Can CU Buffs, CSU Rams afford to pay athletes in the House NCAA settlement? “It’s a jumbled mess”

Chuck Neinas was hailed four decades ago for letting the beast out of the box. How was he to know darn thing would eventually start eating its own?

“At home, I’d been a hero because I was responsible for the Supreme Court (case) with the College Football Association,” the former Big Eight and Big 12 commissioner, now retired in Boulder County, told The Denver Post recently. “Now my son says, ‘Dad, you’re responsible for all that TV money.’ That I’m responsible for the whole damn thing!”

The grandfather of chaos had noble intentions when he helped spearhead the old CFA’s historic Supreme Court victory in 1984. That particular ruling freed up conferences and schools to negotiate their own television rights packages, which had previously been capped and commandeered by the NCAA.

Roll the clock ahead four decades, and you know how the rest of that particular story played out.

Without NCAA vs. Board of Regents of the University of Oklahoma, there isn’t the same explosion of television revenue for collegiate athletic departments. And therefore no House vs. NCAA, which recently produced a settlement that figures to change the face of college athletics forever.

With the ghosts of ‘84 perhaps echoing in their lawyer’s ears, the NCAA agreed to a $2.77 billion settlement that will pay more than 15,000 Division I athletes who played from 2016 through 2021 rather than go forward with a January 2025 trial.

So, given the diversity of college athletic departments both inside and outside Division I in Colorado, what impact will the House vs. NCAA have across the Centennial State?

“From what you read, each institution determines how they want to handle it, so they won’t be uniform,” Neinas said.

“For example, does CU continue to want to fund skiing? There’s no money coming from skiing. It’s also expensive and there’s also a lot of history there. I think most everybody is of the opinion that the number of sports sponsored by institutions will be downgraded.”

•••
Thanks to the money train in the wake of the 1984 CFA ruling, we largely know how we got here. But where the heck are we going?

The NCAA and its members agreed in California court to pay out roughly $2.8 billion in damages as soon as late 2025. The top five — or “Power 5” — conferences, including the de-fanged Pac-12, are in line to cover 40% of the cost, with the remaining 27 Division I conferences splitting the other 60%.

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The latter part of that agreement’s getting blowback from leagues outside the SEC, Big Ten, ACC and Big 12. And the tensions have been exacerbated by another wrinkle in the settlement — a pledge to share revenue with college athletes over the next 10 years.

Every Division I Colorado school is on the hook for damages owed from 2016 to ’21, money that will be withheld by the NCAA like garnishing wages. But some cuts will be felt more deeply than others.

According to documents obtained by Yahoo Sports, a major FBS program such as CU, which moves from the Pac-12 to the Big 12 in August, would expect to owe $2 million a year in back payments, or roughly 2% of its reported athletic revenue for 2022-23. CSU, which plays in the Mountain West, could see NCAA distributions drop by approximately $500,000, or less than 1% of its reported ’23 revenues of $64.3 million. UNC, which plays in the Big Sky, could expect a drop of roughly $200,000, or less than 1% of its reported athletic revenues of $22.4 million in ’21-22.

The additional challenge in a potential House settlement would come from revenue-sharing going forward. Division I schools either must pay (the Power 5) or choose to pay (everyone else) once the settlement is approved and can do so from a pool of up to $21 million annually. That’s roughly 22% of each Power 5 member’s expected broadcast revenue, sponsorships and ticket sales. As with the NFL salary cap, that $21 million rises accordingly with revenues. And it doesn’t include educational benefits such as scholarships, which are paid out separately.

“I expect the best schools will remain the best and get the best players,” CSU alum and Ohio University professor Dave Ridpath said. “The Power 5 will still have (an) inherent advantage due to access to playoff and greater name/image/likeness money.

“That helps CU more. And I don’t expect that CSU’s fortunes will alter much, but there may be more balance and parity to an extent as we have seen with NIL — but in the end, I think the big boys will dominate.”

The Buffs will be contracted to share revenue. If the Rams want to compete with CU and its peers on the recruiting trail, they’ll have to find a chunk to share, too. The UNC Bears don’t have that money. And likely never did.

CU reported athletic revenues of $94.9 million for the 2021-’22 fiscal year, per USAToday.com’s database, while CSU reported $61.26 million. Air Force saw $76.59 million in revenues.

“There could be a lot of fallout,” noted Mark Conrad, professor of law and ethics at Fordham’s Gabelli School of Business in New York. “Because there are still a number of T’s that have to be crossed and I’s that have to be dotted. For one thing, the settlement has to be approved by the judge. The second thing is that some of the members of the (House suit) can opt out of the settlement. And there’s the possibility of that as we have another case that’s still pending.”

One that hits close to home.

***
Former CU Buffs tailback Alex Fontenot and former Buffs women’s basketball player Mya Hollingshed filed a class-action lawsuit last fall against the NCAA and Power 5.

In May, a Colorado judge dismissed the NCAA’s attempts to move the case to California in an effort to fold it into the House settlement. Fontenot’s attorney, Garrett Broshuis, declined to comment on specifics when contacted by The Post but said they intended to continue the suit and feel some former student-athletes could elect to opt out of the House settlement and join their class-action case instead.

“What’s interesting in the (House) settlement talks is that about 20% of broadcast revenue (exists) as a relative salary cap for the students, while with the professional leagues, it’s more like 50% of the revenues, more or less,” Conrad continued. “So the (House) settlement could fall apart like a house of cards.

“Clearly it’s a major settlement. Clearly, it ends the old model of ‘student-athlete’ and ‘amateur sports.’ That’s history.”

The NCAA plans to withhold distributions to Division I members to help defray costs of the settlement. That includes men’s basketball and women’s basketball distributions from the NCAA tournaments, which will be felt more significantly at smaller schools that don’t play football, such as the University of Denver.

“We are closely monitoring recent NCAA developments, evaluating the national landscape and the potential impact on DU,” Pios athletic director Josh Berlo, whose men’s hockey program has won two NCAA championships in the last three years, said in a statement provided to The Post. “Regardless, we are committed to sustaining our elite-level academic and broad-based national athletic excellence.”

The NCAA doesn’t plan to alter distributions to Division II and III schools, so programs in the Rocky Mountain Athletic Conference, including Colorado School of Mines, aren’t expected to feel a direct pinch.

Indirectly, it could be a different story. The opportunity for student-athlete compensation at the D-I level opens up greater financial discrepancies between what a recruit could earn at, say, UNC or Montana as opposed to Mines or Fort Lewis.

The money gaps throughout college sports, in the meantime, seem destined to only grow wider: between D-II and D-I; between the Power 4 and the rest of their D-I peers; between the SEC/Big Ten and the ACC/Big 12. If the settlement gets over the line, the paths toward a consolidated super league for college football, complete with its own commissioner, rules and television contracts, look less like speculation and more like an inevitability.

“I don’t know much input those (small conference) schools had, and I’d suspect many of those athletic directors are not terribly happy about this because it’s going to (come out) of their budgets, and that’s a big factor,” Conrad said. “For mid-majors, it could be a major issue because they don’t have the broadcast deals and broadcast dollars (that Power 4 programs do).”

The NCAA, as part of the fallout, is seeking to eschew scholarship limits for roster limits. The settlement won’t eliminate the impact of collectives that crowdsource money for student-athletes’ NIL compensation. But it could move those operations from adjacent to under a university umbrella. That would necessitate either funneling current athletic staff into that department or creating a new staff altogether.

And what of the guardrails surrounding Title IX, the federal legislation enacted in 1972 to guarantee equal opportunities at a campus level for women and men in higher education?

The settlement says, in summation, that athletes will be compensated per fair market value. But that market could skew the numbers so that anywhere from 90-95% of back payments get funneled to former Power 5 football and men’s basketball players.

Legal experts disagree on whether Title IX applies to the expected terms of the settlement, which will likely spur further challenges in court.

“Title IX is basically the biggest shadow over this thing,” Conrad said. “If you have a schematic where men’s teams are being paid more than women’s teams, you’ll have the likelihood of Title IX litigation, and that’s also not addressed by the settlement.

“This could be a good employment opportunity for lawyers in the next few years. But it also does create an uncertain world.”

•••
It’s a world many Power 4 schools saw coming, though — which explains, in part, the Buffs’ decision to leave the uncertainty of the Pac-12 for the relative stability of the Big 12.

CU chancellor Phil DiStefano and athletic director Rick George declined requests for specific comment, referring to a joint statement in which they describe the current landscape as “unprecedented times, and these decisions will have a seismic effect on the permanent landscape of collegiate athletics.”

Former CSU athletic director Joe Parker, who was recently appointed as deputy AD at the University of Iowa, told The Post that direct compensation to student-athletes will be a challenge for the Rams — but not an insurmountable one.

“I’d imagine they’re going to be able to compete,” Parker said of CSU, where he served as AD from 2015 until this past February. “It’s just going to get harder. But it’ll stabilize. And I think, for everyone, just knowing what the rules of the game were (is) going to be key in building whatever strategy you feel comfortable with.

“If the settlement is approved and it sticks, it gives everyone a chance to kind of build (within) the model.”

Parker could imagine fewer scholarships for football, as well as caps on spending toward staff, equipment and food/nutrition. The facilities arms race is going to have fewer schools participating as well.

“I think it does (slow down),” Parker said. “I think you saw Iowa State had to make a decision relative to a project where they had to put a pause on it.

“I got the feeling probably 14-16 months ago that once that train had left the station and you’re on this path, where it’s going to be different. I think for me, and for a lot of people, you just want to know what the rules of the game are.”

On that front, join the club.

“Everything I grew up with is gone,” Neinas sighed. “I had more than 50 years in college athletics and everything I grew up with is gone. No. 1, no one talks about education anymore. And No. 2, the idea of a level playing field is out the window. And recruiting is an absolute mess, because they’re openly bidding for talent.

“It’s a jumbled mess. To say the least.”

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