Other States Gear Up for the House NIL Agreement: Will Florida Schools Be Able to Keep Up?

TALLAHASSEE, Florida — Florida lawmakers have shown reluctance to modify laws regarding the compensation of student athletes, as college sports navigate a costly and uncertain new era prompted by a significant NCAA court settlement anticipated in April.

Meanwhile, neighboring states, home to fierce competitors of Florida schools, are taking proactive measures.

The case of House v. NCAA, which stems from three antitrust lawsuits against restrictions on benefits and publicity rights for players, is expected to enable schools to compensate student athletes directly for the first time. As a result, Florida's neighbors are swiftly positioning themselves to exploit the implications of this ruling.

This week, Arkansas lawmakers passed a bill that permits schools to conduct raffles to raise funds for sports programs. Meanwhile, Georgia and Alabama are working on legislation to exempt student athletes from income tax, enhancing the appeal for athletes considering schools in their states.

In contrast, Florida’s Legislature, recognized as one of the pioneers in establishing a name, image, and likeness policy, seems unlikely to alter its law or initiate new funding this year. Instead, university system leaders are expected to relax spending restrictions, allowing schools to tap into diverse revenue streams for their athletic departments.

“If we don’t do something, we’re not going to maintain our competitiveness,” said Jennifer Condon, the University of South Florida’s vice president of business and finance and chief financial officer.

Florida universities are facing rising compliance costs associated with the NCAA lawsuit and additional expenses to compete with neighboring states. The inadequacy of a definitive plan for adhering to the forthcoming settlement could lead to diminished revenues, weakened athletics programs, and reduced student enrollment incentives.

The court ruling, which may affect $2.8 billion, is expected to occur in April, coinciding with the conclusion of Florida's legislative session.

If enacted, the House v. NCAA settlement could transform collegiate sports by enabling schools to begin direct payments to student athletes as early as this fall. In the year 2025, schools may share up to $20.5 million in athletic revenue with players, as per the settlement's cap.

Additionally, the NCAA is poised to eliminate limits on scholarships and impose ceilings on roster sizes, resulting in smaller teams while allowing schools with sufficient budgets to offer scholarships to more athletes.

Participating in this revenue sharing arrangement is anticipated among most institutions in the four “power” conferences — the Southeastern Conference, Atlantic Coast Conference, Big Ten, and Big 12. According to State University System Chancellor Ray Rodrigues, up to 10 out of Florida's 12 state universities could opt to engage in revenue sharing.

Larger universities like the University of Florida, Florida State University, the University of Central Florida, USF, Florida Atlantic University, and Florida International University are likely to share revenue with student athletes. Conversely, institutions such as Florida Gulf Coast University, the University of North Florida, Florida A&M University, and the University of West Florida could face tougher decisions. New College of Florida and Florida Polytechnic University do not have eligible sports programs.

University officials cautioned Florida lawmakers that forfeiting the revenue share would “completely erode your competitiveness” in collegiate athletics.

Despite the option to share a lesser amount of revenue, the associated costs are burdensome, especially for colleges at lower competition levels, like FAMU, which belongs to the Southwestern Athletic Conference and plays below larger programs like UF and FSU.

“When you say there’s a $20.5 million cap, well, that’s more than our annual budget,” said Angela Suggs, FAMU’s vice president and director of athletics.

Rodrigues estimates that the NCAA agreement could impose a combined annual cost of $170 million on Florida’s university system. This figure includes up to $20.5 million in revenue sharing for some universities and additional expenses related to $2.8 billion in back pay for former student athletes. These costs, linked to a class-action settlement concerning past NIL payments, are expected to fluctuate among colleges.

Over the next decade, this amount translates to $7.5 million for USF, nearly $4 million for FIU, and $2.7 million for FAMU, according to school officials.

Florida lawmakers have expressed no intention of providing state funding for sports programs, a practice that has never occurred in the state. Members of the State House, who recently held a three-day workgroup to discuss NIL issues, asserted that “the second you open that door, all hell is going to break loose.”

“Teachers are watching, going, ‘Man, I have a hard time just living in Florida with the amount of money I make,’” said state Rep. Omar Blanco. “And yet we’re talking about millions of dollars here that we might potentially have to get involved with to help save the athletic programs in our state colleges.”

Like their counterparts nationwide, Florida schools are exploring various revenue avenues to fund college athletics. Key strategies include fundraising, exploring jersey patch advertisements, implementing new ticket sales fees, and selling naming rights for stadiums.

However, funding gaps are already becoming apparent.

Under the proposed House settlement, FIU could gain 195 new scholarships, which would require $5.5 million — an amount that exceeds their current budget, according to Athletics Director Scott Carr.

For instance, the scholarship cap in baseball is expected to rise from 11.7 to 34. Yet FIU will still only have 11.7 scholarships available in the coming year, Carr noted.

“We’ve got Pitbull Stadium now down there right in Miami,” Carr said, referencing the stadium sponsored by the renowned musician. “Our goal is to go all in on hosting as many concerts down there as we can and generating a new revenue source that can go toward scholarships and toward NIL.”

States outside Florida are exploring various legislative measures to adapt to the House settlement.

For example, West Virginia lawmakers have introduced a proposal aimed at limiting the NCAA, conferences, and schools in their investigations of student athletes and their NIL agreements. Legislators in other states are considering income tax breaks for student athletes, particularly noteworthy as Florida has no income tax, putting Florida schools in direct competition with those from states offering such breaks.

In Arkansas, the legislature is progressing a bill to facilitate raffles at sporting events to generate funds for athletics and NIL, despite concerns from some lawmakers about potential constitutional conflicts.

These initiatives extend beyond Florida’s NIL law, which was one of the first of its kind, established in 2020 and thus prompting action from the NCAA.

“Current Florida NIL law is three paragraphs long and does two things,” said Javier Peral II, assistant general counsel with the University of Miami. “It’s a very sparse NIL law when compared to all the other states.”

“Right now, it’s virtually a blank [slate],” Peral added.

However, Florida lawmakers seem disinclined to implement significant changes regarding NIL while the House v. NCAA settlement is still pending.

There is pending legislation that would cap agents’ commissions at 5 percent for student athletes, but its future remains uncertain.

The state House's NIL workgroup refrained from making any recommendations for the moment, delegating potential rule changes to the university system's board of governors.

“This is here; it’s coming — we’re going to be dealing with it. In one way or another, this Legislature probably is going to deal with it,” said state Rep. Alex Rizo, who led the House’s NIL workgroup. “We may take a laissez-faire approach. However, we may not be able to.”

To create more funds for athletics, the board of governors is contemplating a rule that would grant schools greater flexibility in spending auxiliary funds generated through operations such as bookstores, food services, and campus golf courses. University officials have suggested that revenue might also come from sources like cash back from procurement card programs or surplus investment revenues.

“If we don’t figure this out to match other states, even as a Georgia fan, Florida schools are going to find either they can be left behind, or they can be competitive,” remarked state Rep. Danny Nix, who hails from Athens, Georgia — the home of the University of Florida’s archrival, the Georgia Bulldogs.

Max Fischer contributed to this article for TROIB News