WASHINGTON — On Thursday, within a matter of a few hours, the current unruly state of college athletics was on full display.
The NCAA’s transfer portal buzzed to life with dozens of new additions who’ve been lured away by financial inducements from booster-led collectives. The state of Virginia passed legislation that defies NCAA rules by permitting its schools to directly compensate athletes starting July 1. And finally, a national association filed a third complaint with the National Labor Relations Board seeking to make athletes employees.
Meanwhile, within an auditorium on the campus of Howard University, the man who at least partially controls any future college athletics model — the guy perhaps responsible for both bringing disorder to the landscape as well as determining a more stable future — took the stage for a 90-minute panel discussion.
Dressed in a dark suit and striped tie, Jeffrey Kessler peered through spectacles at the audience before him. Kessler, 69, is the lead attorney in what is shaping up to be the most revolutionary case in NCAA history — an antitrust lawsuit that seeks billions of dollars in retroactive monetary damages to former athletes for name, image and likeness (NIL) pay. The case has the potential to, for one, cost the power conferences and NCAA enough money that many fear bankruptcy and, secondly, topple all NCAA compensation rules related to NIL.
There is something else, too: A settlement of the case could produce a future athlete compensation model that will shape the industry for years to come, possibly bringing structure and solutions to the landscape likely in the form of athlete revenue sharing.
To do it, college athletic leaders need the approval of the plaintiffs — and their lawyer.
“A possibility is that this all gets settled in our litigation in which we agree on a new system with the NCAA,” Kessler, co-executive chairman at powerhouse law firm Winston & Strawn, told the crowd at an event hosted by the Drake Group, an organization whose mission is to advance integrity in college sports. “There are proposals out there by [NCAA] President [Charlie] Baker to compensate the athletes. There are systems that could be negotiated as part of a settlement. That’s up to the NCAA. They’ll have to decide if they can actually agree on what it is and then we have to agree to it.”
This embedded content is not available in your region.
‘The Power 4 are not like everybody else’
During his discussion Thursday, Kessler, portrayed often as a villain across the sport’s landscape, espoused plenty of the same views that those within college athletics hold.
For one, he believes the industry finds itself in this predicament because of surging salaries for coaches and administrators. Like so many fans and stakeholders, he supports leaving the NCAA basketball tournament untouched. He showed public support, even, for Baker’s Project DI proposal to compensate athletes. “He gets it,” Kessler said.
And, in music to so many ears, he believes that the power conference schools should be thought of and treated differently than any others within the NCAA’s 97-conference organization, suggesting that an athletic department’s finances be an indicator of how much revenue it is required to share with athletes.
“Here’s what people have to get in their heads: The Power 5 schools are not like everybody else,” he said.
Animated and boisterous, Kessler sent the crowd into applause, laughter and awe at various times. He told the story of how he got involved in college sports, when he learned that major college football programs had evolved into “gigantic business” that prohibited compensation to athletes. “This struck a chord with me,” he said.
Nine years ago, he began his march, leading a lawsuit against the NCAA (Alston) that sought educationally related benefits for athletes, a case that advanced to the Supreme Court. In 2021, the high court handed the NCAA perhaps its worst of many court losses — a 9-0 defeat. “That set in motion everything you see today,” he said.
Kessler spoke deeply about athletic department finances, outlined the four most likely possibilities of a new college model and repeatedly declined to discuss any potential settlement.
However, for months now, the NCAA and power conferences have been engrossed in settlement discussions among themselves — not a well kept secret in the sports world. A settlement is a two-fold issue: Schools are responsible for likely more than $1 billion in back pay, plus must agree to a future compensation model for athletes.
Settlement discussions have ranged widely, and the details of such have mostly been kept private. But several athletic administrators, briefed on the matter, say they are preparing to share revenue with athletes as part of a potential settlement — an outcome much preferred over the lingering possibility of athlete employment.
Figures are murky and are steadily evolving, but many administrators believe that any settlement agreement comes with an annual per-school revenue-sharing figure of $15-20 million.
Defendants in the case include the five power leagues and the NCAA as a whole. What about the little guys? Most Group of 5 and FCS football programs do not generate a profit and their athletic departments are often subsidized by university and student fees.
Kessler’s focus is on the top 70 or so programs, many of which generate upward of $100 million in ticket sales, television contracts and donations — a majority of it related to football.
“You really have to think about [Power 4] as different,” Kessler said. “The reason we get tied in knots is because we conflate those schools who have developed these gigantic independent commercial businesses with the schools who are still just educational institutions with extracurricular activities. When you try to come up with one rule for all, you go crazy. You have to look at the schools differently. For the ones with the money, there is plenty of money to compensate the athletes and share it with the women’s sports.
“Once you divide it all up, this is not hard,” he continued. “It is only hard if you’re saying, ‘Well, how will Lehigh be able to afford all this?!’ They won’t and they won’t pay [athletes]. If their concern is that Lehigh then won’t be able to compete with Alabama in football… OK, that’s your concern? That’s your concern?!”
Stop the gravy train
Kessler outlined what he referred to as “scare tactics” from college leaders, most notably their fear that any revenue-sharing model would result in the elimination of sports.
Most athletic departments use profit from their one true revenue-generating sport (football) to subsidize the rest of the athletic department. That means funding money-losing Olympic sports and paying for football expenses, such as travel, game-day operations and athlete support in the way of dining, healthcare and scholarships.
But over the years, fueled by multi-million dollar television contracts, athletic departments at the highest level became flush with cash. Unable to directly compensate athletes and situated in a competitive environment, departments pumped the excess cash into gaudy facility projects and million-dollar coaching and administrative salaries in an effort to compete with their rivals on the recruiting trail.
This resulted in schools reporting a loss or break-even figure in their annual financial documents. Their argument against an employment or revenue sharing model is simple: If profits are shared with athletes — women athletes, too, as required by Title IX — how then are the other sports funded?
“If you are paying your athletic director $3.5 million because you have the money and you [report] that you have a $100,000 loss, you’re making money!” Kessler bellowed.
He cited the salary of Alabama’s strength coach, David Ballou, who earns $950,000.
“If [he] only made $500,000 and those athletes, largely Black athletes on the football team, got some of that money, no one is going to think that is a bad thing — except the people who are trying to hold up and profit from the system,” he said.
Kessler also questions why football players should miss out on compensation because they hold the responsibility of funding the department with the revenue in which they generate.
“They should not receive anything so that the money can go to the golf and tennis team?” Kessler asked. “Think of the composition of those teams and think of the composition of the teams that are giving up the money. What is that about? Why is it their responsibility to do that?”
From his pulpit Thursday, Kessler encouraged college leaders to lift the NCAA’s remaining amateurism policies prohibiting schools from directly compensating athletes. And yet, as their bedrock of amateurism crumbles, industry executives have not yet pursued the first phase of Baker’s proposal, which permits schools to pay NIL directly to athletes.
So many pressures are pushing high-level college sports from amateurism to a more professionalized outfit. The long-standing amateurism facade is cracking and crumbling, bludgeoned by the courts, state lawmakers and employment entities.
For instance, just in the past five months, court rulings have permitted athletes to transfer an unlimited amount without penalty and OK’d booster-led NIL collectives to induce high school prospects and those from other universities. The NCAA has paused all NIL investigations.
There are four ongoing cases seeking to deem athletes as employees. In addition to the House case, Kessler is leading two more costly antitrust suits, including Hubbard vs. the NCAA with a December trial date.
And various state laws are prohibiting NCAA enforcement and permitting schools to have more of a role in compensating athletes, none more than Virginia, whose law takes effect July 1 — the latest trigger, like California and Florida before it, to potentially exact change.
“Right now, President Baker agrees that schools should pay directly NIL. Our lawsuit says these schools should pay NIL directly and the state of Virginia now agrees. What are we waiting for?” Kessler said. “There wouldn’t be [NIL] collectives if the rules didn’t prohibit the institutions from being involved in providing the NIL payments. Only reason collectives were formed is to try to comply with the ban on that. Everybody’s thought about it and said, ‘Maybe that’s not a good thing,’ and it would be better to have the schools directly do this instead of this bizarre system.”
What’s next?
So how does this end? What’s the new model look like?
Kessler detailed four possibilities:
1. Conferences: NCAA economic regulations around compensation are eliminated and the individual conferences compete with each other by setting their own regulations and rules, creating “one marketplace standard” for athlete compensation.
2. Employment: Athletes are made employees or, at the very least, they unionize in an effort to collectively bargain with their school or conference.
3. Revenue sharing: A settlement from the House case produces a revenue-sharing model for athletes.
4. Congress: The federal government takes action with legislation that grants legal protection to the NCAA and potentially creates a carve-out for college athletes to earn compensation in a more regulated way.
“I think that is the least likely way,” Kessler said. “Until Congress can agree on anything else, I’m not sure they’re going to agree on anything that would be good for college sports.”
There is, of course, another option: The NCAA and college conferences do nothing, continue to get litigated in court and eventually find themselves bankrupt. That choice, though, is well past its expiration date.
“Change is here. It is not going to stay the same. It’s already different,” Kessler said. “The best thing that everybody should think about is, ‘OK, how can we make this change the most positive change for everyone involved?’
“Stop living a vision that doesn’t exist. Face the realities here, because it’s going to happen. The question is, are you going to be part of that change or not be part of that change?”
A deadline looms. The House case goes to trial in January.
After his presentation, Kessler hurried through the auditorium, his luggage in tow, shuffled down the stairs and, before exiting the doors, shared one more comment.
“If we get to December and nothing else has happened,” he said smiling, “we are going to win before a jury in December and we are going to win before a jury in January.”
Services Marketplace – Listings, Bookings & Reviews
