The SEC is considering adopting a luxury-tax system to punish member schools that exceed the allotted revenue-sharing cap for player spending, sources told ESPN's Mark Schlabach and Pete Thamel.
Athletic directors, university presidents, and general counsels have reportedly been considering the issue, and the conference would like to approve the tax before football's early signing period begins Dec. 2.
The revenue-sharing cap for 2026-2027 was $21.3 million under the terms of the House vs. NCAA settlement and will rise to about $22.2 million in 2027-28. Debate continues over how a luxury tax would be implemented, but a school could be taxed 1% for every million it overspends and 3% for every $3 million, Thamel and Schlaback report.
The SEC apparently hopes a luxury tax would increase transparency about program spending as well as deter programs from exceeding the revenue-sharing cap. Some schools want the penalties to be minimal in order to encourage accurate reporting, a source told Schlabach and Thamel.
It's not clear how the SEC would spend whatever money it collects from a luxury tax. It reportedly wouldn't replicate MLB's luxury-tax system, which funnels some of the money to small-market teams with lower revenue.
In October, the Big Ten adopted a conference-wide rule limiting schools' involvement in third-party NIL deals ahead of the Protect College Sports Act's potential passage in Congress. However, Tuesday's midterm election results cast doubt on whether the act will pass.
