Feds: Title IX will apply to college revenue share

An official for the U.S. Department of Education, the federal enforcer of gender equity in sports, said Title IX rules will apply to future revenue dollars that schools share with college athletes, but the department declined to offer guidance on how schools should distribute the money between men and women to comply with the broad language of the law.

“Schools must provide equal athletic opportunities based on sex, including with respect to benefits, opportunities, publicity, and recruitment, and must not discriminate in the provision of financial aid,” Catherine Lhamon, the assistant secretary for the department’s Office for Civil Rights, said in a written statement to ESPN. “In the new NIL environment, these same principles apply.”

The NCAA and its power conferences agreed in May to settle a trio of antitrust lawsuits, paving the way for colleges to share up to $20 million in revenue per year with athletes starting in 2025. The details of the settlement, which still must be approved by a judge, will not address how schools should handle Title IX requirements, according to multiple sources involved with crafting the agreement.

The department did not answer a question about whether the revenue share dollars would be deemed financial aid, which would be required to be distributed to men and women athletes proportionally based on roster spots. To date, every dollar a school provides directly to its athletes has been intended to cover educational expenses and thus has been considered financial aid.

Without direction from the federal government, athletic departments will have to decide how to allocate the new revenue share money between men and women. Administrators will have to choose between paying a higher portion to men, risking potential lawsuits, or equally sharing revenue with men and women, risking falling behind competitors in football recruiting.

For some football players, the lack of guidance will mean they’ll have to decide whether to remain a part of the antitrust case settlement, signing away their future ability to sue, without knowing whether the new system will lead to more or less income than they’re currently receiving in the current system.

In 2022, shortly after the NCAA changed its rules to allow athletes to start making money through NIL deals, U.S. Secretary of Education Miguel Cardona told ESPN he wanted to get ahead of the foreseeable challenges of determining how Title IX applies to these new opportunities for athletes.

“Some of the concerns I have is that it’s going to be the male athletes getting paid and [the] just-as-committed, just-as-hard-working women athletes, not. That, to me, speaks to the need to make sure we’re communicating proactively, that this is being addressed,” Cardona said at the time. “… Universities must adapt and create structures that are monitoring this, that are communicating what they’re doing to proactively create equity. Let’s not wait for the problem. … I think we have an opportunity here to really learn from maybe the past and create structures here, or promote structures at the federal level that could be visited at the state, at the college level, that ensure equity, that ensure access.”

Education department officials this summer told ESPN they have no timeline for adding clarity to the specific questions that schools are now trying to answer.

There are two new ways in which schools can help enrich their athletes. In addition to the potential upcoming revenue-share money, recent NCAA rule changes allow all schools to assist athletes in finding and fulfilling name, image and likeness deals funded by third parties.

Schools in some states have already started channeling university dollars through a third party, which in turn pays athletes for endorsement activities. Many other schools are considering this as a potential model for distributing revenue share dollars in the future. In all cases, the highest-ranking government official overseeing Title IX compliance says schools are responsible for making sure those benefits are equitable for men and women.

“As has been true all these decades, Title IX requires schools to ensure that when accepting and using private donations, the schools do not create disparities in benefits, opportunities, and treatment on the basis of sex that result in the denial of athletic opportunities,” Lhamon wrote. “Likewise, Title IX prohibits schools from providing significant assistance to any outside organization that discriminates on the basis of sex. These core Title IX principles operate unchanged today.”

Title IX requires schools to provide roster spots on varsity teams that roughly line up with the gender breakdown of their student enrollment, and provide financial aid that is proportionate to those roster spots. If 55 percent of a school’s student body is female, then 55 percent of its varsity roster spots have to go to women’s sports and 55 percent of its financial aid dollars need to go to women.

When it comes to revenue share dollars provided directly by the schools, athletic department officials have told ESPN they don’t know whether they must give a proportionally equal amount of money to men and women or if equitable treatment means that they can allocate the roughly $20 million based on each athlete’s value in the NIL market.

If schools decide to view the new revenue sharing money as financial aid akin to the scholarships or cost-of-living stipends they already provide to athletes, roughly half of that money will need to go to women athletes on most campuses. In that case, a football team would collectively receive, at most, $10 million in revenue share — or even less at schools that want to be competitive in basketball or other men’s sports.

According to multiple industry experts, football players at most playoff-contending schools are already receiving more than $10 million from NIL booster collectives. But some terms of the pending antitrust settlement might try to eliminate this method of paying players, according to sources who have viewed the initial terms. If that occurs, football players on those teams who remain in the settlement would give up their right to sue the NCAA for any future antitrust violations, and in exchange, their income would likely shrink.

Some schools are exploring potential plans to spend 75% or more of the new $20 million revenue-sharing fund on football players, according to multiple athletic department officials. Those schools are using the last three years of NIL deals to show that football players receive 75% of the money in the current market for athletes, according to data collected by companies such as Opendorse and Basepath. This formula would lead to roughly $15 million flowing to a school’s football team, which would likely lead to an increased income for some players.

All college athletes will have an opportunity to object to the settlement before it is finalized. However, their window to raise objections is expected to open later this year, and in typical class action settlements, these windows only remain open for 60 to 90 days. It is unlikely that players will have a clear answer on how Title IX will be applied to their future revenue-sharing dollars by the time that window closes, considering the timing of how long it typically takes the education department to craft and vet new policy.

Multiple attorneys and organizers who are advising athletes on the changing legal landscape of college sports told ESPN they are eager to see the details of the proposed settlement, but expect that players will have a public response to the potential changes in the near future. Jim Cavale, who founded a group called Athletes.Org to serve as a new type of players’ association, said issues such as Title IX distribution make it important for athletes to organize themselves by sport, as some major looming decisions will have different implications based on the sport they play.

“Different athletes have different problems and opportunities,” Cavale said. “We are talking to leaders of women’s basketball, men’s basketball and football and answering their questions so they’ll be prepared to talk for themselves in the near future. …Athletes are hungry for information and for having their questions answered.”

Coaches also will soon want a clear picture of their budget for revenue-sharing dollars to give recruits a better idea of how much money they might receive starting next fall. Coaches will begin building their rosters for the 2025 season in late 2024, during a time period when the transfer portal opens at the end of the upcoming football season and in the lead up to national signing day.

Athletic directors have already expressed a desire for better guidance on how to distribute revenue share dollars.

“We have to find out what the courts or some kind of legal authority says, whether it’s the Office [for] Civil Rights or a judge, about how we need to apply until we have that direction,” Florida athletic director Scott Stricklin said in May.

New Texas A&M athletic director Trev Alberts said he is worried that if the laws remain murky, schools will be able to gain a competitive advantage by testing the boundaries of gender equity.

“Like Texas A&M takes a very conservative view, X, Y, Z school takes a very liberal view and suddenly it’s disparate,” Alberts told ESPN in May. “We can’t do that. So I think it has to be a consistent application.”

Despite the concern, records and interviews show the NCAA and its schools have not contacted the education department to give them direction. ESPN submitted a public records request to the department, asking for copies of any correspondence from the NCAA, the major conferences, or colleges regarding NIL from January 2023 through April 2024. The department said there were no responsive records. An education department spokesperson also said those parties have not contacted the department with questions about revenue-share dollars either.

ESPN asked the 20 athletic departments with the most college athletes whether they had sought guidance from the Department of Education. More than half those schools declined to provide an answer. Several said it was too early in the process of the antitrust settlement to make those efforts, and others said they were consulting with their lawyers and conference officials. One athletic department spokesman, who did not want to be identified, noted that they looked forward to getting guidance from education department officials because they should be the ones who take the lead.

Because of the upcoming presidential election, the education department’s stance on Title IX issues could change significantly between the time when the antitrust settlement is finalized and when revenue sharing with players begins. Even if the current department makes it clear how they believe that money should be divided, new leadership could make changes. A spokesperson for former President Donald Trump’s campaign did not respond to a request for comment sent Friday.

Members of Congress could also craft legislation that provides clarity on the future business model of college sports. But Rep. Lori Trahan (D-Mass.), who played volleyball at Georgetown and has been an active participant in the debate about college sports, said she did not think Congress would act before the antitrust settlements were completed, if they act at all. Federal lawmakers have debated several bills related to college sports in the past four years, but they have not made significant progress toward passing a law.

“I’ve made it a point to avoid getting ahead of something as consequential as the potential for a settlement in one of the main court cases before it’s official,” Trahan told ESPN. “What I can say is that I have serious concerns about leaving it to conferences and schools that have failed to live up to Title IX. And the same goes for the Department of Education, [which] has allowed glaring loopholes that deprive women of these roster spots and [allowed them] to be exploited for years.”

In the absence of an answer from the education department or Congress, athletes and schools will likely have to wait for a lawsuit and a judge’s ruling to create a legal standard for how to share their money.

Arthur Bryant, a Title IX attorney who has successfully sued more than a dozen college athletic departments, said he believes any money that comes directly from schools needs to be shared in proper proportion between men and women.

“If a school is not distributing that money proportionally, they are looking for lawsuits,” Bryant said.

Bryant is currently representing a group of Oregon volleyball players who sued the school for allegedly violating multiple Title IX requirements. Among the allegations, the players argue that Division Street, an NIL booster collective that exclusively supports Oregon athletes, should be required to treat men and women equitably — the first legal challenge to address NIL money. Oregon’s attorneys filed a motion to dismiss that claim in early July.

If any attorney is going to challenge the way a school distributes the new revenue-share dollars when that money starts to flow in 2025, a group of active college athletes would have to sue their school and allege that they should be receiving a bigger cut of the revenue share dollars distributed by the athletic department. The litigation process could take years before it is fully resolved in a way that sets a precedent for the rest of college sports.

ESPN’s Heather Dinich contributed to this report.