Here’s how the University of Minnesota will pay its athletes

The Gophers athletic department will distribute $20.5 million to athletes this school year, with the first payments set to hit bank accounts in July.

The recently approved House v. NCAA settlement cleared schools to pay athletes directly for the first time in history. Gophers athletic director Mark Coyle has committed to spending the full $20.5 million allotment, joining every other Big Ten institution.

Here is how that looks for Gophers athletics:

It’s a settlement involving three antitrust cases — House v. NCAA, Hubbard v. NCAA and Carter v. NCAA — in which student-athletes sued the NCAA over either NIL compensation or amateur rules. The namesake figures in each are former Arizona State swimmer Grant House, former Oklahoma State running back Chuba Hubbard and former Duke defensive tackle DeWayne Carter.

Defendants — the NCAA and the five largest conferences (Big Ten, SEC, ACC, Big 12 and Pac-12) — and plaintiffs signed off on the settlement’s terms in 2024.

Division I schools can share up to $20.5 million of revenue per school annually with current athletes, with that amount increasing 4% each year under a 10-year deal. This will mark the first time that NCAA schools will use a formal revenue-sharing plan with athletes. Under the settlement, athletes still will not be considered employees.

Each school that opts into revenue sharing, as Minnesota and all 18 Big Ten members have for the maximum $20.5 million, will determine how it wants to divvy up the funds among its programs. These new payments will be in addition to scholarships and all other benefits athletes already receive from their universities.

The $20.5 million will have to come from the athletic department of every University participating. Coyle committed to pay the full amount of that $20.5 million cap, meaning revenue sharing will account for 12% of expenses this year. He said his department will work with the university to manage the deficit.

The department projects revenues at $165.47 million this year and expenses at $174.22 million. Fifty-one percent of the department’s revenue comes from Big Ten/NCAA payouts primarily through TV media rights, College Football Playoff and men’s basketball tournament.

Money from TV contracts will play the primary role in paying athletes. For example, the Big Ten distributed about $63 million to 12 of its longest-standing member schools, which includes the Gophers, for fiscal year 2024, according to a report by the Athletic. That was up from roughly $60.5 million in fiscal year 2023.

In addition, schools will seek other revenue-generating sources, such as naming rights. On April 3, Minnesota announced it was partnering with a firm to explore selling the naming rights to Williams Arena. The move has the potential of raising $1 million annually, according to Navigate, a consulting firm in sports and entertainment.

Coyle has identified five programs that will receive direct compensation: football, men’s and women’s basketball, volleyball and men’s hockey.

Additionally, Coyle is adding 11 new scholarships — six for women’s programs and five for football. According to House settlement rules, up to $2.5 million of the $20.5 million cap can be earmarked for new scholarships.

The new scholarships for Gophers women’s sports will go to volleyball (two), hockey (one), gymnastics (one), softball (one) and soccer (one).

Coyle declined to reveal that answer in a recent interview with the Star Tribune, citing competitive reasons.

Revenue-sharing models with other Big Ten and SEC schools show football taking priority, with 75% or more of the $20.5 million going to football players, a likely percentage for the Gophers. The Star Tribune reported that between revenue sharing and NIL money, Gophers officials envision $5 million to $6 million going to the men’s basketball roster — which could mean a 15% allocation of revenue sharing (or $3.075 million) to that sport.

Of the remaining 10% — $2.5 million — 5% is expected to go to women’s basketball, while men’s hockey and volleyball would split the final 5%.

Coyle acknowledged that football, the two basketball teams and volleyball will get the “lion’s share” of the pie.

The Gophers are including men’s hockey in the group because that is a revenue-generating sport.

Absolutely. All Gophers athletes are eligible to sign name, image and likeness (NIL) deals. Dinkytown Athletes remains the official collective of the athletic department.

The hope within the industry is that NIL deals will become true endorsement opportunities and remove some of the pay-for-play chaos that erupted before the House settlement.

The new College Sports Commission will oversee revenue-sharing and NIL to make sure schools are compliant. Coyle said the university has an office that will handle the Gophers’ revenue-sharing deals and report to the CSC.

Also, any third-party NIL deal valued at $600 or more now must be reviewed by business consultant Deloitte via a portal called NIL Go to ensure the deal falls within a “reasonable range of compensation.”

In other words, paying a quarterback $100,000 to visit an elementary school one time is not going to pass muster.

Coaches hope it will lead to more parity and slow the rate of transfers. All schools participating in revenue-sharing operate under the same cap: $20.5 million. Coyle has committed to spending the full $20.5 in revenue-sharing.

The Gophers are free to spend as much of that cap on football as, say, Ohio State, Notre Dame or Alabama. They could spend more if they desire, or possibly spend more on men’s basketball or volleyball than other schools. Each school gets to decide how to allocate the money.

Athletic departments backed by massive collectives still will hold an edge in NIL compensation, but the cap on revenue-sharing should make things more equitable.