Starting next year, Division I colleges that elect to opt into the preliminarily approved House v. NCAA settlement can provide their basketball teams with up to 15 scholarships, two more than the 13 currently allotted.
But just because you can doesn’t mean that you should –– in fact, if college basketball teams want to remain competitive, the entire way they think about athletic scholarships should change.
For many basketball programs, even at the Power 4 level, the additional cost of adding athletic scholarships will likely not justify the return in value on the court from players who occupy deep bench positions.
In conjunction with the increase in scholarship limits, several new professionalization concepts will be introduced to collegiate sports next year, including direct athlete NIL revenue-sharing with a $20.5 million annual cap at each school for athletes across all sports. Football will be commanding the lion’s share of spending at FBS institutions.
Athletic compensation will be removed from the hands of NIL Collectives through a NIL auditing board that seeks to eliminate third-party pay-for-play contracts and instead place athletic compensation under the purview of schools themselves.
It is anticipated that a college basketball team worthy of being a contender will need $4-6 million to compete at the sport’s highest level. Experts, like Atlantic 10 Conference commissioner Bernadette McGlade, say that even with exceptional coaching, scouting, and player development, a bare minimum of a $1-3 million payroll is essential to have a “nationally relevant” roster.
Most Power 4 institutions have the funds to compensate their athletes up to this NIL revenue-sharing cap. However, schools without the vast revenue-generating capabilities that power conference schools enjoy will revenue share with their athletes at varying levels, oftentimes far below the $20.5 threshold.
Beyond the de facto hard salary cap, a roster limit will be introduced, meaning that a maximum of 15 players are allowed on the team. In the 2022-23 season, the average size of a Division I basketball roster was 15.7 players. In the 2025-26 season, a slight reduction in rostered athletes will be heading to college hoops —roughly 255 fewer roster spots, assuming every Division I team opts in to the new settlement.
College basketball will operate more like professional basketball than ever, and teams recognizing these changes will position themselves well in the revenue sharing landscape.
Athletic scholarships are one component of the total compensation package for college athletes, compensation that comes as a line item expense to a collegiate athletics department. However, to preserve competitive equity, budgetary advantages have been neutered at Power 4 institutions that can afford both the full salary cap and scholarship increases.
According to the terms of the House settlement, “The full cost-of-attendance dollar value of any new or incremental athletic scholarships — that were not previously permitted by NCAA Division I rules — up to two million five hundred thousand dollars ($2,500,000.00) (“the Athletic Scholarship Cap”) will count against the [revenue-sharing] Pool.”
For any new scholarship added beyond current scholarship limits at a school like Duke, basketball or otherwise, the roughly $94,533 cost of attendance price tag would be reduced from their NIL revenue-sharing salary cap. When this additional expense directly hurts your ability to provide revenue-sharing payment, schools should put great thought into how they want to spend these funds.
Current walk-on players typically do not receive much, if any, NIL compensation. In Power 4 programs, these athletes often earn $5,000 to $15,000 annually for their contributions in practice and in-game emergency situations due to injury, ejection, or foul trouble. A full scholarship would represent a significant, and likely unwise, windfall for any deep bench player.
In the NBA, it is rare to see even mid-range spending on athletes who fall below eighth in the rotation. This is in a league where more games are played, more injuries occur, and more total game minutes result in regular season rotations that expand to up to 10 players.
In college basketball, it is uncommon to find teams that run beyond an eight-player rotation, especially once teams get into conference play. Spending should reflect on-court value, and especially at private schools, scholarships are significant compensation that should be treated as such.
State schools with lower costs of attendance can be more flexible in scholarship distribution. Since scholarships cost them less, they can allocate more revenue-sharing funds while still attracting talent through academic opportunities. Scholarship strategy will vary by institution depending on cost of attendance factors, with state schools yielding a significant advantage.
Simply affixing the NBA model to college basketball is not suitable. Unlike the NBA, no vast talent pool of free agents can be signed to a team during spurts of injury or suspension. These limitations will force colleges to spend more on depth positions on their bench –– but does that mean spending on a full 15-man roster? Assuredly not.
Does increasing scholarship allotment make sense for Power 4 schools? Perhaps, but only if your cost of attendance is low and you believe that your 14th and 15th man are making significant contributions to your program. This is unlikely, even at the smallest of college education price tags.
Unlike the NBA, college basketball does not have minimum or maximum contracts. Would the fifteenth player on an NBA roster, like the Pacer’s James Johnson, make the 10-year veteran league minimum of $3,303,771 without these restraints? Most likely not.
Without those safeguards, colleges can focus on players who make tangible impacts on the court without spending any money on the bottom of their rotation. Conversely, rookie-scale contracts do not exist, and schools looking for high-level freshmen will have to pay a hefty premium for their talents, unlike NBA teams, which can often secure young impact players at a reduction of their free-market value.
The “Big 3” model that many NBA championship teams utilized before the most recent CBA focused 80-90% of the total salary cap on star players and filling out the majority of the roster with players on rookie contracts or veteran minimum deals.
The current NBA focuses a bit more spending on role players, but rarely are more than eight players on an NBA roster earning mid-level or above deals. The best roster construction strategy at the college level is still being crafted, but one thing that can be gleaned from the habits of professional front-offices is that it likely won’t include spending on deep bench depth.
In college, without artificial constraints reducing the salaries of the most elite players and raising the floor of depth players, it may be most advantageous to have even a broader gap in spending between star players, mid-level players, and depth players than the NBA.
The value proposition of attending a university and participating on a Division I roster is likely enough to attract a bevy of talented athletes even without any payment, increasingly so at programs with solid academics or solid athletic tradition. Any form of compensation, revenue share or scholarship, may be overspending for the value deep-depth positions provide a team.
Development is less of a concern in college basketball than ever before. Through the transfer portal, abundant talent exists every offseason to plug and play into a lineup; spending funds in the form of scholarships or NIL revenue sharing on developing athletes for speculative future returns is unlikely to yield a positive return on investment.
The revenue sharing system may incentivize mid-major and Group of Five schools to reduce scholarships on a basketball roster. In the new system, where payment comes directly from the schools, if a mid-major program chooses to compensate an athlete below the 11th position with a full athletic scholarship, it is likely grossly overpaying for the athlete’s on-court utility even without providing a dime of NIL revenue sharing compensation.
Starting next year, basketball will no longer be a headcount sport, meaning that athletic scholarships will not be mandated to be a full-ride. For many programs, moving deep bench depth to walk-on status or partial scholarships will free up revenue to spend on impact players.
At a Power 4 school that can meet the cap, keeping the current 13 scholarships may provide an advantage in recruiting a deeper roster without impacting their overall payroll as mid-major schools might not have the luxury to maintain current scholarship funding.
With finite athletics budgets that, depending on intra-university finances, are impacted by athletic scholarship spending, smaller institutions may seriously consider reducing their overall scholarship expenditures for depth positions.
If funds from scholarships to the 13th, 12th, or even 11th man are capable of being transformed into rev-share money and outweigh deep bench players’ on-court value, moving these positions to partial or no scholarships in favor of greater spending on the portion of the roster playing meaningful minutes may be the most efficient allocation of funds.
The implications of these changes will have externalities at mid-major schools that negatively impact non-revenue athletes. While the drafters of the House settlement insist that increased scholarship limits will lead to greater opportunities for athletic scholarships, the incentive structure is more likely to reduce scholarships in non-revenue sports at non-Power-4 schools to fund competitive rosters in revenue athletics and result in no change in scholarship distribution at Power 4 institutions.
Very few institutional benefits are found from non-revenue athletics success. If it is possible within a university’s financial structure to divert scholarship funding to non-revenue athletics and move those allocations towards NIL revenue-sharing, it is one way that schools that lack the financial means to compete with more prominent basketball programs can bolster their payment capabilities.
For example, at a school like Pepperdine, whose cost of attendance is north of $90,000, removing only two scholarships from the men’s and women’s golf teams could theoretically yield $360,000 of funding for basketball, a sport whose success would advance its institutional goals.
This assumes that the school’s athletic department currently absorbs the costs of scholarships at a one-to-one dollar ratio to the university and that the team’s scholarships aren’t funded by endowments specifically tethered to scholarships or allocations through a university athletics fund earmarked for golf athletes.
Reducing scholarships is not the only method schools will use to fund the new revenue-sharing system; introducing increased athletic-fees to all students or cutting expensive athletics programs that operate at massive deficits to the athletics department. Most recently, Cleveland State eliminated its men’s wrestling, women’s golf, and softball teams.
While the university did not expressly say these cuts were in response to revenue sharing, the announcement came shortly before the announcement that every member of their conference, the Horizon League, will be opting into the revenue sharing system.
The days of treating scholarships as a fixed cost of college basketball rosters are over. With revenue-sharing dollars now intertwined with scholarship spending, schools must take a more analytical approach to roster construction. Power 4 programs that meet the cap should be careful in increasing scholarship allotments, and mid-majors will need to make tough decisions to remain competitive.
Whether through reducing scholarships, reallocating funds from non-revenue sports, or cutting programs altogether, the financial realities of this new system will force athletic departments to operate more like professional franchises than ever before. Those who fail to embrace these changes risk being outspent, out-recruited, and ultimately, left behind.
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