Navigating the New Landscape: Louisiana College Athlete Compensation Laws
The world of college athletics is undergoing a seismic shift, particularly concerning how student-athletes are compensated. For decades, the NCAA maintained a strict stance on amateurism, preventing athletes from profiting off their name, image, and likeness (NIL). However, recent legal challenges and evolving public opinion have forced a reevaluation of these long-standing rules. Louisiana, like many other states, is grappling with these changes, seeking to create a fair and competitive environment for its colleges and athletes.
The Dawn of Direct Payments: A Historic Shift
The era of direct payments to college athletes has officially begun. Following federal court approval of the House v. NCAA settlement, schools across the nation can now distribute up to $20.5 million annually to their student-athletes. This landmark settlement resolves three separate federal antitrust lawsuits that claimed the NCAA illegally limited the earning power of college athletes. The Supreme Court's 2021 decision in NCAA v. Alston set the stage for this transformation by rejecting the NCAA's "amateurism" argument. Justice Brett Kavanaugh noted the "highly profitable" and "professional" nature of certain college sports.
The settlement establishes a $2.78 billion payment in back pay to former college athletes. It also creates a 10-year revenue-sharing plan where schools can share up to 22% of revenue from media rights, ticket sales, and sponsorships with athletes. The College Sports Commission, led by CEO Bryan Seeley, now oversees regulation and enforcement of player compensation issues.
Louisiana's Response: Leveling the Playing Field
Louisiana is actively adapting to this new reality. Louisiana Governor Jeff Landry signed an executive order allowing schools in Louisiana to directly pay student-athletes for the use of their name, image, and likeness. This order aims to protect Louisiana colleges from "adverse action" by the NCAA, athletic conferences, or other governing bodies if they facilitate or offer NIL compensation. It prohibits the use of state-allocated funds for these payments. The order will remain in effect until either sufficient federal legislation is enacted on NIL or the final approval of the House settlement.
“As national policies and developments continue to reshape the landscape of college sports, this executive order is about fairness-for our Louisiana students, our schools, and our athletes,” Landry said. The aim of the order is to retain an in-state competitive advantage, or rather, not fall at a disadvantage, in attracting student athletes.
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LSU Tigers athletic director Scott Woodward expressed his gratitude for the executive order and the importance of what it allows. “We’re grateful to Governor Landry for his leadership and proactive approach with this executive order,” Woodward said.
The "Cajuns Edge Fund": A Local Initiative
Louisiana Athletics launched the "Cajuns Edge Fund" under the Ragin' Cajuns Athletic Foundation (RCAF). This allows fans, donors, and local businesses to contribute directly to revenue-sharing while receiving tax-deductible benefits and RCAF Priority Points. This represents a historic shift from the previous system, where payments required separate fundraising through volunteer-operated collectives.
Deputy Athletic Director Trey Frazier confirmed the university's participation in the revenue-sharing model, stating, "We're excited about this case. We're going to opt into the revenue-sharing model." The program allows local businesses new opportunities for authentic NIL partnerships with Ragin' Cajuns athletes, streamlining the donor process while expanding scholarship opportunities.
Under the settlement, FBS programs can offer up to 105 scholarships, up from 85. Schools participating in revenue sharing can distribute funds directly to athletes in addition to existing scholarships and third-party NIL earnings. Baseball programs receive 34 scholarships, and softball gets 25 under the new structure.
NIL Task Force: Addressing Key Issues
Recognizing the complexities of NIL compensation, a new NIL task force was formed by Rep. Rashid Young, D-Homer. The study committee was created in House Resolution 15. Young, a former Grambling State football player, will chair the task force. The task force will bring together lawmakers, college athletics officials, student-athletes, and private business to discuss related issues and make recommendations to the legislature.
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Young said he hoped to get more transparency on athletes’ NIL compensation. The task force is expected to meet monthly until it submits its report to the legislature in January.
Taxation of NIL Income: A Point of Contention
The task force comes after two bills to exempt college athlete’s NIL income from state taxes stalled in the state legislature earlier this year. Young’s House Bill 168 would have exempted the first $12,500 of student-athletes’ NIL income from state taxes, aligning the exemption with the standardized deduction offered to every other Louisiana resident. House Bill 166 by Rep. Dixon McMakin, R-Baton Rouge, would have exempted the entirety of an athlete’s NIL income from state taxes.
Young said, “It didn’t seem like there was an appetite for creating a new deduction.”
Fiscal analyses for the two bills note that Louisiana’s four higher education systems have 427 athletes with NIL deals worth a combined $17 million for the 2024-25 school year.
Challenges and Opportunities
While the advent of NIL compensation presents numerous opportunities for student-athletes, it also poses significant challenges.
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Financial Disparities
The financial gap between major programs and schools like Louisiana is substantial. While Power Five conferences brought in $3.55 billion in revenue for 2023, most athletic departments have limited outside revenue and must rely on school funds and student fees to support their programs. Non-Power conference schools have much smaller revenues, and their athlete revenue-sharing pool will likely be a fraction of what big schools can and will pay.
At the highest levels, top quarterbacks earn over $2 million annually, with several Power 4 schools paying $1.5 million for transfer quarterbacks this offseason. Position-specific markets have emerged, with offensive tackles commanding $800,000 to $900,000 and potentially reaching $1.2 million or more for left tackles, while interior offensive linemen range from $600,000 to $700,000 for competitive recruitments.
Employment Status and Title IX
The new system faces significant implementation challenges. College athletes may be considered "employees" of the university, raising issues of unionization and collective bargaining. This creates the need for renewable annual contracts governing relationships between each athlete and their school.
Employment status classification could impact Title IX compliance, potentially allowing colleges to justify paying athletes in revenue-generating sports more than those in non-revenue sports. With approximately 190,000 athletes competing at the Division 1 level, creating contracts for even a quarter of eligible athletes represents an incredibly labor-intensive challenge.
Impact on Non-Revenue Sports
The settlement's financial impact threatens non-revenue-generating sports. Many programs face cuts as colleges offset increased costs for major sports. Olympic-level sports like gymnastics, swimming, wrestling, and track and field could become casualties of the push for equity in high-revenue sports.
Regulatory Hurdles
Jacobs, LSU’s associate athletic director of NIL & strategic initiatives, said the new reporting system has not been easy and has delayed approval of some deals. Requests filed in the days after LSU won the College World Series on June 22 still have not been approved by the commission, she said. Whether colleges can find a way to legally compensate international athletes without jeopardizing their visa status is another issue facing colleges in Louisiana and elsewhere.
All NIL deals of $600 or more must now be reported through the new NIL Go platform, with Deloitte managing the clearinghouse. Reportedly, Deloitte determined that 70% of past payments from NIL collectives would have been denied, while over 90% of payments from public companies would have been approved.
The College Football Playoff Factor
Revenue distribution could see dramatic changes with proposed playoff expansion. Big Ten leadership is discussing 24- and 28-team playoff models, with seven automatic qualifiers for the Big Ten and SEC, five each for the ACC and Big 12, two for Group of Six conferences, and two at-large spots.
Current playoff participants receive $4 million for making the 12-team field, another $4 million for reaching quarterfinals, $6 million for semifinals, and $6 million for the championship game, plus $3 million in expense coverage for each round. Colorado's Deion Sanders proposed paying players additional bonuses for reaching the playoffs, with support from former Alabama coach Nick Saban.
Looking Ahead: The Evolving Landscape
The college sports landscape will continue evolving rapidly. Athletic directors face potentially career-defining decisions about finding money and allocating it. The value of teams now includes literal dollar signs and potential cutting of Olympic sports to fund revenue-generating programs.
The peace NCAA and conference leaders hope to purchase with billions in settlement money appears tentative. Separate cases like Fontenot v. NCAA continue to challenge restrictions on athlete compensation. Enforcement remains a significant question, as separating legitimate endorsement deals from thinly veiled pay-for-performance arrangements continues to be subjective.
Revenue sharing caps could increase to around $30 million annually per school over the next ten years. This would fundamentally alter the competitive balance between programs with substantial revenues and those relying on institutional support.
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