From left to right, Jeremiah Donati, Graham Neff and Chance Miller, the athletics directors for the University of South Carolina, Clemson University and Coastal Carolina University, take questions from state Senators Wednesday, Feb. 25, 2025, on public funding the school's athletics departments receive from the universities to support college sports programs. The questions come amid debate around public records requirements for direct payments from schools to athletes in so-called Name, Image and Likeness deals. (Photo by Travis Bell/STATEHOUSE CAROLINA/Special to the SC Daily Gazette)
COLUMBIA — The athletics directors for South Carolina’s major public universities pleaded their case Wednesday to keep direct payments to athletes a secret after senators put the matter in the penalty box.
The fast-moving legislation, which would allow public colleges to conceal the so-called name, image and likeness payments they make directly to athletes, appeared on its way to the governor’s desk last week until a news report prompted the Senate to stop short of passage and call colleges to the carpet.
The Post and Courier cited an annual financial report showing Clemson University transferred $20 million in college funds to its athletics department to help cover a portion of operational costs last year. In pushing the bill, colleges had pledged no taxpayer dollars would be spent on payments to student athletes. The financial report left senators questioning those promises.
A day after the Senate voted 30-13 to approve the bill, a pair of Republican senators, Ross Turner of Greenville and Greg Hembree of Little River, formally objected to the bill — preventing the final vote that would’ve sent it to Gov. Henry McMaster.
Unlike in the House, where the bill bypassed the entire committee process and sailed to passage by a 111-2 vote on the third day of the legislative session, Senate rules allow a single senator to object to a bill and block debate. Unless those senators lift their objections, the bill could remain stalled indefinitely.
The matter threw the state’s public colleges into a crisis of trust with legislators, who are in the process of deciding their state aid next fiscal year.
“I don’t like to be lied to,” Senate Majority Leader Shane Massey, R-Edgefield, said when he rose last Wednesday to inform others of what he had read.
Hembree, who chairs the Senate Education Committee, called in the athletics directors to explain themselves in response to those concerns.
The committee let the directors make their case but took no action. Movement on the bill will depend on senators removing their objection.
At the heart of the matter is the settlement of a long-running lawsuit between players and universities, approved by a federal judge last June, which paved the way for colleges to directly pay athletes a portion of profits earned from media, ticket sales, and sponsorship agreements. It allowed each college to share up $20.5 million in annual revenue with its students, a cap that will rise by 4% annually under the settlement agreement.
A Mount Pleasant businessman sought information from the University of South Carolina on the payments it had started to make to Gamecock football players. When the school denied his public records request, Frank Heindel sued. When a judge did not immediately side with the school, USC instead turned to the Legislature in hopes of keeping the records sealed.
Colleges argue being forced to disclose this information, either on an individual athlete basis or on a team-by-team basis, puts South Carolina at a competitive disadvantage. Under the legislation, colleges will have to disclose only their total payout to all athletes schoolwide.
“You’re coming to the Legislature and asking for a carve out of something that is near and dear to most citizens, and that’s the fact that public information is public information,” said Sen. Everett Stubbs, R-Rock Hill.
Five other states — Louisiana, Kentucky, Utah, Arkansas and Colorado — have passed similar legislation into law.
Bills also are pending in New Mexico and Wisconsin. And when news outlets filed public records requests with the University of Alabama, University of Florida, Florida State University and University of California of Los Angeles, all denied the requests for a multitude of reasons, some citing student financial privacy laws and others saying the records were not considered public.
However, Alabama’s athletic director has spoken more publicly about how the school divvies up its payments between sports.
Direct payments from universities are not the only changes NIL has brought to the college sports landscape.
Athletics fundraising has drastically changed as boosters become more prone to donate to NIL-related organizations and player recruitment rather than sending money to the college athletics departments themselves. Athletics departments are now turning to their colleges with larger financial asks to plug the fundraising gap.
Clemson’s latest financial report from the fiscal year that ended last June, before the direct payments from colleges were allowed, showed $10.6 million from the university to cover operating costs of two new women’s varsity sports — lacrosse and gymnastics — as well as the reinstatement of the men’s track and field program.
An additional $2.4 million went to athlete wellness services, including mental health, sports medicine, nutrition, strength and conditioning.
The remaining $7 million didn’t involve an actual cash transaction. Instead, it represented a discount on the tuition the athletics department pays to the school on behalf of out-of-state student athletes.
The year prior, Clemson kicked in about $13 million to the athletics budget, according to the report provided to the SC Daily Gazette.
Before the advent of NIL, those tuition discounts were about the only annual financial support Clemson athletics received from the college, the report showed.
Those college dollars also aren’t unique to Clemson.
“It has been for more than two decades a standard and accepted component of college athletics across the country,” Athletic Director Graham Neff told senators.
At the University of South Carolina, the college chipped in $43 million for athletics in the last budget cycle, compared to $26 million the year before and $9 million prior.
Most of that — $29 million — went to cover operations following NIL-driven fundraising dips. About $10.5 million were tuition discounts and $3 million was for video production.
Both schools’ athletics directors told senators this money is kept in a separate account from the revenue shared with athletes.
Simply keeping the money in separate accounts was not enough to satisfy Sen. Richard Cash.
“At the most basic level, money is fungible,” the Powdersville Republican said. “So, if you take $20 million of tuition money or institutional support for athletics, and you backfill that with $20 million that the state’s given the university, what’s the difference?”
There’s also nothing in state law preventing the college athletic departments from using taxpayer or tuition dollars to pay athletes in the future, which Massey called troubling as the cost of a college degree rises and families struggle to afford it.
“I have no reason at all to disbelieve what any of you have told us about,” Massey said. “But you are not always going to be in those positions. The people who currently occupy the boards of trustees are not always going to be in those positions. Who knows what types of competitive pressures are going to come going forward, and who knows what your fundraising abilities are going to be going forward.”
“If there is tuition money that’s going to support these types of payments, that’s a problem. If there’s state-appropriated dollars that are going to support that, that’s a problem. So I think, I think we do need to look at those laws, because this has gotten ahead of us,” he added.
McMaster, speaking to reporters, also has expressed concerns over secrecy but has not yet indicated whether he will sign the bill should the Senate take it up again.
“I think there has to be public disclosure of money coming into a public institution,” he said. “You cannot have secret funds, you can’t have secret money, in a public institution.”
Courtesy of South Carolina Daily Gazette
