House settlement approves revenue sharing. Here’s how Tennessee will pay players.
House settlement approves revenue sharing. Here’s how Tennessee will pay players
Starting July 1, University of Tennessee athletes will receive direct payment from the school, supplementing existing NIL income.
While NIL income remains uncapped, the new revenue sharing model raises concerns about financial strain on athletic departments and potential cuts in other sports.
University of Tennessee athletes will be paid revenue directly by the school, beginning July 1, in addition to third-party income they already earn for use of their name, image and likeness.
The revenue sharing era has officially arrived with approval of the House settlement on June 6, which resolved three federal antitrust lawsuits against the NCAA and four power conferences (ACC, Big Ten, Big 12, SEC).
Any NCAA member school opting into the revenue sharing format can pay its athletes up to an annual cap of approximately $20.5 million. That doesn’t include third-party NIL pay, which is still allowed.
This is a monumental shift in college sports, which moves even closer to a professional model as the NCAA and major conferences try to avoid further litigation.
Just like the NIL era, which began in 2021, UT will dive headfirst into revenue sharing. Here’s what UT fans need to know about this new system.
There’s a salary cap for each school
There will be a cap of approximately $20.5 million that a school can pay its athletes per academic year. It will be 22% of the average revenue from ticket sales, media rights and sponsorships by power conference schools. That cap will increase each year.
Schools determine which athletes are paid and how much, as long as the total doesn’t exceed the cap. Presumably, schools will spread revenue among several players, just like the payroll of a pro team.
Additionally, a player can earn as much NIL money as the market will pay, but those deals must withstand a new vetting process.
Here’s how Tennessee could divide revenue
UT has not disclosed its approach to revenue sharing. But it appears UT, like most SEC schools, will distribute the money according to revenue each sport produces.
A model was prescribed in the preliminary House settlement: Approximately 75% to football players, 15% to men’s basketball, 5% to women’s basketball and 5% to other sports (including baseball).Salary cap doesn’t include NIL
Athletes can still earn NIL money in addition to their share of school revenue. NIL income comes from businesses, boosters and third-party collectives. Revenue shares come directly from the university’s athletic budget.
The richest schools and boosters will utilize those two income streams to maximize player pay in a high-dollar arms race to build the most talented rosters.
