The University of Hawaii did not score taxpayer funding this year to pay student-athletes, but school officials aren’t accepting defeat in recruiting and retaining key players with pay on par with peer institutions.

UH, which has about 500 student-athletes on 21 teams, made a novel request to the Legislature in January seeking $5 million to compensate an estimated 100 or more players for their name, image and likeness, or NIL, in the upcoming academic year after a national legal settlement opened the door in July for schools to make such payments.

The ask, which drew support in the House and opposition in the Senate, failed.

Although an alternate proposal initiated by some senators resulted in a House-Senate compromise that would have given UH $1.5 million for immediate NIL use, it collapsed in a close final Senate vote after the university’s chief financial officer asked for a deferral.

Still, UH Athletic Director Matt Elliott said his department already had committed to NIL deals with student-athletes for the upcoming academic year aimed at keeping major revenue-generating sports competitive.

“We’ve already promised essentially that $5 million budget to the student-athletes who will be here for the ‘26-‘27 academic year,” he said in a May 20 interview, nine days after the UH men’s volleyball team won a national championship and 12 days after the NIL alternate funding bill died on the last day of this year’s legislative session.

How to pay for those NIL deals remains undecided, though Elliott is exploring potential for UH to cover the expense.

“We’re in the budget process right now,” he said. “Our mindset is we’ve got to find those resources to cover those expenses. … We’ll find a way.”

Historically, UH athletics has often had financial deficits covered by other university funds.

The $5 million outlay is on top of $3 million that UH committed to NIL deals for the current academic year being raised from private donors in a campaign that to date has secured over $1.6 million.

UH officials estimate that staying competitive in the NCAA’s Mountain West Conference of mid-major schools will take $5 million a year in the near-term outside of NIL deals paid for by private sources that include donations and corporate sponsorship arrangements.

Obtaining such funding from the Legislature was in a school game plan that led to a few routes for success but got blocked in the Senate after several months of effort.

New playing field

Two legislative committees overseeing higher education in November hosted an informational briefing for UH to explain what school officials described as a new era of collegiate athletics forced on schools by the settlement of antitrust litigation against the NCAA in July.

“It has changed the landscape,” UH football head coach Timmy Chang said at the Nov. 12 briefing. “College athletics has changed, and we are trying to change with it.”

Elliott and Laura Beeman, then-head coach of the UH women’s basketball team, also participated in the briefing, during which lawmakers heard about the pressure placed on the school in the wake of the litigation in which student-athlete plaintiffs argued they should be compensated for contributing to university revenue generated from sports.

Under the settlement in House v. NCAA, schools can use public funding for NIL deals amounting up to 22% of certain athletic revenue streams that include ticket sales, media rights and corporate sponsorships. The limit rises 4% in each of the next two years.

For UH, the current revenue-sharing limit amounts to around $5 million. For schools with the biggest sports programs, the limit this year is $20.5 million.

Previously, paying college players had been limited to deals from private donors, corporate sponsors and other third parties.

Rep. Andrew Garrett, chair of the House Higher Education Committee, endorsed UH’s bid in part over concern the university could fall into a “death spiral” with fans losing interest if teams can’t compete, which in turn could lead to UH moving to a lower division or possibly disbanding athletics.

“We live in a different competitive landscape,” Garrett (D, Manoa) said during the briefing. “And I think that we have to decide, as a community, do we want UH to remain competitive or not? If the answer is yes, then I think we’re going to have to step up as a state to give this university the resources that they need.”

Three bills

The initial draft of the state budget, House Bill 1800 put forth by Gov. Josh Green, included a $5 million NIL appropriation. The House subsequently passed its draft of HB 1800 with such funding, but later the Senate cut it and the final draft agreed to in a House-Senate compromise had no NIL funding for UH.

Separately, House Bill 2384 was introduced by 16 House members led by Garrett and proposed $5 million for NIL in conjunction with UH policy requirements and student-athlete protections.

An initial public hearing on HB 2384 held by the committee chaired by Garrett took place at Bachman Hall on UH’s Manoa campus instead of at the state Capitol and attracted in-person testimony from several UH coaches, student-athletes and alumni in addition to Elliott and UH President Wendy Hensel.

“It’s hard to build a culture when you see teammates here for a year and leave,” UH baseball player and former Kamehameha Schools star Elijah Ickes told committee members, referring to players going to other schools due to enticing NIL offers.

HB 2384 passed the House in a 47-3 vote on March 5 but was never scheduled for a hearing in the Senate.

A group of senators, including some opposed to UH paying players with taxpayer funding, crafted their own bill to create an endowment fund for generating income that UH could use for NIL payments.

Senate Bill 3263 initially called for matching $5 million contributions from the state’s general fund and from UH, limiting the school to using investment returns from the $10 million endowment for NIL payments. A $10 million endowment was expected to generate $500,000 a year in returns.

Elliott, during a Feb. 11 hearing on the bill, told two Senate committees that UH supported the bill as a supplement to its desired $5 million for NIL payments, and that he was hesitant about UH putting $5 million into a fund that wouldn’t come close to meeting the school’s NIL program goals.

At the same time, however, UH leaders were facing criticism at the Legislature for amassing over $350 million in reserves.

Untapped resource

Six senators led by Sen. Donovan Dela Cruz (D, Mililani-Wahiawa-Whitmore Village) introduced a bill in January to sweep the excess from a special university fund into the state’s general fund while UH was asking for $5 million from the general fund for NIL payments.

During one hearing on the measure, Senate Bill 2602, UH Chief Financial Officer Luis Salaveria explained that the university’s tuition and fees special fund balance had ballooned to $352 million largely due to federal COVID-19 pandemic aid.

Salaveria said about $144 million of the balance was held as a budget reserve under UH policy, and that school officials hadn’t devised a plan to put the rest to use in a strategic and systematic way likely over several years, subject to UH Board of Regents approval.

Hensel testified on the bill during a Feb. 13 hearing, two days after testifying on the House NIL funding bill, and told the Senate Education Committee chaired by Sen. Donna Kim (D, Kalihi-Fort Shafter-Red Hill) that UH should never be “sitting on” such a balance with no productive use.

“I don’t want anybody to ask me for a dime when they have a dollar in their hand,” Hensel said. “And I feel the same as we come to you and ask for funding.”

The bill aimed at sweeping some of the special UH fund’s balance didn’t pass. But several lawmakers who considered SB 2602 also were involved in NIL funding bills, including the one that made it to the last day of this year’s legislative session May 8.

Win-win-lose

Kim and Garrett as chairs of education committees in the Senate and House, respectively, hashed out a compromise on the NIL endowment fund legislation on the last day possible, May 1, just seven minutes before a deadline to do so.

Instead of the originally proposed $10 million endowment established equally by UH and a state appropriation, the compromise draft of SB 3263 called for $4 million from UH and $1 million from the state to create a $5 million endowment expected to produce about $250,000 in annual income for NIL payments.

The new draft also included a $1.5 million state contribution that UH could immediately use for NIL payments.

Kim noted that UH could deposit its $4 million share by withdrawing that amount from the over $200 million excess balance in the school’s special fund.

Garrett agreed to the new terms in the bill, setting it up for final House and Senate votes May 8.

“It’s been a teamwork on this measure, and I’m just glad that we’re able to support our student-athletes,” Kim said as the agreement was reached. “I think this is a win-win situation for everybody.”

UH, however, didn’t view it that way. Before the final vote, Salaveria emailed lawmakers heading committees focused on state finances — Dela Cruz as chair of the Senate Ways and Means Committee and Rep. Chris Todd as House Finance Committee chair — to say UH preferred the bill not be passed.

“We appreciate the time and thought you have put into this,” Salaveria wrote. “Whil...

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