One year ago, college sports got what was supposed to be a salary cap through the House v. NCAA settlement, which allowed schools to pay up to $20.5 million to players across sports. But instead of stabilizing the rising costs of college sports rosters, the settlement only set a new floor.
The average school in the Power 4 conferences offered players $13.5 million in third-party NIL deals above the rev-share cap across sports, according to an annual report released by NIL company Opendorse. That meant schools offered players more than $30 million, rather than the $20.5 million the rev-share cap was supposed to limit them to. (Opendorse doesn’t have access to all NIL deals, but it used the extensive data from the company’s NIL platform to estimate market data.)
“Once the cap was instituted … the insatiable drive to stay competitive only seemed to grow,” the report said.
Here’s how it works: Division I athletic departments were allowed to spend up to $20.5 million paying players directly. But players were still able to earn NIL deals outside of the rev-share cap—so schools worked with collectives, multimedia rightsholders, school sponsors, and other interested brands to secure external NIL offerings that could be included in the overall offering for a player’s “salary.”
The result: football rosters alone were worth well over $20 million, with other sports receiving funding almost entirely from external NIL sources.
NIL Enforcement
The House v. NCAA settlement did have a mechanism to avoid this over-the-cap scenario: the College Sports Commission.
The organization, which also launched last summer, required all Division I athletes to submit any NIL deal of more than $600 for scrutiny into a program called NIL Go. The CSC would determine whether the deals were offered at fair-market value for a valid business purpose, or whether they were pay-for-play in disguise.
In the first year of the rev-share era, many of these third-party deals weren’t even subject to the College Sports Commission’s scrutiny. Schools knew that the House settlement was coming, so they worked with their partners to “frontload” third-party deals—or offer, sign, and fully pay them—before the settlement was approved and the CSC launched.
Despite the CSC approving hundreds of millions of deals in its first year—and rejecting millions of dollars’ worth of other deals—the above-the-cap trend isn’t expected to slow down anytime soon. Top power conference football rosters are expected to reach up to $40 million this year, and top power conference men’s basketball rosters will be worth between $10 million and $12 million.
