One thought crossed Virginia Tech athletic director Whit Babcock’s mind when the House vs. NCAA settlement was formally approved by Judge Claudia Wilken late last Friday — “Finally.”
The long-awaited ruling at last moves college sports into a new phase, out of a three-year run that “has had no structure,” Babcock said to Hokies broadcaster Bill Roth during an in-house podcast released Tuesday evening. For the full transcript of the interview, click here.
“Whatever this next chapter is, I’m convinced it’s better than the chapter we just went through,” Babcock said during the 34-minute conversation aimed at Hokies fans. “... We’re ready for it. We’ve been preparing for it for a long time. It’s a dang sure new era and time to adapt and get going.”
The House settlement will lead to several historic measures that signify a radical departure from the way the NCAA operated in the first 119 years of its existence, including:
• Schools will be able to share a portion of their revenue directly with players, with an estimated rollout of up to $20.5 million available to be paid out per school in the fiscal year starting July 1. Virginia Tech has the full amount available in Year 1, though it is working on making that figure sustainable in the future, with the pot expected to go up by at least 4 percent each year.
• In an effort to return name, image and likeness to its original purpose, any NIL agreements made with third parties like businesses or collectives that exceed $600 will need to be reviewed by a national clearinghouse operated by Deloitte to make sure it is in a fair range of compensation. Deals that don’t pass muster will have to be altered, perhaps curbing runaway pay-for-play agreements.
• A new enforcement model “with some teeth,” Babcock said, will be implemented by former Major League Baseball executive Bryan Seeley, aimed at punishing offenders who try to circumvent the revenue-sharing cap or NIL monitoring system.
• Approximately $2.8 billion in backpay will be given to NCAA athletes who competed from 2016-2021, before NIL compensation was permitted. That money comes from a reduction in conference revenue distributions, estimated to be around $1.5 million per school for 10 years.
• New roster limits will exist for all NCAA teams, though previous scholarship caps will be removed, allowing schools to offer scholarships for every spot on a team’s roster. While Tech will have 45 new scholarships across all sports this season and Babcock said he has no plans to cut any of the school’s 22 sports, the shuffling still means the Hokies will have 60 fewer student-athletes in 2025-26 than it did during this past academic year, with many walk-on slots eliminated.
Because football generates the vast majority of the athletic department’s revenue, football players will receive the lion’s share of revenue sharing, with north of 70 percent of the $20.5 million annual figure expected to go toward Virginia Tech’s signature sport. Another $3 million or so will go to men’s basketball, the other revenue driver in the department, with women’s basketball next in the pecking order.
Those revenue-sharing agreements will closely resemble pro contracts, with colleges using a program called LBI that Major League Baseball uses to track its salaries. They’re all cash deals (apartments, cars or any other gift negotiations have to pass NIL muster), though schools can write in incentives like performance or graduation bonuses. There’s also the possibility of putting buyout language in the contract if an athlete transfers to another school.
“Hopefully that and the transparency with it, along with the new NIL procedures, will slow some of the transfer process down,” Babcock said.
It’s forced athletic departments to take a more professional approach to their structure. Tech has leaned on advice from alums in front office spots in professional sports — Jeff King with the Chicago Bears, Erik Neander of the Tampa Bay Rays and Bruce Arians of the Tampa Bay Buccaneers — for building its structure. Babcock said he went back and re-read the book “Moneyball” to get in the right analytically-driven mindset.
“If everybody has the same amount, where are you going to spend it? What’s the return on investment?” he said.
Though the Hokies have the $20.5 million figure ready to go for the 2025-26 campaign — it’s a combination of athletic department money, some one-time campus money, reserve cash and an increase in student fees — they’re working on a sustainable model of revenue generation.
For that, it’s looking at athletics through more of a pro lens, kicking around the idea of concerts, possibly putting on a Topgolf event in Lane Stadium, exploring the idea of corporate logos and more premium seating or delving into public and private partnerships. Babcock specifically mentioned enhancing the gameday experience around the stadium, possibly with an entertainment district on Chicken Hill or at the Corporate Research Center that’s modeled after Iowa State’s Cytown or what the Packers have around Lambeau Field.
Tech hopes to have a streamlined message from the Hokie Club to better inform donors where to best direct their money. Collectives like Triumph NIL and the Hokie Way still exist, though their mission might change now that schools can directly pay athletes.
“I think it was a little confusing the past few years,” Babcock said. “‘Hey, give this to the Hokie Club, but we need you to do this to Triumph or the Hokie Way.’ Now with the recent House case settlement, we can bring a lot of it in-house. … People will see a renewed emphasis on that, and there’s no better way to help the Hokies than be part of the Hokie Club. We really need it.”
With Virginia state laws preventing student fees from being raised beyond a certain percentage and forbidding state funds from being used in the building of athletic facilities, Babcock urged campus for more support to keep the Hokies competitive.
“Virginia Tech has historically been pretty conservative on this front,” he said. “It’s important to be top tier. The value of athletics to Virginia Tech is immense, and we need that support and feel that it’s justified, and quite frankly, when you can get more resources, whether it’s from campus or the public, it leads to winning.”
While the structure of the new revenue-sharing model is important, enforcement will be paramount — and will be run by an entity outside of the NCAA, which feebly investigated and punished rogue programs and boosters in the past.
Critics of the plan point out that the NIL portion still relies much on the honor system, with athletes having five days to enter their NIL deals into a system that puts it through the Deloitte wringer. Babcock said he’s been told close to 90 percent of past NIL deals would have been rejected in the new system, though feedback will be given for how to make them pass muster as being in a “fair range of compensation.”
Will players and boosters comply, or will this just move illicit payments that circumvent the cap back under the table like the pre-NIL days?
“One thing we all agree on is if there’s not real teeth in the penalties, if there’s not real expediency, if that’s the right word, it’s not going to work,” Babcock said. “The penalties and the structure that we’ve heard do have some teeth, and I guess people could still find a way to cheat if they wanted, cash under the table or not turning in NIL deals, but if you find out about it and you turn people in, I feel a whole lot better about this group than I did the NCAA.”
Babcock hopes the settlement helps propel movement from Congress to aid the NCAA with a bill that, in the absence of collective bargaining, would offer some anti-trust protection, outline a national standard on NIL, acknowledge that the athletes are students and not employees and write in protections for players that would require registration for agents, mental health training and financial management help.
“Congress seems more educated on this subject matter,” Babcock said. “I think we’ve got our act together or, pardon the pun, our house in order, after the settlement where Congress can get involved.”
Overall, Babcock sees the House settlement as a good thing for Virginia Tech athletics, a potential leveling of the playing field after the Wild West spending of the last couple of years that had few, if any, guardrails.
“College sports is such a uniquely American enterprise,” he said. “We just want it based on fairness, right? That’s competition. Here are the rules, here’s the structure, let’s all play by them, and I’m confident it will be a beneficial era for Virginia Tech, and interesting times to say the least, but we’re ready for it.”