Author: Erik Henry Smetana
The May 2024 $2.8 billion settlement in which the National Collegiate Athletic Association (NCAA) and five conferences agreed to pay to settle antitrust claims has accelerated the timeline for student athlete compensation.1 This development has created an urgent need for clear, practical policy frameworks that higher education institutions should consider.
Policy decisions will fundamentally shape the future of collegiate athletics in four critical areas.
1. Equity standards in compensation
The most pressing challenge facing higher education institutions involves establishing clear guidelines for equitable compensation across men's and women's sports programs. Title IX compliance in the compensation era requires sophisticated frameworks that acknowledge both legal requirements and operational realities, such as the varying revenue streams and operational costs of different sports programs.
Higher education institutions must develop policies that enable them to balance multiple competing factors. These include revenue differentials between programs, participation rates across sports, and the need to maintain broad-based athletic opportunities. Research suggests successful frameworks will need to:
- Provide explicit criteria for measuring compensation equity across programs while acknowledging revenue realities. Policies might establish acceptable ranges for compensation ratios between revenue and non-revenue sports, while maintaining Title IX compliance.
- Enable proportional compensation models that reflect both program economics and equity requirements. These models, which could be based on a percentage of the program's revenue, allow institutions to maintain financial sustainability while ensuring fair compensation. This approach ensures that higher-revenue sports contribute more to the overall compensation pool, balancing financial sustainability and fairness.
2. Non-revenue sports support
The sustainability of broad-based athletic programs demands particular attention. Policy frameworks should include:
- Establish support mechanisms for non-revenue sports, including revenue-sharing guidelines or grant programs. Such broad-based focus helps maintain comprehensive athletic opportunities while acknowledging financial realities.
- Create incentives for maintaining diverse athletic programs rather than concentrating resources on revenue sports. These incentives might include recognition programs or funding priorities that reward program breadth.
3. Amateur status protection
A clear distinction between collegiate and professional athletics remains crucial. Institutions must:
- Establish guidelines for performance-based incentives that align with educational missions. These frameworks should reward both athletic and academic achievement.
- Create monitoring protocols that prevent "pay-for-play" scenarios, while enabling fair compensation. Regular audits and clear guidelines will help maintain program integrity.
4. Financial education requirements
Student-athlete success extends beyond compensation itself. Compensation frameworks should consider:
- Comprehensive financial education programs covering essential topics like budgeting, taxation and long-term planning. These programs prepare athletes for successful money management.
- Regular evaluation of education program effectiveness through clear metrics and outcomes assessment. Such metrics maintain program quality and relevance.
Implementation considerations
These policy imperatives require careful implementation planning:
- Phased rollout. A graduated implementation timeline allows for proper preparation and testing.
- Regular assessment of policy effectiveness enables refinement and adjustment as needed, maintaining program effectiveness while addressing emerging challenges.
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