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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThis is a bonus episode of the IBJ Podcast, arriving outside the usual weekly releases on Mondays. Timeliness is an issue here. We’re exploring a legal settlement related to the future of college sports that could be approved by a federal judge any day now.
Our guest is Pete Yonkman, president of Bloomington-based medical device giant Cook Group and its subsidiary Cook Medical. But our subject is a proposed $2.8 billion settlement involving the Indianapolis-based NCAA and the nation’s five largest athletic conferences. Under the settlement, former Division I athletes going back about a decade will be able to receive damages for lost opportunities to profit from their name, image and likeness rights—which we now call NIL. As we’ve come to refer to it in everyday parlance, NIL gives athletes the ability to earn money through sponsorships, merchandise and other promotional opportunities related to their status as athletes.
But the settlement terms also lays out a framework for going forward that smashes the status quo. Under the deal, schools will be able to pay athletes directly for the use of their names, images and likenesses as a form of revenue-sharing. Schools will in effect share 22% of their revenue from media rights, ticket sales and other sources with their athletes. That amount has been capped at about $20.5 million in the first year. However, athletes still will be able to receive money from other NIL sources, and that includes what we call NIL collectives—independent groups, usually founded by alumni and boosters, that pool money for NIL deals benefitting their schools’ athletes. There are rules in the settlement for what qualifies as a legitimate deal via collectives, but this element of the settlement has its skeptics.
Yonkman is the founder of two collectives established to help Indiana University athletes benefit from NIL opportunities—Hoosiers for Good and Hoosiers Connect. He has been steeped for years in the world of NIL agreements, and he has grave concerns about the impact of the proposed settlement on college sports. He foresees a blizzard of lawsuits and a college sports landscape in which a relative handful of schools can attract top talent and compete for championships. Yonkman also suggests a framework for a solution.
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If they have to share this revenue, what about when the students in the lab work on a research project that yields a lucrative find for the university which they license for profit? Will those grad. students and lab assistants who helped make possible the discovery get a share of the revenue? That would be consistent with them sharing income with athletes. Or do we only care about the jocks?