American Athletic Conference Takes Bold Step in College Athletics Revenue Sharing Era

In a landscape where collegiate sports are undergoing unprecedented transformation, the American Athletic Conference (AAC) has positioned itself at the forefront of innovation. The conference recently made headlines by becoming the first NCAA conference to establish concrete revenue-sharing standards for its member institutions, setting a new benchmark in how athletic departments will operate in this evolving ecosystem.

Setting the Standard

On March 7, 2025, the AAC approved a groundbreaking initiative called the "Minimum Investment Program." This program requires member schools to share at least $10 million in additional benefits with their student-athletes over a three-year period beginning with the 2025-26 academic year.

This move represents a proactive approach to addressing the shifting paradigm in collegiate athletics following recent legal settlements that have fundamentally altered the economic relationship between universities and their student-athletes.

The Framework

The $10 million minimum threshold can be achieved through a combination of three distinct benefit categories now available to schools through the House antitrust lawsuit settlement:

1. New Scholarships: Schools can count up to $2.5 million in new scholarship offerings toward their total.
2. Direct Revenue Sharing: Institutions can include revenue directly shared with athletes, with the settlement allowing for a projected maximum of $20.5 million annually.
3. Alston Payments: Up to $2.5 million in Alston stipends—payments some schools have already been distributing to their student-athletes following a previous Supreme Court ruling—can be counted toward the requirement.

What makes this approach noteworthy is its flexibility. The AAC isn't dictating precisely how each institution must distribute these funds, instead providing autonomy while establishing a clear minimum expectation.

Commissioner Tim Pernetti, the driving force behind this initiative, described it as an "important moment for the conference" in an interview with Yahoo Sports. He emphasized the AAC's commitment to differentiation:

"We are committed to differentiating the American (Athletic Conference) in every way we can and we are committed to delivering an unrivaled experience for student-athletes and positioning our members in the best place for the future of college athletics."

This sentiment reflects the conference's strategic vision to stand out in an increasingly competitive collegiate sports marketplace, where athlete compensation has become a critical factor in recruitment and retention.

Accountability Measures

The program isn't just aspirational—it comes with consequences. Schools failing to meet the $10 million standard by the conclusion of the 2027-28 academic year could face a "review" of their membership status within the conference. This accountability mechanism underscores the seriousness with which the AAC views this commitment.

Notably, Army and Navy—federally funded service academies that are prohibited from opting into the settlement—are exempt from these requirements, reflecting the conference's recognition of their unique circumstances.

The AAC didn't arrive at the $10 million figure arbitrarily. The threshold was established following a comprehensive review conducted by the Huron Consulting Group, whose recommendations were presented to conference administrators in January 2025, just before the College Football Playoff national championship game.

Commissioner Pernetti has emphasized that the $10 million requirement represents only a floor, not a ceiling. According to him, many conference members already plan to exceed this threshold, indicating a collective ambition to maximize investment in student-athletes.

Broader Implications and Looking Ahead

The AAC's pioneering stance could have ripple effects throughout collegiate athletics. As the first conference to establish concrete revenue-sharing standards, they've set a benchmark against which other conferences may be measured. This could potentially accelerate similar initiatives across the NCAA as conferences compete not just on the field but in their approach to athlete compensation.

The implementation of this program signals a new era in college athletics, where conferences and institutions must navigate complex legal settlements while maintaining competitiveness. The AAC's approach represents a structured response to these challenges, one that maintains institutional flexibility while ensuring meaningful benefits reach student-athletes.

For athletic directors, university presidents, and conference commissioners across the country, the AAC's model provides a template worth studying. It demonstrates how conferences can establish consistent standards while allowing for institutional autonomy in implementation.

Conclusion

The American Athletic Conference's Minimum Investment Program represents a significant milestone in the evolution of college athletics. By establishing clear standards for revenue sharing while preserving institutional flexibility, the AAC has developed an approach that addresses both the letter and spirit of recent legal settlements while positioning its members for success in this new era.

As other conferences consider their own responses to the changing landscape of collegiate sports, the AAC's model may well serve as an influential blueprint for balancing athlete compensation with institutional needs and capabilities. In taking this bold step, the American Athletic Conference has demonstrated leadership at a critical juncture in the history of college athletics.

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