cost Carolina roughly $1-2 million dollars annually via that reduced distribution.
NIL Opportunities: In addition to revenue share payments, student-athletes still will be able to benefit from their NIL opportunities from third parties, subject to new rules in the settlement – including a national clearinghouse to analyze deals over $600 dollars in order to monitor and enforce the legitimacy of NIL opportunities. This structure should provide better transparency and help to level the playing field in recruiting. It could also mean a change in structure of the collectives supporting student-athletes after this academic year. We fully support the efforts of NCHOF and Old Well Management and ask that you continue to support
Carolina NIL through those organizations.
Carolina Director of Athletics Bubba Cunningham shared this message on Wednesday morning.
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