Big Ten, Big 12 get head start on revenue sharing with PayPal partnership

The era of revenue sharing in college athletics is upon us. After a federal judge finally signed off on a massive $2.8 billion settlement between the NCAA and lawyers representing student athletes, schools will be able to directly pay players for their talents as soon as July 1.

House v. NCAA, as it was known, has cleared the way for student athletes to be treated closer to employees rather than amateurs. Name, image and likeness payments (NIL) already laid the groundwork for private transactions between players and entities outside universities but now there will be a salary-like system set up for each respective sport.

One private company has already taken advantage of the new business atmosphere and acquired two of the biggest leagues in college athletics as its client. PayPal announced Thursday it has partnered with the Big Ten and Big 12 conferences to exclusively facilitate revenue sharing payments between schools and players.

The deal promises to prioritize "empowering the next generation of students and athletes" by keeping transactions secure through PayPal's platforms like Venmo and allowing payments to be used towards tuition, books and "real-world campus spending."

Big Ten and Big 12 leap headfirst into new revenue sharing era with PayPal partnership

As much as college athletics centers around the student athletes, they're a business first and foremost. Commissioners of each league are de facto CEOs and are always looking for new ways to keep their organizations profitable.

"[The House settlement] does usher in a new age for collegiate athletics and our student athletes who are incredibly excited about it," Big 12 commissioner Brett Yormark said Thursday on CNBC's Squawk Box. "Over the last 14 months we've been on an incredible journey with PayPal trying to find out where they could enter the ecosystem. And with rev share and how ubiquitous Venmo and PayPal are on campuses... it made incredible sense to have them partner with us."

It's a smart move for both conferences and a proactive one at that. Rather than leaving payments up to the schools, the conferences made the decision to centralize that process facilitate it through an experienced platform.

This system probably won't be without its problems but it's likely better than what the alternative could've been. Glitches, outages or even miscalculations would've created chaos and left student athletes in vulnerable positions with their finances.

The Big Ten and Big 12 are taking the lead in showing the rest of college athletics how to responsibly integrate revenue sharing into their new everyday lives.