AMELIA ISLAND, Fla. -- Pounding rain gave way to sunshine as ACC administrators clasped their carry-ons and exited the Ritz-Carlton on Wednesday at the conclusion of the league’s spring meetings.
It’s a sunnier existence in the ACC these days. There were no lawsuits to discuss, nor realignment to assess, while conference revenues are pushing past $700M annually.
But less than a year into college sports’ revenue-sharing era, leaders within the ACC and across the Power Four are already confronting a familiar problem: Schools are spending beyond the system meant to control them, and no one is fully sure who has the power -- or the will -- to stop it.
“The only thing worse than having no rules is having rules that are amorphous and that people aren’t following,” Notre Dame AD Pete Bevacqua told Sports Business Journal. “... The cap is not operating the way it’s intended. The cap needs to be looked at, and I think cap people agree it needs to be raised and rules need to be clarified.”
This week’s ACC meetings provided a lens into the increasingly complex and frustrated world of high-major college sports.
The House settlement was designed to create an annual revenue sharing cap starting at $20.5M and increasing by a percentage each year. Schools have blown past that number through third-party NIL deals that don’t count toward the cap under the settlement’s terms. Football programs are spending $40M-plus to field teams, while men’s basketball rosters are eclipsing $20M.
The subsequent issues present two basic problems: 1) Schools inflated the market by front-loading deals ahead of the launch of the College Sports Commission in July 2025; 2) Third-party multimedia rights companies are being used to funnel above the cap funds to players.
Such problems have created a growing frustration with the CSC’s inability to enforce the cap, while administrators feel a pressure to consider taking the dramatic step of conference-specific governance.
“Market forces have outpaced the enterprise from when we started the negotiations with the House settlement -- structurally, logistically, enforcement, and obviously the numbers and the value of third-party NIL agreements that we’re talking about,” Ohio State AD Ross Bjork told SBJ. “That’s why we’re now at this place where all of this has to be rethought, reimagined.”
Power Four commissioners discuss amnesty for big money deals
The only constant in college sports these days is rising roster costs.
But as table stakes grow, administrators are concerned that deals being held up in NIL Go, the CSC’s vetting system, could force a breaking point where schools cannot keep the promises they’ve made to athletes.
One option, sources familiar with the talks told SBJ, is allowing schools effectively a one-year exception to go over the cap in order to keep those steep commitments. The concept has been discussed among the Power Four commissioners, and would likely be favored by the Big Ten and SEC.
What’s unclear is which deals would qualify for forgiveness — and whether a one-year exception would encourage schools to load up again next year in hopes of another bailout.
If it directly impacts the cap, such a motion would also presumably require approval from the NCAA and Pac-12 -- both of which are named defendants in the House settlement -- along with plaintiff’s attorneys.
ACC Commissioner Jim Phillips said Wednesday his league would likely oppose full amnesty. Big 12 Commissioner Brett Yormark, too, is unlikely to support the pitch, which opponents view as letting the Big Ten and SEC off the hook for overcommitting to athletes.
“How do you ever go backwards?” said one industry source of efforts to rein in roster costs. “... It’s like in ‘Men in Black,’ the [memory eraser] that Will Smith puts his glasses on and pushes. How do you make student-athletes and high school kids not remember that people just make gobs and gobs of money?”
“Schools are writing checks they can’t cash,” added a second industry source. “They’re hiding behind the fact that ‘Well, kids aren’t going to get paid and then they’re not going to play.’ That’s not [our] problem.”
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Could the SEC take governance into its own hands?
The SEC and Commissioner Greg Sankey remain central in deciding how to account for the rising costs of rosters and what shape college sports might next take.
League sources told SBJ frustration with the CSC’s rollout and subsequent enforcement came to a head during last week’s meeting of the conference’s athletic directors in Birmingham, Ala.
Sources characterized the discussion as something between an intense examination of the future to a mild idea session brought on by lingering sentiments of some within the league.
The underlying impetus for those talks, however, has created a wariness across the industry -- the SEC’s frustration might just be the thing that pushes it to take governance on at the conference level.
In January, Georgia President Jere Morehead told Yahoo Sports that if the CSC couldn’t enforce the House settlement, if the NCAA couldn’t react to tampering rules and/or if Congress couldn’t get legislation approved, it might lead the SEC to make such a move.
“We’d want to play with the schools following the rules,” Morehead said at the time. “This plan would work because college football fans are focused on the SEC. Look at the TV ratings this past season. Our fans want to see a rules structure.”
The SEC and broader Power Four’s frustrations, however, come with a contradiction: Some schools questioning the CSC’s effectiveness are those pushing the limits of the cap in recruiting battles.
That tension, at least in part, has made the idea of a more formal conference-specific governance shift more prevalent in recent weeks.
“When push comes to shove, are 15 schools going to be willing to say ‘We’re going to fine you?’ -- I hope so,” said one Power Four administrator. “There’s very few membership organizations that exist on compliance. They exist on everyone following the rules. Enforcement is the backstop. What we’ve proved right now is no one wants to follow the rules and no one wants to be governed.”
SEC deliberations, which should continue during its spring meetings May 26-28 in Destin, Fla., raise their own questions: Could the conference create its own enforcement arm? Could it create a document that binds league members to cap rules? Could it participate in the men’s basketball tournament if it were no longer part of the NCAA or playing only an all-SEC schedule?
League leaders, sources told SBJ, are trying to sort through just that.
“Could the CSC have set up an enforcement mechanism earlier and better? Sure,” said a second Power Four administrator. “But the same schools who claim they wanted to be governed, refused to sign a participation agreement.
“Don’t listen for one minute to the people bitching about the CSC. It’s the same thing as the NCAA. We blame the NCAA. That’s us (the NCAA) -- we’re the idiots.”
‘The arbitration system works’
Unrest aside, the CSC earned a needed victory in winning its arbitration against 18 Nebraska football players related to deals they inked through Playfly, the school’s third-party multimedia rights provider.
The CSC has contended MMR companies ought to be treated as “associated entities” under the terms of the House settlement, effectively allowing deals that are passed through such companies to come under more strict scrutiny.
The arbitrator who ruled on the Nebraska case specifically noted, “In effect, Playfly functions as a pass-through for University payments to its student-athletes in a way that was designed to bypass the cap.”
And while this week marked a notable win for the CSC, more challenges are ahead.
Plaintiff’s attorneys in the House settlement, Jeffrey Kessler and Steve Berman, have filed a motion contending multimedia rights companies should not be allowed to be treated as associated entities. A hearing is scheduled for June 10.
“What [Monday’s] decision shows is that the arbitration system works,” CSC CEO Bryan Seeley said after meeting with ACC administrators and coaches this week. “Student athletes submitted deals. We made a decision about those deals. There was a robust hearing in which witnesses were called, arguments were made. There was a lot of briefing, and the arbitrator made a decision based on the facts.
“The place for decisions that are based on the factual record is in arbitration under the settlement. It is not in court in California. What the plaintiff’s counsel in the House litigation have tried to do is remove these kinds of issues from factual grounding and put them in court when they previously agreed in the settlement that the issues will be decided in arbitration.”
The amnesty pitch and the discourse that ought to come when the SEC and its stakeholders meet on the Florida Panhandle in the coming weeks, of course, aren’t the first efforts at right-sizing the settlement.
As SBJ reported in March, Big Ten Commissioner Tony Petitti has floated a college version of the NBA’s Bird rights, which would allow schools to exceed the cap to retain their own players. That concept has not gained traction, but the underlying issue has only intensified: Schools are spending beyond the cap, and college sports leaders are still searching for a way to address it.
“What got us in trouble leading up to now was the stop gap premise of front-loading,” Bjork said. “[The sentiment was], ‘Go ahead and load up by June 30th and everything will be fine starting on July 1, 2025.’ It hasn’t been.
“I don’t think we’re in a position anymore for short-term stop gaps.”
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