Harvard Athletics Faces Revenue Hit as NCAA Settles $2.8 Billion Lawsuit

Strategic Insights -

As the National College Athletic Association (NCAA) begins to pay out a nearly $2.8 billion settlement to former college athletes who were unable to participate in lucrative brand deals, Harvard Athletics will receive a significant hit to its revenue. According to an NCAA spokesperson, Harvard and other schools outside the Power Five conferences will lose up to 1 to 2 percent of their revenue over the next 10 years, amounting to approximately half a million dollars for Harvard. This comes as a result of the NCAA's settlement with Arizona State University swimmer Grant House and Texas Christian University basketball player Sedona Prince, who sued the association for prohibiting athletes from profiting off of the use of their name, image, and likeness in brand deals.

Key Takeaways:

  • Harvard Athletics will lose up to 1 to 2 percent of its revenue over the next 10 years, approximately half a million dollars, due to the NCAA's settlement.
  • The NCAA pays Harvard Athletics roughly $900,000 per year, making up a small fraction of the more than $43 million in annual revenue.
  • Harvard chose not to establish a Name, Image, and Likeness (NIL) collective, unlike the majority of schools, leading to concerns from alumni about the university's ability to attract and retain talent.
  • The expansion of NIL across the country may raise further challenges for Harvard teams' competitiveness outside of the Ivy League.
  • Over the past two years, Harvard has lost several athletes to other schools that offer more lucrative NIL opportunities.
  • A sports lawyer predicts that the Ivy League may see an exodus of athletes to schools that offer direct payment, potentially affecting Harvard's recruitment.

Statistics:

  • The NCAA's settlement is worth nearly $2.8 billion.
  • Harvard Athletics will lose up to 1 to 2 percent of its revenue over the next 10 years, approximately $450,000 to $900,000 annually.
  • The NCAA pays Harvard Athletics roughly $900,000 per year.
  • Harvard receives over $43 million in annual revenue.
  • More than 70% of NIL revenue is estimated to go to a small subset of sports, including football.

Sources:

  • Harvard Athletics spokesperson Imry Halevi, statement
  • NCAA spokesperson
  • Arizona State University swimmer Grant House and Texas Christian University basketball player Sedona Prince, class-action lawsuit against the NCAA
  • Richard Kent, sports lawyer and sports law professor
  • Staff writer Elyse C. Goncalves
  • Staff writer Akshaya Ravi
  • Harvard Crimson, article on July 25