The X’s and O’s of Revenue Sharing

AS TERPS PREPARE to take the field next season, a new era of college athletics could also kick off—one that would require a whole new game plan at the University of Maryland and beyond.

A groundbreaking settlement in a class-action lawsuit claiming the NCAA prevented student-athletes from earning their market value would, if approved later this spring, permit schools that compete at the top tier of college athletics to pay them directly. As of press time, the judge had signaled her readiness to approve the settlement if the parties addressed a roster limit issue. That would mean starting July 1, each Division I institution could distribute up to 22% of its annual revenue, capped at an estimated $20.5 million for 2025-26, among its athletes.

That seismic shift would add a new layer to student-athlete compensation’s links to recruiting and on-field success, which began in 2021 with the creation of name, image and likeness (NIL) policies that allowed companies and booster collectives to legally pay players.

Colleen Sorem, interim Barry P. Gossett Director of Athletics, faces plenty of other challenges too: Conference realignment continues to roil everything from media rights to College Football Playoff spots, and COVID-era transfer and new eligibility rules make every player a yearly free agent. But revenue sharing, she says, would be a true game-changer.

Sorem took Terp into the huddle to help answer some frequently asked questions.

How would the money be split up?
Maryland is planning to pay the full $20.5 million allowed, Sorem says, with the lion’s share likely going to student-athletes in revenue-producing sports: football and men’s and women’s basketball. To determine how to allocate the money, Maryland Athletics would use data analytics and track what similar athletes make elsewhere.

Where would it come from?
Maryland Athletics is still figuring that out. “It’s not just, ‘Poof, someone gave us $20.5 million to spend,’” Sorem says. Despite the lucrative Big Ten media rights deal, the responsibility for revenue growth rests with the department. “We need to grow our fundraising, we need to grow our revenue and tickets, and we need to identify new sources.”

Why pay the maximum if it would be optional?
Because other top programs would do the same, Sorem says. “We know that in order to compete at the highest level and to give our student-athletes the best chance to be successful, that’s what we need to do. That’s what happens in our business. That’s what’s going on within the Power 4 (football conferences of the Big Ten, SEC, ACC and Big 12).”

But wait, what about NIL?
While the settlement would allow schools to share revenue directly with athletes for the first time, NIL payments from third-party businesses would remain. “But it has to be for true NIL,” Sorem says, and not simply “pay for play.” Rather than simply funneling more money to top players, student-athletes would need to provide an actual service, like signing autographs. And a clearinghouse would vet any deal over $600 to determine a fair market value.

How would student-athletes handle this potentially substantial income—something they might not see again if they’re not drafted?
Maryland Athletics, with the help of partners like SECU, will continue providing financial literacy training, Sorem says, helping student-athletes understand how to save and invest money and pay their taxes. This will continue to be a significant priority for the athletic department.

What about former Terps who missed out on these payments?
Besides allowing payments to current student-athletes, the settlement also calls for approximately $2.8 billion in back pay to all Division I athletes who played from 2016 on, to be distributed over a 10-year period. As a member of a Power 4 conference, UMD would lose $1.5 million per year over that decade, Sorem says.

This sounds like a lot. Who’s managing all this?
In January, Maryland Athletics named former Terp wide receiver and Canadian Football League (CFL) Hall of Famer Geroy Simon its executive director of revenue share management and general manager. In this new role, the former CFL front offi ce executive has been meeting with coaches, working with a data analytics team and reviewing film to help with contract negotiation and salary cap management. “He’s done all these things that are starting to come to bear within our world of intercollegiate athletics,” Sorem says. Cody Gambler, a member of Athletics’ staff for more than a decade, would take on additional responsibilities to manage UMD’s Olympic sport revenue-share program.

Are the days of “student-athletes” as we knew them gone?
“In my eyes, no,” Sorem says. “I believe that we still have to keep education at the forefront of what we do—the majority of our student-athletes are still coming to campus to receive an education. However, I do understand that some people may view us differently, especially when looking at men’s and women’s basketball and football student-athletes. I understand trying to process this and seeing 18- to 22-year-olds getting these types of fi nancial resources can be difficult for some. But there’s this little saying I go by: ‘The key to success is to focus all your energy not on fighting the old, but on building the new.’”

ELEGANT DINING, handcrafted cocktails and Terps basketball fandom team up to create an upscale experience at the new Maryland Club. Overlooking Gary Williams Court at the Xfinity Center, the private social club features a high-end bar, dining room, lounges, and private rooms and workspaces, offering an air of sophistication on gamedays and a year-round campus venue for workshops, private events, live music and other performances. For details, visit themarylandclub.com.