SBJ College: The House settlement isn’t so settled

It’s been a busy couple of weeks here at the SBJ South Carolina bureau — also known as “my house” — so I’m taking a short trip I’ve been looking forward to for a while.

Thursday night I’m seeing Bruce Springsteen down in Florida with my parents. I’ve been trying to check off a few of the legends we still have with us in recent years, and Bruce is absolutely at the top of my list of those I hadn’t seen yet.

I’m admittedly a Deadhead and a classic rock buff (among my prized possessions is a guitar signed by Mick Jones of “The Clash,” one of my two favorite bands), so this week couldn’t come soon enough.

I’m beyond excited for Thursday night.

This week brought the most significant shift in how the House settlement might be applied moving forward when plaintiffs lawyers filed a motion to have apparel companies and third-party multimedia rights providers not be classified as “associated entities” by the College Sports Commission.

Put in simpler terms, the CSC is tasked with enforcing the $20.5 million revenue-sharing cap. One way it does that is by policing “associated entities” — groups such as collectives or boosters that act on a school’s behalf. Those entities face stricter scrutiny to prevent schools from routing extra money outside the cap to athletes.

That brings us to Monday. Schools are already seeing dollars shifted to MMR providers such as Learfield, Playfly and JMI Sports and apparel providers to help match payrolls that are almost all above the cap within the Power Four. If those are under less scrutiny moving forward, presumably everyone would flood their money through those entities, and the CSC can’t really do anything about it.

This is notable because third-party dealmaking through apparel companies and MMR partners is already rampant. The CSC put out a report for deal data for agreements made in January and February that showed the following:

• Associated Power Four deal volume increased 65%, while the average value of deals with associated entities was up 182%
• Associated Power Four deals represented 79% of the total deal value of those submitted by such schools in January and February (up from 56% in November-December).
• Associated Power Four football deals were responsible for 81% of the total deal value and 48% of the total deal volume of Power Four associated deals during that span.

“It’s fair to say that the NIL market in college athletics is not a normal organic market,” CSC CEO Bryan Seeley said at the time. “It’s a market in which schools are manufacturing NIL for their student athletes. And they’re doing it in such a way that deals are paid by entities affiliated with the school or acting at the direction of the school.”

This filing from Jeffrey Kessler and Steve Berman comes amid an arbitration between the CSC and 18 Nebraska football players. Deals worth reportedly north of $1 million were rejected by the CSC over issues with “warehousing.” The practice is when an entity (Playfly, Nebraska’s MMR partner, in this case) purchases NIL rights of athletes for future commercial opportunities, whereas the CSC requires there be actual activations attached.

“The CSC’s application of the rules on associated entities is straightforward and fact-based,” Seeley said in a statement provided to SBJ on Tuesday. “Those rules, which plaintiffs’ counsel agreed to, clearly state that entities directed by schools to assist in recruiting are associated entities. Under the settlement, arbitration is the proper forum to challenge the CSC’s application of these rules. This motion was filed to evade an imminent arbitration in which the CSC will prove, based on evidence, that a school’s multimedia rights partner is an associated entity.”

To be fair, the idea college sports has been operating within the $20.5 million cap is laughable. College football rosters are regularly eclipsing that number. Kentucky men’s basketball was touted for a roster in excess of $20 million this past season. So, no, the cap is not doing what it was designed to do.

What’s next is unclear. If the CSC can’t apply strict scrutiny to the places schools are running their deals through, what really is its purpose?

Like anything in college sports these days, we’ll almost certainly get an answer in the courtroom.

There aren’t too many people who’ve had the impact Val Ackerman has on college sports.

The Big East Commissioner, who announced Monday that she will retire in August, was almost single-handedly responsible for resurrecting the conference, served as the WNBA’s first commissioner and has been a massively influential voice in college basketball circles over the last 15 years.

I wrote about Ackerman and the Big East’s efforts to reform the league almost three years ago, but this section still speaks to what an enormous effort that took:

To call Ackerman’s undertaking herculean is almost underselling it. Forget membership, conference tournaments or coaches. The league didn’t even have its own internet domain, email infrastructure or bank account when Ackerman came on.

“I was on my Gmail account for months,” Ackerman said. “We had no website. We had no checking account — Georgetown was managing our finances until I hired a CFO and we got [JP Morgan Chase] to give us a checking account. We had no benefits plan, so everybody I was hiring, I was promising benefits to.”

Ackerman deserves a standing ovation for her work, which included everything from major television deals with Fox, NBC and TNT to intimate work in getting the NCAA to permit NIL for players. She really is a legend and one of the sharpest minds in the business. College sports will miss her.

Who might replace Ackerman? I’m speculating here, but a couple names that could make some sense include Coastal Athletic Association Commissioner Joe D’Antonio, SEC Associate Commissioner/Men’s Basketball Garth Glissman and Big East Deputy Commissioner/COO Vince Nicastro. Former Big East senior staffer Dan Leibovitz also just replaced Bernadette McGlade at the Atlantic 10 about a month ago. Could he come back that quickly? Unlikely, but never say never.

Expect ample interest from those in pro sports. And don’t be surprised if some bigger names in the sports media/TV world get involved here.

It was a busy week out in L.A. as dignitaries from around the sports world congregated for SBJ’s World Congress of Sports.

The event doesn’t often feature a ton of college flair, but I thought a few of the comments from Fox Sports CEO Eric Shanks were noteworthy.

Shanks specifically talked about favoring the 24-team College Football Playoff model that’s been pitched by Big Ten Commissioner Tony Petitti. That shouldn’t come as a massive surprise considering Fox is shut out of CFP inventory, while a 24-team field would almost certainly necessitate another partner or that those games would go to the open market — opening the door for Fox and others.

Here are comments from Shanks during his conversation with Fox Sports’ Colin Cowherd:

On the 24-team College Football Playoff

“I think 24 solves an enormous amount of problems. You’ve had people in the SEC come out and say that their championship game has run its course. There’s a theory that championship games have run their course. You can create A) more valuable games that the schools need; but B) one of the big knocks against college football is in the first three weeks, it’s actually hard to find great games.

“If you don’t get penalized for playing those big non-conference games early and there’s a bigger pool of teams that can get into a [24-team] playoff, the schedule gets better in September, because you won’t be penalized for playing great games. And then in November, you have more meaningful games, because a lot more teams are in play to be able to get in. I think it’s probably inevitable that it expands, and hopefully, at least from the research we’ve done, the best model we’ve seen is 24.”

On NIL and the transfer portal changing the sport, potentially leading to Big Ten dominance

“I learned a lot about NIL and what the fans think of the current state of college sports from you [Cowherd]. Your takes on how some people in the business, and rightly so, have a lot of consternation over the chaos on the business side. But for the fan, it’s never been better. It’s incredible. I think that’s your take, right? That NIL has helped with parity, it’s helped with fan engagement, it’s helped with everything that the fan sees. But there’s a potential for it to be unsustainable for certain schools. Clearly, there’s something that has to be fixed over here for certain schools, but the product just has never been better.

“Our view, being in partnership right now with the Big Ten and the Big 12, is you have an allegiance to those conferences as their media partner to want them to do well. And so we do everything we possibly can with the Big Ten Network, with all the levers that we can pull with the Big Ten and the Big 12 to make them as successful and put them in the best windows for their brands to succeed.”

• The Big 12 reorganized a slew of senior level staffers, with CFO Nick Bowes taking on an expanded role as the conference’s COO. The Big 12 also elevated Kauri Black to VP/broadcast and emerging platforms; Andy Louthain to VP/compliance and governance; Katie Ristow to VP/brand and marketing; and Keena Lynch to assistant VP/content and digital media.
• Fox Sports will put on the “Eternal City Tip-Off” featuring Notre Dame and Villanova men’s and women’s basketball teams facing off in Rome on Nov. 1. Players Era and On Location are assisting Fox Sports with the event.
• An op-ed in this week’s magazine argues that it’s time college football, an undervalued asset despite being the second highest-rated TV programming in the U.S., should move to a model under a professional single seller, akin to the CFP.
• My colleague Bret McCormick provides updates on a few college projects, such as the $220 million renovation of the Simmons Bank Liberty Stadium at Memphis, in his latest SBJ Facilities newsletter.