With the House vs. NCAA case officially settled, conferences around the country are making decisions regarding the ability to pay student-athletes, including one HBCU conference.
On Monday morning, the SWAC announced the conference will be opting into the House settlement. This means the conference will pitch in to help the NCAA pay the $2.8 billion owed to former student-athletes over the next 10 years and agree to compensation for student-athletes.
An annual cap is expected to start at roughly $20.5 million per school in 2025-26 and increase yearly during the decade-long deal. These new payments are in addition to scholarships and other benefits the athletes already receive.
The settlement allows schools to create new rules to limit boosters and collectives’ influence. Starting this summer, any endorsement deal between a booster and an athlete will be vetted to ensure it is for a “valid business purpose” rather than a recruiting incentive.
Related to opting in to the settlement, the conference has abolished scholarship caps on conference-sponsored sports, meaning teams can have as many scholarship players as they can support.
Previously, 63 FCS football scholarships could be spread out over 85 players, including partial scholarships. FCS schools that opt in but still face a conference-wide 63 scholarship cap can now spread those 63 scholarships over 105 players instead of 85.
SWAC Commissioner Dr. Charles McClelland said in a statement, “This is undoubtedly a significant moment for the Southwestern Athletic Conference and our twelve member institutions. As we move forward into a new era of intercollegiate athletics, the Southwestern Athletic Conference remains steadfast in our commitment to provide our membership with the resources needed to positively impact our student-athletes academically and athletically.”
What does opting in mean?
Institutions that opt in will also be subject to new roster limits and scholarship guidelines. This antitrust settlement, valued at over $2.8 billion, addresses past restrictions on student-athlete compensation and establishes a revenue-sharing framework.
While schools in the power conferences (SEC, Big Ten Big 12, ACC and Pac-12) will be automatically bound by the settlement terms, schools outside those conferences could opt in or out to the settlement. Schools that opt out will not be able to directly pay players through revenue sharing
What does the decision mean for NIL?
Regarding NIL, the settlement aims to create a more equitable model for college athletics, ensuring that student-athletes receive fair compensation and support.
Participating schools can now offer student-athletes direct NIL payments and other financial benefits, potentially including scholarships above the NCAA’s previous limits. Schools can also engage in direct NIL contracts with student-athletes, such as licensing agreements, endorsement deals and brand promotion agreements.
“Furthermore, opting into the settlement aims to enhance the student-athlete experience, increase visibility and access, and ensure competitive recruitment and positioning within the MEAC and Northeast Conference,” the school said in the release.
For scholarship and roster management purposes, opting into the settlement allows schools, including HBCUs that opt in, to use a portion of their athletic revenue to directly benefit student-athletes, and scholarship limits may be eliminated.
McClelland addressed the House vs. NCAA settlement last winter.
“It is now allowable for institutions to directly give NIL money to their student-athletes. That means there’s going to be an influx of athletes that are looking for NIL payments,” he said in December. “You’re going to have to have some name image and likeness money set aside to compete.”
McClelland explained that the House settlement will impact the finances of every SWAC institution.
“The SWAC conference’s contribution to that [settlement] is $30 million. There’s going to be some challenging times from a financial standpoint.”
To counteract that, McClelland said that resources are being developed to help each school compete in this new era of college athletics.
“We’re going to develop a best practice document that we’ll give to all presidents and chancellors as a guide,” he said. “We are in a good spot from a revenue standpoint; we’re going to be just fine, but it will take some additional effort. We will need NIL dollars on the inside, and we will work with you to help develop that. We’re going to continue to stay on top.”