Audit Questions, The Return of the College Basketball Video Game, ICYMI, & More | NIL Newsletter #342
Today’s Thursday newsletter includes highlights from this week, important news from last week, and what to watch for.
This Thursday’s Newsletter Includes:
1. Revenue-Sharing Cap Sparks Audit Questions
2. College Basketball Video Game Returns in 2025
3. Quick Hitters
4. ICYMI: FSU Rev-Share Contracts Raise Concerns
5. What to Watch For: College Leaders Call for Collective Bargaining Framework
🏆Major News
College Sports Revenue-Sharing Cap Sparks Audit Questions
As the NCAA launches its first year under the House settlement with a $20.5 million cap on per-school athlete benefits, plaintiffs' attorneys are already auditing the underlying revenue data used to calculate that cap. While they allowed the cap to proceed for the July 1 start, they reserve the right to challenge the figure based on concerns about revenue misclassification, especially in "Other Operating Revenue."
Plaintiffs are examining whether schools properly categorized suite license revenues, which are supposed to be included in the cap's revenue base. Inconsistencies from schools like Penn State, Colorado, and Washington—who reported multi-million-dollar figures without sufficient explanation—have raised flags.
The settlement specifies that the cap equals 22% of defined revenues from the 2023-24 fiscal year. If luxury suite payments were wrongly placed under non-qualifying categories such as "Contributions," the cap could have been set artificially low, undercutting athlete payouts.
Legal provisions in the settlement empower the plaintiffs to audit these numbers annually and bring disputes to Magistrate Judge Nathanael Cousins. These audit rights represent a long-term mechanism for challenging underreporting and may influence revenue-sharing caps for years to come.
A higher benefits cap would not only increase direct athlete payments but would also result in higher legal fees for plaintiffs' attorneys, who receive up to 1.25% of the benefits distributed each year.
While no immediate changes to the $20.5 million cap are expected for 2025-26, any findings from this audit could reset the baseline for future cap increases and shift how schools budget their NIL and scholarship allocations.
College Basketball Video Game Set to Return in 2028
EA Sports is officially reviving its long-dormant college basketball video game franchise, with a targeted launch set for 2028. The announcement follows the overwhelming commercial success of College Football 25 and a multi-year proposal submitted through the Collegiate Licensing Company (CLC).
The upcoming game will feature both men’s and women’s Division I programs that opt in, totaling over 730 teams. Players will be compensated through NIL licensing, with EA planning to run deals through OneTeam Partners. Schools have until July 18 to approve participation.
Unlike previous iterations, this version is expected to include modern modes such as Dynasty, Ultimate Team, and Road to Glory, similar to its football counterpart. EA has committed to at least three games in six years, with the option to extend to six games.
Legal and historical context looms large. EA’s last college basketball title in 2009 helped spark the landmark Ed O’Bannon lawsuit, which ultimately led to the prohibition of NIL use without compensation. This new project symbolizes a full-circle return in a post-O’Bannon NIL landscape.
The rollout underscores the expanding commercial viability of digital NIL content and reflects growing institutional comfort with licensing athlete likenesses in non-traditional formats. With schools earning royalties based on usage rates, top programs could see additional revenue depending on fan engagement.
While some view the 2028 target as distant, industry analysts emphasize the complexity of acquiring NIL rights, modeling athletes, and building campus-specific assets. The game’s revival is a long-term signal of how NIL is reshaping sports entertainment, not just on fields and courts, but on screens and streams.
📌Quick Hitters:
Texas Launches Longhorn Sports Agency with Learfield – Texas Athletics has formed a unified NIL agency with Learfield to handle deal facilitation, brand building, and content strategy for athletes. The agency will integrate media platforms like LHN and Learfield Studios to streamline NIL operations. 🔗 LINK
Two Top NCAA Executives Announce Retirement – Kevin Lennon and Dave Schnase, both longtime NCAA policy executives, have announced their retirements amid sweeping settlement reforms. Their exits signal a shift in leadership as the NCAA adapts to athlete compensation and governance changes. 🔗 LINK
LSU to Pay Athletes $20.5M in First Revenue-Sharing Year – LSU will meet the cap by distributing 75% of funds to football and 15% to men’s basketball. They expect an $8M budget deficit but will supplement revenue with ads and third-party NIL deals.🔗 LINK
One-Time Summer Transfer Window Opens for DSAs – The NCAA has introduced a July 7–Aug. 5 transfer portal window for "Designated Student-Athletes" who were promised 2025–26 roster spots but lost them due to new limits. These DSAs are exempt from roster limits at new schools. 🔗 LINK
New Report Reveals GM Contracts Across College Hoops – A Substack deep dive shows rising salaries, car stipends, and buyout clauses for basketball GMs. As schools shift toward pro-style front offices, front-office expertise is becoming a competitive edge.🔗 LINK
ICYMI
Florida State Revenue-Share Contracts Raise Legal and Ethical Concerns
Florida State’s initial revenue-sharing contract drafts have drawn intense criticism from NIL attorneys and agents, with provisions allowing FSU to unilaterally extend contracts without athlete negotiation or input. One clause permits year-to-year extensions at the same rate, locking players into fixed compensation for the duration of their eligibility, prompting one agent to call it “unconscionable.”
Additional clauses allow FSU to reduce or cancel contracts based on injuries that affect an athlete’s NIL value, even if sustained during athletic participation. Legal experts have labeled this type of provision as excessive and unlike anything seen in traditional sports contracts.
The agreements also feature aggressive fine structures, including up to $2,500 for lost equipment and scaled reductions in compensation for failed drug tests—50% of total value for a third offense. Critics argue these rules lack due process and appeals protections, raising fairness and enforceability issues.
NIL experts warn that FSU’s approach could set a dangerous precedent if left unchallenged, encouraging other schools to overreach without the checks typically found in collectively bargained agreements. Darren Heitner called the contracts “some of the most unconscionable” he has seen in 15 years of legal practice.
These contracts illustrate the tension between schools seeking flexibility in the post-House landscape and athletes operating without labor protections or union representation. Without clearer guidelines or a collectively bargained framework, athlete leverage and legal clarity remain limited in revenue-sharing deals.
FSU says it intends to negotiate in good faith and asserts the contracts reflect a commitment to elite athlete experience. However, the legal and reputational risks associated with the current language may spur revisions—or further litigation—as more athletes and agents push back.
What To Watch For: College Leaders Call for Collective Bargaining Framework
As athlete revenue-sharing takes effect under the House settlement, Tennessee AD Danny White and over three dozen other athletic directors are calling for the next evolution in college sports: collective bargaining with players. White argues that trying to regulate athlete movement, compensation, and contract obligations without a union-like structure is unsustainable.
White’s model envisions a national employment organization that partners with a players’ association. Though it avoids labeling athletes as direct school employees, it would still implement a binding collective agreement governing compensation and movement—a system he likens to outsourcing employee labor like Aramark.
Power conference ADs like Mack Rhoades (Baylor), Michael Alford (FSU), and Bubba Cunningham (UNC) agree that the current system of marketing contracts disguised as NIL deals is untenable and rife with legal risk. Some schools have already seen players breach revenue-share agreements, leading to early lawsuits (e.g., Wisconsin’s suit against Miami over Xavier Lucas).
Legal experts point out that current contracts are employment agreements in all but name. Provisions include performance incentives, academic eligibility requirements, buyout clauses, and school termination rights—hallmarks of labor contracts, not independent marketing agreements.
While unionization faces major roadblocks—especially in right-to-work states—many believe that voluntary negotiation models or congressionally sanctioned frameworks (e.g., Athletes.Org's "Save College Athletics Act") may offer a middle ground.
Despite pushback from power conference commissioners like Greg Sankey and Jim Phillips, a growing number of administrators and lawmakers view collective bargaining as the only realistic long-term solution. Without it, experts warn, the current structure will collapse under the weight of litigation and compensation disparities.
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