NCAA Settlement: LSU Athletic Director’s Take

Tiger's AD Scott Woodward reflects on NCAA's landmark decision to allow direct athlete compensation.

May 26, 2024; Hoover, AL, USA; LSU Tigers pitcher Will Hellmers (48) pitches against the Tennessee Volunteers during the championship game between Tennessee and LSU at the SEC Baseball Tournament at Hoover Metropolitan Stadium. Mandatory Credit: Vasha Hunt-USA TODAY Sports / Vasha Hunt-USA TODAY Sports

LSU's athletic director Scott Woodward reflected on the transformative period facing collegiate sports, drawing parallels to the NFL's adaptation to free agency in the 1990s. Despite initial concerns, the NFL thrived after the antitrust lawsuit, which permitted unrestricted free agency starting in 1993. Woodward anticipates a similar outcome for college sports following the NCAA's recent agreement to settle three federal antitrust lawsuits.

Under the settlement, announced last Thursday, the NCAA is committed to paying $2.78 billion in damages over a decade. Division I schools are also authorized to directly pay their athletes up to $20 million annually, beyond existing scholarships and benefits. The details of this arrangement, slated to begin in fall 2025, are still under negotiation, with significant considerations surrounding Title IX, Name, Image, and Likeness (NIL) rights, and athlete employment status.

Woodward expressed mixed feelings about the changes. "Do I like the way it is? Do I prefer the way it was? Of course. But we're going to thrive in the way it is and we're going to make the best of it," he told The Advocate.

"I'm most pleased with it because it's going to put some certainty back in what we do," Woodward said. "Do I like it? Not necessarily. No one likes change. But I see this as a good opportunity for us because our athletic department had great success in this chaotic world that we're in right now with NIL and the (transfer) portal and all that stuff. I think that's a testament to LSU and the brand and how strong it is. I look forward to the future, frankly."

The new revenue-sharing model will fundamentally alter financial management within LSU's athletic department and others nationwide. Universities will now allocate up to 22% of their athletic revenue to player compensation, which, combined with other benefits, could mean nearly half of a department's revenue going to athletes, according to NCAA president Charlie Baker.

This shift comes at a time when LSU boasts substantial financial clout, with a reported $199.3 million in total revenue for the 2022 fiscal year, ranking sixth highest in the nation per a USA Today database. However, reallocating funds to meet the new compensation structures will be a significant challenge. In the fiscal year 2023, player compensation would have been LSU's fourth largest expense.

The NCAA also plans to withhold approximately $2 million annually from distributions to major conference teams to settle past damages related to athletes' inability to profit from NIL from 2016 to 2020. This adjustment is just one of many that LSU and similar institutions must consider.

Looking ahead, Woodward sees potential revenue increases through SEC's lucrative broadcasting agreements, including a new $300 million annual deal with ESPN and expanded revenue from the College Football Playoff, set to commence a new contract with ESPN in 2026.

Despite the uncertainties and financial adjustments required, Woodward remains optimistic about LSU's ability to navigate this new landscape, maintaining competitive programs across their 16 sports teams. "This has been chaotic for a few years now, and we've done very well," Woodward stated. "I think this program has those expectations. I certainly have those expectations."