Davidson Opts into House v. NCAA Settlement, Embraces NIL Revenue Share

Davidson, a "unicorn" in college athletics, sets a precedent by opting into the House v. NCAA settlement and implementing NIL revenue sharing for its basketball programs

Nov 29, 2024; Paradise Island, Bahamas, BHS; Davidson Wildcats forward Reed Bailey (1) dribbles as Gonzaga Bulldogs forward Braden Huff (34) defends during the second half at Imperial Arena at the Atlantis resort. / Kevin Jairaj-Imagn Images

Davidson College is a unique school. With less than 2,000 undergrads enrolled, it is the smallest member of the Atlantic 10 Conference and one of the smallest in the entire Division I landscape. Don’t let size fool you, with 15 tournament appearances and three trips to the Elite Eight in school history, the program is notable amongst mid-major peers of any size.

On paper, Davidson resembles a prestigious Division III liberal arts college. On the court, they aren’t afraid to take on state flagship schools boasting enrolments of over 40,000 students who are known more for their athletic tradition than any academic prowess. In an era where college sports continue to move toward a professional model and competitive balance is tilted to schools with stronger financial backing, Davidson isn’t backing down.

Yesterday, in a university press release written by Vice President & Director of Athletics Chris Clunie, Davidson declared that they will opt in to the House v. NCAA settlement proposal, granted the formal approval of the settlement in April, and begin directly compensating their athletes in men’s and women’s basketball.

Schools that opt in to the preliminarily approved House v. NCAA settlement will, amongst other new features in college athletics, be allowed to enter into NIL revenue sharing agreements with their student-athletes.  Those institutions will have the ability to compensate athletes up to $20,500,000 in the first-year with gradual increases to the cap occurring in subsequent years.

The message from Clunie was clear, “Davidson College is a unicorn. There is no institution in the nation quite like us. Athletics is and has been a differentiator for Davidson College.” Amongst peer schools the athletic success of Davidson is a pull for any high-achieving student who wants to pair a liberal arts education with successful Division I athletics.

Clunie acknowledges that even though the change goes against the grain for intuitions of Davidson’s profile, it is necessary to advance what has made Davidson’s unique competitive advantages: “We understand that this is a cultural shift, but we will step into this space without neglecting our unwavering commitment to academics, leadership, service and integrity.

The A-10 is a basketball-centric league, and basketball has long been our flagship sport. When our basketball programs are successful, it provides much-needed revenue and exposure that supports all our athletics programs and raises the overall visibility of the college.”

While Davidson has now made its choice to implement revenue-sharing public, many other similarly situated schools face a tough decision regarding how to navigate the upcoming landscape of college sports. Finding funding to participate in revenue-sharing is a challenging task that often requires changes in resources allocation across all athletic programs.

A March 1 deadline for opting into the House v. NCAA settlement means many administrators are against the clock in deciding whether or not to engage in revenue sharing with their athletes.

The decision to revenue share is easy for Power 4 schools and most FBS institutions. Schools must provide adequate compensation through future revenue sharing agreements to attract the athletes necessary to compete at the highest level.

Schools in the Big Ten, SEC, ACC, and Big 12 may have to tighten their belts and explore new methods of generating funding, but for them coming up with the cash necessary to rev-share will not be of significant concern. Group of 5 schools will engage in revenue sharing but likely fall well short of the $20,500,000 cap.

For smaller schools, finding the funding to compensate athletes is challenging without sacrificing resources for other sports teams or trimming other athletic services. Davidson addressed the concern of other institutional stakeholders head on, “we will make this commitment to our men's and women's basketball by securing new resources for this purpose.

"We will not cut academic, student life or other athletics programs in order to fund this basketball initiative. This will require support from those who believe strongly in the ways basketball has been and will continue to be an integral part of Davidson College.”

Schools in the A-10 do not field FBS football, for them the $20,500,000 cap is not the benchmark. Most FBS schools will direct over 75% of their NIL compensation to football. For a school in a basketball conference like the A-10 sourcing a payroll of $3,000,000 or more will allow you to compete with the basketball programs names in the nation.

For Davidson, finding these funds is not as simple as other conference members. While the recent A-10 media deal was a sizable jump in revenue for teams within the conference, competing against in-conference schools like Dayton that’s stadium is nearly double the size of Davidson's, and has an alumni base that dwarfs the Wildcats' is a challenge. Davidson appears ready to lean on their biggest donors to drive their success moving forward.   

Throughout the A-10 the ability to generate revenue through ticket sales and donations is a mixed bag. Some programs will opt-in and others will continue to operate without direct athlete compensation, this fracture is not unique to the conference.

This fracture is not unique to the A-10, the WCC, WAC, and other mid-major basketball conferences will likely see a split of teams who revenue shares and teams who don’t. The disparity will not only harm competitive parity but could also likely sew the seeds of departure for many schools unwilling or unable to make the jump to professionalized college sports.

Davidson is an early mid-major mover with their announcement to opt-in to the settlement. In the coming weeks we will likely see who shows up to compete and who may head towards a less competitive conference soon.

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