Universities Brace for Title IX Lawsuits by Student-Athletes in the Era of Revenue Sharing

Universities Brace for Title IX Lawsuits by Student-Athletes in the Era of Revenue Sharing

Colleges and universities are bracing themselves for a fresh wave of legal battles, this time centered around gender equity and Title IX, following the revenue-sharing era's official kickoff. Title IX defense lawyers have warned that institutions could face an onslaught of lawsuits from athletes, particularly challenges over the distribution of revenue.

Preparations for this next legal battlefield include setting aside hefty budgets for lengthy and costly litigation, potential settlements with classes of athletes, and commissioning audits to identify other areas of Title IX vulnerability. The exact toll this new chapter will take remains uncertain, given the uncharted legal landscape. However, lawyers predict that some institutions are setting litigation reserves equivalent to the maximum revenue-sharing pools mandated by the House v. NCAA settlement.

Todd Shumaker, sports law and higher education partner at Church Church Hittle and Antrim, revealed that the FBS schools he advises have earmarked funds ranging from a few million to $20 million for these legal battles, discussions for which began around six months ago.

Unlike previous cases such as House, Carter, and Hubbard, consolidated into the settlement and targeting the NCAA and athletic conferences, a Title IX lawsuit must name the school itself as the defendant because it is the direct recipient of federal funds. This leaves schools exposed to a new avenue of liability, without legal protection in this area.

From a damage control perspective, the most prudent approach for a college would be to distribute revenue-sharing funds proportional to the demographic composition of the school's student body. However, many institutions will grapple with competing pressures, especially if rival schools use revenue-sharing to lure recruits with lucrative offers in traditionally profitable sports like football and men's basketball.

Plaintiffs in the revenue-sharing era will have the ability to litigate not only direct payments but also challenge other aspects of new systems. According to LaKeisha Marsh, higher education and college sports practice chair at Akerman LLP, who has been retained by multiple schools to conduct Title IX risk assessments, plaintiffs will likely target any ongoing (Title IX) issues or disparities they can find.

The current state of the Department of Education's Office of Civil Rights (OCR), which enforces federal civil rights laws in schools, may play a role in stoking legal action. In February, the Trump administration rescinded an OCR fact sheet issued during the waning days of Joe Biden's presidency, asserting that payments to athletes, including NIL deals and revenue-sharing stipends, should be subject to the same gender equity requirements as athletic scholarships. With the Trump administration's reversal of this guidance and its disinterest in enforcing gender-equity protections unrelated to transgender participation in female sports, athletes and their advocates are increasingly likely to turn to their private right of action to address perceived Title IX violations.

It is unlikely that sophisticated plaintiffs would look to OCR to resolve disputes, which could result in significant costs for schools. One university, Oregon, is already facing an existing Title IX class action lawsuit that includes claims of inequitable treatment related to NIL opportunities and resources. In the words of Title IX plaintiff attorney Arthur Bryant, suing UO on behalf of former female athletes, "This is a period of golden opportunities for Title IX enforcement in America."

However, attorneys interviewed by Sportico expect a more selective approach to litigation, rather than a widespread rush of sex discrimination lawsuits, at least initially. Later this month, Darren Gibson, a higher education attorney at Michael Best & Friedrich, is set to present on college sports-related liability at the annual conference of National Association of College and University Attorneys, where Title IX defense is sure to be on attendees' minds.

The relationship between Title IX and colleges engaging in revenue-sharing and direct NIL payments is uncharted legal territory. While there is no case precedent directly on point, the first case will be one of first impression. Strategically, it may be advantageous for schools to litigate these cases rather than settle them quickly, considering the unique and constantly changing pool of college athlete plaintiffs. Many schools carry liability insurance, through providers like United Educators (UE), which would likely play some role in defraying the costs of attorneys' fees and damages related to athlete sex discrimination suits. However, an influx of such cases could impact both the cost of premiums and the scope of coverage.

Ultimately, the only guaranteed beneficiaries in these legal battles are the lawyers—assuming they can keep up with the caseload. This emerging landscape underscores the importance of colleges and universities taking a proactive approach to ensure Title IX compliance and avoiding the risk of costly and lengthy litigation.

1. In the light of the uncharted legal landscape surrounding Title IX and revenue-sharing in college sports, universities might need to allocate funds forations, such as legal fees, potential settlements, and audits, to identify and address any Title IX vulnerabilities.
2. Given the increasing likelihood of athletes and their advocates using their private right of action to address perceived Title IX violations, institutions in the education-and-self-development sector may find it beneficial to analyze their financial distribution, particularly in areas like sports, to ensure compliance with gender equity requirements.

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