Dear Season Ticket Holder,
I write to you with another update regarding the legal and regulatory matters around student-athlete compensation and benefits, and the impact on our basketball programs moving forward.
Earlier this week, a federal judge granted preliminary approval of a settlement agreement that will radically change the economic model of college sports as early as July 2025. You may have seen media reports about this; it is typically referred to as the “House v. NCAA” case. Although some legal steps remain, the preliminary approval at this stage in the case leads many to project that final approval will happen in April 2025.
As I have shared with you before, the major parts of the settlement are as follows:
- Total back damages paid for former student-athletes of approximately $2.78 billion, to be paid over 10 years.
- Going forward, NCAA and conference rules will permit direct payments by colleges and universities to student-athletes, up to amounts in the settlement agreement. Specifically, the settlement allows institutions to make payments to student-athletes up to a capped amount (currently about $22-$23 million per school) and that cap will be re-evaluated every few years. The cap is based on a formula of the average Power 5 school’s revenue, so major college football revenue accounts for a majority of that cap.
- Scholarship limits will be eliminated in all sports, and roster limits will be established.
The nuance and complexity of the settlement prevents me from describing it fully. However, we are primarily focused on the portion of the settlement that will allow schools to offer direct payments to student-athletes beyond what is currently permitted by NCAA rules.
Under current NCAA rules, UD is prohibited from paying students directly or indirectly. We may not use any institutional funds (from season tickets, donations, etc.) to compensate players for use of their name, image, and likeness. As a result, the NIL compensation students receive today is entirely reliant on third parties like you, Dayton 6th, corporations, organizations, and individual contributors. Please continue to support these efforts. However, if approved, this settlement will remove that restriction and allow direct payments from UD. Dayton 6th will also remain an important part of our program.
So what does this mean for Dayton Flyers basketball?
The total amount of additional payments and benefits schools will be permitted to provide directly to student-athletes is known as “the Pool,” which will be capped at the same level for every institution. In the first year, the 2025-26 season, the Pool cap is projected to be approximately $22-$23M, meaning that each school may offer direct payments to athletes (in aggregate) up to $22-$23M per year, allocated by sport as each school finds appropriate. After the first year, the Pool cap will escalate at predetermined amounts by approximately $1M per year.
Each school may decide whether and how much of these new benefits to provide to student-athletes, up to the Pool amount. The “Power Conference” schools (Big Ten, SEC, ACC, Big 12, etc.) have generally announced their commitment to share revenue up to the Pool cap. Other schools are considering how to enter this market, or whether to enter it at all. Our focus with these payments will be for our competitive basketball teams.
We want to maintain and advance our basketball programs. Our basketball performance is largely dependent on the talents and efforts of highly skilled student-athletes. Therefore, our continued ability to compete effectively depends on our ability to recruit high caliber players and to retain our existing roster. Players and their families want to be on the court, and they want to receive competitive packages and benefits. Players (both high school and transfer) being recruited by Dayton negotiate before they commit to the Flyers. Players and their families compare and contrast market values from schools they are considering.
The “Power Conferences” will use their size, lucrative media contracts and college football revenue to support their basketball teams. We will have to leverage our strengths as well and enter this space with confidence and boldness.
Over the coming months, it is imperative for UD to develop revenue solutions to adapt to the new realities of college sports with appropriate aggressiveness, or we will fall behind in a hypercompetitive environment. Increases in season ticket prices and the Arena Seating Program will play an important role in our ability to compete in any player market that may develop, as will fundraising, corporate partnerships, licensing, merchandising, radio, television, digital and commerce rights, and conference distributions related to media rights. The success of our basketball programs is influenced by many factors, but this issue is rapidly rising into the most important of our critical success factors, along with coaching, facilities, fan support, academic excellence, and overall quality of campus life.
We will not achieve our results with revenue and price increases alone; we will have to adjust costs as well across the Division of Athletics. The student-athlete experience and well-being of our students in sports other than basketball are also very important to us. However, maintaining or exceeding the current investment level in sports other than basketball will be challenging.
More specific information will develop over the next few months, but I wanted to set the stage for what is ahead. Thank you for your patience and understanding as we navigate the most challenging and disruptive time in college sports history. We will find opportunity within the chaos and endeavor to be better than ever before.
Thank you and Go Flyers! |
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