Texas senator aims to help NCAA regulate athlete payments
Dan Murphy, ESPN Staff Writer
Jan 9, 2025, 04:14 PM ET
College sports officials spent the past four years seeking federal legislation to block student-athletes from gaining employee status and letting the NCAA impose limits on how much money schools and boosters may give to their athletes. With Republicans taking control of Capitol Hill this month, the odds of the NCAA getting its wish are better than ever.
The new Republican leader of the influential Senate Commerce Committee told ESPN that one of his "major priorities" this session is to pass a law to help the NCAA regulate the booming market for college athletes without running afoul of federal antitrust restrictions. A bipartisan group of senators is drafting a measure to help prevent a split among NCAA schools.
Sen. Ted Cruz, R-Texas, said he's not interested in saving the NCAA. Instead, he said he wants to give college sports the legal runway they need to save themselves. "College sports is in crisis right now," Cruz said. "If Congress doesn't act, we risk seeing devastation."
The new Senate majority leader, John Thune, R-South Dakota, previously has introduced legislation addressing how college athletes are paid, and now he is positioned to move a bill forward.
The NCAA turned to Congress after antitrust lawsuits by athletes limited its ability to maneuver. Those lawsuits and other legal challenges convinced lawmakers they needed to take action. Until now, a partisan divide blocked tangible progress. With one political party gaining control of the House, Senate and White House, politicians from both parties are signaling readiness to negotiate and take action.
"The political stars seem to be aligning," said Sen. Richard Blumenthal, D-Connecticut, who has previously worked on bipartisan bills aimed at reforming college sports but does not serve on the Commerce Committee. Blumenthal told ESPN he is working with Cruz as well as Sens. Cory Booker, D-New Jersey, and Jerry Moran, R-Kansas, on a bipartisan compromise. He said he is close to finalizing a "very strong discussion draft" of a new bill.
College sports officials fear that the industry's richest schools will soon have an unsustainable competitive advantage if antitrust lawsuits prevent the NCAA from enforcing regulations that create an equal playing field when it comes to recruiting. While the pending $2.8 billion dollar settlement of the House v. NCAA case would free the college sports industry from past alleged antitrust violations, it does not provide protection from future legal challenges to the spending caps and other restrictions included as part of the settlement.
Many in college sports believe that an unregulated market will inevitably push the small group of schools that generate most of the industry's revenue to sever ties with the rest of their Division I peers. A split could create less interesting matchups for fans and jeopardize the ability of smaller schools to keep funding sports at their current levels. Cruz said he wants to give the NCAA the tools it needs to stop that from happening.
"Nobody wants to see a handful of super schools with unlimited cash, all the best athletes and nobody else even able to survive," Cruz said.
The Big Ten and SEC each raked in more than $850 million in their most recent fiscal year, leaving even their power conference peers in the ACC ($706 million) and Big 12 ($511 million) significantly behind. Their commissioners, Greg Sankey of the SEC and Tony Petitti of the Big Ten, have floated plans that could help the two leagues continue expanding that gap in coming years.
Several industry sources said they expect the biggest SEC and Big Ten schools, such as Alabama, Texas, Ohio State and Michigan, to demand a bigger proportion of their conferences' television earnings when new broadcast deals are negotiated in the early 2030s -- a move that would drive another wedge between the haves and have-nots.
NCAA president Charlie Baker says he views the House settlement and a possible federal antitrust exemption as the first two steps in a nuclear disarmament of the recruiting arms race that he hopes will keep the NCAA's biggest revenue generators from fully splitting away. He and other NCAA officials are scheduled to meet in Nashville next week for their annual convention. Some athletic directors say they want to talk about steps to give the richest leagues more decision-making power.
TO VARYING DEGREES, college sports has always been an industry that operated on an unequal playing field. The NCAA's attempts to create a more competitive balance ran into an unprecedented challenge in 2021 when the Supreme Court ruled against the association in another antitrust lawsuit: NCAA v. Alston.
The court's 9-0 decision wiped out the NCAA's long-held claims that, because college sports are more of an educational endeavor than an entertainment business, the industry deserved special exemption from antitrust law in courtrooms. The Supreme Court said it is up to Congress to outline any such exemption.
The schools that comprise the NCAA have created a long list of rules that effectively limited athletes' market power, which made the association vulnerable to antitrust litigation. After the Alston ruling, federal judges have consistently shot down any NCAA rule that threatened to limit an athlete's potential earnings. Courts struck down transfer restrictions in West Virginia and Ohio. Tennessee and Virginia lost bids to prohibit athletes from negotiating endorsement deals before arriving on campus. Most recently, a court injunction blocked Tennessee's rules limiting the years that junior college athletes can play after transferring to an NCAA school.
Since 2021, university and conference leaders have asked Congress to restore the special status that the Alson ruling wiped away. For most of that time, federal lawmakers have been divided along party lines, with Republicans tending to side with the NCAA's antitrust-exemption efforts and Democrats defending athletes' right to bargain collectively. Despite more than a dozen hearings and even more proposed bills, the parties made no significant progress toward a solution.
Republicans favor restoring the NCAA's ability to make its own rules without the government getting in the way.
"No one in their right mind wants Congress deciding what constitutes pass interference," Cruz said. "We don't want politicians in the middle of deciding how sports will be governed."
Democrats have been more skeptical of writing the NCAA a blank check based solely on schools' promise that they would do more to serve athletes. Democrats' proposals included more detailed and player-friendly provisions such as a pathway to forming player unions and an athlete's "bill of rights," which demanded the NCAA do more to provide athletes with items such as medical care and educational benefits.
Blumenthal said he believes some of those provisions should still be included in future legislation. He also said he would like to see an oversight agency established in the new law to ensure the NCAA is doing enough to protect athletes physically and from exploitation.
As the threat of a big split in college sports looms, senators from both parties now agree that some imperfect action may be better than doing nothing at all. The House settlement, named after principal class-action plaintiff and former Arizona State swimmer Grant House, significantly increases the number of resources -- money and scholarship packages -- athletic departments will pass on to their students. Those changes have helped push politicians on both sides of the aisle to act.
"For too long the NCAA failed to address issues to protect athletes, but obviously there is new leadership there at the NCAA," Blumenthal said. "There is also a real need to make sure there is a level playing field among schools, or at least as fair as it can be."
On Jan. 3, Cruz took over as Commerce Committee chair, which gives him the authority to bring a bill on college sports to a vote. He said he still needs some bipartisan support to garner the 60 votes in the Senate (for now, the GOP majority is 51 seats) that his bill would need to avoid a filibuster.
No longer in the majority, Democrats like Blumenthal express a greater willingness to compromise than before.
OTHER INTERESTED INDIVIDUALS -- athletic directors, sports attorneys and businessmen who operate the booster collectives that help fund their schools' athlete payrolls -- say the House settlement and the proposed help from Congress won't give the NCAA the tools it needs to slow down the race for more revenue.
Many believe a collective bargaining agreement with some form of a player association will be required to effectively impose a salary cap. Professional sports leagues are able to implement salary caps without violating antitrust laws because they negotiate the terms of the arrangement with a players' union.
To legally form a union, players need to be deemed employees of their teams or leagues. The NCAA is adamantly opposed to college athletes becoming employees, and Cruz agrees, saying that employee status "would do enormous damage to the collegiate experience to college sports." A central part of the bill he plans to introduce would declare that athletes are not employees, he added.
That provision could be challenged as unconstitutional under the Equal Protections clause, according to attorney Paul McDonald, who argues in an ongoing federal lawsuit that all Division I college athletes are employees.
Blumenthal said lawmakers are discussing a compromise measure to carve out a special status for college athletes to bargain collectively without having to become employees.
"That might be an option," Blumenthal said. "Enabling collective bargaining without employment status certainly has to be taken seriously. We're talking about a variety of different possibilities."
Congressional aides familiar with the negotiations said collective bargaining is a red line, no-go for Cruz.
Speaking to reporters in Las Vegas last month, Baker avoided answering questions about the NCAA's stance on a potential special carve-out for collective bargaining.
The NCAA and the plaintiff attorneys in the House case designed their settlement in hopes that it would serve as an unofficial collective bargaining agreement, with the plaintiff attorneys essentially negotiating a salary cap on behalf of all Division I athletes. The terms of the settlement allow each school to spend up to roughly $20.5 million per year on direct payments to its athletes starting this summer. That number is slated to rise on a regular basis during the 10-year lifespan of the deal.
However, it will remain difficult for the NCAA to enforce rules that stop third parties -- boosters and collectives -- from spending over the cap to gain a competitive edge. The bargaining agreements in pro sports leagues strictly prohibit such payments, but even before the House settlement details have been finalized, schools and their collectives are putting plans in place to work around its intent of creating a fully equal playing field.
"The real big differentiator right now is, for lack of a better term, the above-the-cap compensation. And I think everybody is hyper-focused on what that looks like, what those amounts need to be," said Walker Jones, a former Under Armour executive who now runs the Grove Collective, which supports Ole Miss teams. "If revenue share is going to even the playing field for the most part, what's going to be our competitive advantage going forward? I really think it's going to be the entities like ours that can get really creative and work within the framework to provide supplemental compensation."
Organizations such as the Grove Collective are not rogue operators. Almost universally, those collectives work closely with athletic department administrators to steer as much money as possible to their athletes. This puts many athletic directors in a position where they are currently aiming to create rules that establish competitive equity when they meet with their NCAA peers, while simultaneously brainstorming ideas to find a competitive advantage when they meet with their collective operators.
"It might be the same meeting," said Russ White, who heads The Collectives Association, a trade group representing more than three dozen collectives at power conference schools.
Jones declined to say what Grove Collective's financial target is for the coming football season but said it's evident in this winter's market for transfer players that collectives will need to supplement a school's payments to build a competitive roster. According to multiple industry sources, at programs hoping to fund a roster capable of competing for a spot in the College Football Playoff, collectives will have to generate somewhere between $5 million to $10 million on top of their school's payments.
Jones said he doesn't view collective bargaining as a "silver bullet" for the NCAA's problems but does believe it would go a long way in creating more legal peace.
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