The University of Tennessee will pay past and future athletes under a salary cap, adjust its NIL approach and maneuver through delicate Title IX debates as part of the NCAA’s landmark $2.8 billion antitrust settlement requiring revenue-sharing for athletes.
Last week, the NCAA, power conferences and lawyers for the plaintiffs in three antitrust cases approved a proposed settlement for enormous damages over a 10-year period that will transform college sports from amateur athletics to closer to a professional model.
The arrangement will have a future impact of at least $20 million per year on athletic department budgets at UT and other schools in power conferences choosing to pay athletes under a salary cap, which will increase over time.
These changes could take hold as early as fall 2025, pending approval from a federal judge and other legal hurdles.
Details are still being hammered out. But here are the key questions of how the settlement and revenue sharing could impact UT.
Is this settlement good for Tennessee?
Well, the NCAA likely would’ve lost the cases and paid more than $20 billion in damages. That cost would’ve trickled down to member schools like UT and potentially bankrupted the NCAA.
So this was perhaps the best of bad options.
The “have’s” can survive and even thrive in this system, and UT is among them. The “have-nots” like mid-major schools will be left behind.
In the 2023 fiscal year, UT athletics topped $200 million in revenue for the first time in school history, continuing a staggering explosion of growth under athletics director Danny White.
Now UT must tweak its strategy to maximize that growth under a revenue-sharing system. Fortunately, White has been among the most forward-thinking administrators in anticipation of these changes.
“We’ve been spending a lot of time thinking about it.,” White said on May 1, as SEC athletics directors were discussing acceptance of the settlement. “We have this really special thing called college athletics in this country, and we have an enormous responsibility to make sure we fix a structure that’s been proven to be not legally defendable, not financially sustainable.
“I think it’s been disappointing for the past couple of decades to see people in important positions not take care of business and make the adjustments. We need to see that happen now.”
Will UT athletes be school employees?
The NCAA is determined to not let that happen. But athletes organizing in a players union may be inevitable, especially because a salary cap imposed without negotiating with athletes could attract further lawsuits.
Another ongoing case and complaints being pursued through the National Labor Relations Board could determine whether revenue is shared with players as student athletes or as school employees.
The latter would spark debates about whether athletes in non-revenue sports should be compensated.
Will NIL still exist at Tennessee?
Yes. Athletes will continue to be allowed to receive money for activities connected to the use of their name, image and likeness, in addition to revenue sharing.
But NIL collectives like Spyre Sports, which pays UT athletes, could move under the direct oversight of the athletic department.
Plus, NIL could become what it was initially intended to be: A way of paying the most marketable athletes to do endorsem*nts, commercials and public appearances.
In other words, athletes wouldn’t be paid NIL money simply because they are on the roster as de facto pay-for-play arrangements.
This likely would involve the development of a reporting structure for NIL deals and a way to assess athlete's fair market value. It would take a major undertaking because NIL rules are currently suspended by an injunction in the state of Tennessee’s antitrust suit against the NCAA.
How much will UT athletes be paid?
They’ll still get full scholarships and a cost-of-attendance stipend. Many will still receive money for their NIL rights.But schools could determine how much individual athletes are paid via revenue sharing.
Expect something akin to a professional model with a salary cap and possibly multiyear contracts, which could calm the transfer portal and bowl opt-outs.
Would UT pay the quarterback more than a star pass rusher? Would it pay veterans more than five-star recruits?
UT likely would hire a general manager to make those hard decisions. And painstaking work of recruiting could be minimized because compensation packages would determine which school a prized prospect chooses.
Will Lady Vols be paid revenue under Title IX?
That’s debatable, and not just for the Lady Vols but for all athletes in women’s sports.
On one hand, women’s sports don’t typically generate a profit. They are subsidized by football and men’s basketball.
In the 2023 fiscal year, Lady Vols basketball generated $3.9 million in revenue but had $8.9 million in expenses for a $5 million deficit. In the same year, UT football had a $75.8 million surplus and UT men’s basketball had a $5.5 million surplus. Olympic sports for men and women are also propped up by those profitable sports.
On the other hand, schools must consider implications of Title IX, the federal gender-equity law. The legal argument is that if money is coming from schools, the law applies.
Some college sports power brokers are trying to figure out how to separate football and men’s basketball players into a players association and avoid sharing revenue with female athletes.
Others don’t think it’s worth the fight, either legally or from a public relations standpoint. In either scenario, expect UT to be competitive in women’s sports, as it also has been.
Will UT rosters grow or shrink?
That’s to be determined and different for each sport.
Some schools will cut sports that don’t generate revenue. Some schools will trim rosters to save money. Don’t panic. UT would be among the last schools to do either.
But under the new system, revenue will be shared by all athletes and the NCAA rules will shift from scholarship limits to roster limits.
That means UT baseball could pay 20 or 30 players rather than the 11.7 scholarships currently allowed under NCAA rules.
That also means UT football could cut walk-ons in order to divert money to its highest-paid players. Under the current system, UT can carry as many as 120 football players, including 85 on scholarship.
The NFL pays 53 players on an active roster, additional players on the injured list and 16 players on a practice squad. Look for FBS schools like UT to move closer to that model, perhaps around 80 or 90 players total.
But some schools could cut rosters across the board to trim payroll, especially if athletes from non-revenue sports are included in revenue-sharing.
Will this stall UT’s stadium upgrades?
Probably not. Most of the major work is already done or underway.
Phase 1 of a $337 million renovation to Neyland Stadium will be complete in 2026. That project will be fully paid for without tuition or tax revenue.
Thompson-Boling Arena at Food City Center will undergo an $85 million renovation thanks in part to a 10-year, $20 million naming rights deal.
Lindsey Nelson Stadium is being renovated at a cost of at least $100 million. Phase 1 is done, and phase 2 will be completed for the 2025 season.
UT has focused on improving fan experience and generating revenue, which will be the new approach in facility upgrades across college sports. But the days are over of constantly improving facilities used only by athletes like weight rooms and locker rooms. Instead, that money often will be paid to athletes directly.
Will former Vols get backpay?
It appears so.
Payments to former athletes are part of the settlement, with backpay for damages potentially reaching as far back as 2016. That’s four years prior to when the House v. NCAA suit was initially filed, the reach-back period allowed under antitrust law.
If so, that means UT players from the 2016 football team like Joshua Dobbs, Alvin Kamara and Derek Barnett could be paid from this settlement. But their former teammates who didn’t have NFL careers could be compensated, as well.
And that means UT basketball players as far back as 2016 like Robert Hubbs and Grant Williams may also get backpay. Athletes from the ensuing years, especially in football and basketball, could also be eligible for backpay.
Some former football and basketball players could receive tens of thousands of dollars, including TV broadcast money that would’ve gone to them if revenue sharing existed at the time. But the formula for those payments is far from being finalized.
Why did this settlement happen?
The NCAA and universities in major college sports simply made too much money over the past several years to rationalize keeping it away from the athletes.
For example, football coach Phillip Fulmer got a raise to $1 million annually after he led the Vols to the 1998 national title. Current coach Josh Heupel earns $9 million a year.
Similar salary increases, along with bloated athletic budgets, have become common across college sports as TV revenues have skyrocketed.
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Who will pay money to athletes?
UT, like all schools, must be strategic and efficient with its spending. That could impact coaches’ salaries, athletic department payroll, ticket prices and other budget items.
About 41% of the $2.8 billion in damages will be paid by the NCAA central office.
The remaining 59% will come from reductions in distributions from Division I members schools and conferences. Here is that breakdown:
- 24% from power conference members like UT
- 10% from Group of Five conference members
- 13% from Football Championship Subdivision members
- 12% from members that don’t participate in football
Steve Berkowitz of USA TODAY contributed to this report.
Adam Sparks is the Tennessee football beat reporter. Emailadam.sparks@knoxnews.com. X, formerly known as Twitter@AdamSparks. Support strong local journalism by subscribing at knoxnews.com/subscribe.
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