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How the House Vs. NCAA Settlement Will Impact Penn State Sports

Penn State Athletic Director Patrick Kraft says aspects of the House vs. NCAA settlement could provide a "huge, huge advantage" for the Nittany Lions.

Mark Wogenrich

A general view of a Penn State University sign outside of Beaver Stadium.
A general view of a Penn State University sign outside of Beaver Stadium. / Rich Barnes-USA TODAY Sports
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Before Friday's release of the proposed settlement of three college sports antitrust cases, Penn State signaled its plans for change. Penn State Athletics released a 3-minute video in which Athletic Director Patrick Kraft addressed a broad-strokes plan to share revenue with athletes and capitalize on increased roster sizes. Kraft also issued a fundraising call to help pay for it.

"This is not the time to rest on our laurels," Kraft said in the video. "This is the time to double down on our rich history and proven ability to be successful."

The NCAA and the "Autonomy Five" conferences on Friday released their proposed settlement to three antitrust lawsuits regarding name, image and likeness claims. Through the settlement, the NCAA and the conferences will pay nearly $2.8 billion to former college athletes and establish an annual payment structure for future athletes. The proposed settlement says schools can provide "up to 22% of the average Autonomy 5 athletic media, ticket, and sponsorship revenue to student-athletes" beginning in 2025. Officials estimate this annual payment at about $22 million, which is additional to scholarships, room-and-board, cost-of-living grants and other athletic benefits.

The settlement, which requires court approval, is far from the last stop into college athletics' new world. As the NCAA noted, it does not address athletes' employment status, collective bargaining or different state NIL laws. It also creates new legal issues, such as a clearninghouse to approve third-party NIL deals above $600.

Broadly speaking, however, Penn State Athletics could benefit from some provisions of the settlement, including direct access to revenue sharing and increased roster limits. Here's a look at how Penn State could deploy its considerable financial resources in the new college athletics model.

I think Penn State will be one of the programs that benefits the most in all of college football from revenue sharing.

- Landon Tengwall, former football player

'Revenue sharing is coming'

In a May interview, before the settlements truly had form, Penn State football coach James Franklin already looked to bringing the program's NIL infrastructure in-house. Revenue sharing offers Franklin and other coaches more control over how their athletes are paid, something they want desperately.

"Yeah, I would like that to happen yesterday," Franklin said. "Because I think at the end of the day, it's hard, right? It's challenging when I'm ultimately responsible for it, but it's outside of my control. Those things I think are frustrating for college coaches in general right now. And that's why I think you see a lot of coaches going to the NFL or leaving head coaching positions to be assistants, because No. 1, that's not what they signed up for. And No. 2, it's outside of your control. You’d better have someone really strong who's running the collective and gets it."

Franklin and Kraft both said that Penn State has the financial capacity to distribute the estimated $22 million to athletes. At Big Ten Football Media Days, Kraft said that "revenue sharing is coming" and declared that Penn State will "be all-in. We'll do it to whatever max we can." Penn State can position itself this way as one of five athletic departments to spend $200+ million in fiscal year 2022-23, according to Sportico. That year, Penn State Athletics also generated more than $200 million in revenue for the first time.

That's a huge benefit for Penn State and will help alleviate some pressure on Happy Valley United, Penn State's official NIL collective to be responsible for the majority of athlete payments.

“I think for us to really function on all cylinders, a portion of that money that is directed to NIL should come from in-house,” Jen Ferrang, Happy Valley United’s general manager for development and corporate partnerships, said in a recent interview. “I think that will be really good for a place like Penn State in particular.”

Landon Tengwall, a former Penn State football player who has transitioned to creating college football content, compared the prospect of revenue sharing to the expanded College Football Playoff. Had the playoff been in place in 2016, Penn State would have qualified in six of the last eight seasons. Tengwall said revenue sharing could have a similarly positive impact on Penn State football.

“I think Penn State will be one of the programs that benefits the most in all of college football from revenue sharing,” he said. “You don't have to rely on your fan base or on a town that is filled with small family businesses. That would resolve a lot of the issues of having to depend on a fan base to fund this.”

Capitalizing on more scholarships

The antitrust settlements will change the essential nature of college rosters. Scholarships no longer are limited. Instead, rosters will be capped, and schools can offer scholarships to that cap. According to Yahoo Sports, the settlement could add about 790 scholarship opportunities for athletes across all varsity sports.

Football rosters, once limited to 85 scholarship players, will have 105 scholarship players, according to the proposed settlement. Sports like field hockey (15 more scholarships), track (combined 61.4 more for men and women's teams), lacrosse (combined 61.4 more) and soccer (combined 32.1 more) will see large increases. Baseball will increase by 22.3 scholarships, and softball will increase by 13.

Schools do not have to award scholarships to the maximum, and many will not be able to do so even if they wanted. But Kraft said that these increases would be a "huge, huge advantage for us" and unofficially began a fundraising campaign. During the 2022-23 fiscal year, Penn State awarded about $23.4 million in athletics aid.

"One other thing that I’m excited about [with the proposed settlement]? Scholarship limits go away," Kraft said at Big Ten Football Media Days. "... Now, the power of Penn State [has] the ability to go out and raise the money to go put more of our athletes on scholarship. That is a huge, huge advantage for us. That's perfect for us."

A key Penn State sport to watch is wrestling. The Nittany Lions have won 11 NCAA team titles since 2009, when Cael Sanderson became head coach, and could become even more dominant. Wrestling scholarships will increase from 9.9 to 30, even though a starting lineup consists of just 10 wrestlers. Penn State listed 37 wrestlers on its 2023-24 roster, though the group shared 9.9 scholarships.

"I think that change alone becomes really, really important, because for a lot of our athletes from the beginning, NIL was doing that, ... helping them pay for school," Kraft said. "Now we're able to raise money, and it is actually scholarship dollars, which is huge. So I think that is a major advantage for us."

The new NIL

Even with revenue sharing, expansion of scholarships and the proposed regulation of collectives, NIL won't go away. It likely will morph into an additional compensation benefit (some have called it a "sweetener") rather than the primary option. As Kraft said, Penn State wants to move NIL into a marketing direction and help athletes broker NIL deals.

"NIL becomes much better from my perspective because we can help far more now," Kraft said at Big Ten Football Media Days.

Penn State already has made several moves in this direction. In 2023, the university created the Penn State Brand Academy, an initiative to assist athletes in monetizing their names, images and likenesses. Penn State named former football player Omar Easy as the Brand Academy's director and is funding it with a $5 million endowment, $2.5 million of which came via an anonymous donation honoring Penn State legend Wally Triplett.

Penn State recently announced an NIL initiative with Playfly, its multimedia rights partner. Kraft also said that the athletic department is establishing an internal marketing agency and is working with Hall of Fame linebacker LaVar Arrington on a yet-to-be-announced NIL project.

“That’s how we approach this; building that personal brand, because that's something you can take with you,” Easy said in a recent interview. “You can’t take that Penn State brand with you. Yeah, you'll be a part of it. But it's not yours. Your brand is your brand. That’s the message.”

In the Penn State Athletics video, Kraft sought to send a calming message about Penn State's place in college athletics once the antitrust cases are settled.

"While many find themselves worried and confused about the recent outcomes of the House vs. NCAA settlement, I find promise in knowing we will continue to provide a world-class education to our more than 850 student-athletes," Kraft said. "I find joy in knowing we will continue to win championships, and I find great strength in witnessing a Penn State community that is resilient, passionate and has a history of adapting at an elite level."

Kraft concluded the video with a classic fundraising call to action. "Now more than ever, we must rally together to ensure our legacy endures, our student-athletes thrive and the spirit of 'Success With Honor' lives on," he said.

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Penn State on SI is the place for Penn State news, opinion and perspective on the SI.com network. Publisher Mark Wogenrich has covered Penn State for more than 20 years, tracking three coaching staffs, three Big Ten titles and a catalog of great stories. Follow him on X (or Twitter) @MarkWogenrich.

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Mark Wogenrich

MARK WOGENRICH

Mark Wogenrich is Editor and Publisher of AllPennState, the site for Penn State news on SI's FanNation Network. He has covered Penn State sports for more than two decades across three coaching staffs and three Rose Bowls.

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