The NCAA and the nation’s five largest conferences said Thursday night they had agreed pay nearly $2.8 billion to settle multiple antitrust lawsuitsa monumental decision that sets the stage for a revolutionary revenue sharing model that could begin funneling millions of dollars directly to athletes as early as the fall 2025 semester.
NCAA President Charlie Baker, along with the commissioners of the Atlantic Coast Conference, Big Ten, Big 12, Pac-12 and Southeastern Conference, released a joint statement Thursday night announcing they had agreed settlement conditions. They called the move “an important step in the ongoing reform of college sports that will provide benefits to student-athletes and ensure clarity in college athletics across all divisions for years to come.”
The deal still must be approved by the federal judge overseeing the case and there could be problems, but if the agreement stands, it will usher in a new era in college sports in which athletes are compensated more than professionals and schools can compete for talent using direct payments.
“There is no doubt about it. This is a huge quantum leap,” said Tom McMillen, a former Maryland basketball player and congressman who has led the Association of Collegiate Athletic Directors for the past eight years.
Details of the plan signal the end of the NCAA’s fundamental amateurism model, which dates back to its founding in 1906. Indeed, the days of NCAA penalties for athletes driving power-assisted cars began to fade three years ago when the organization restrictions on endorsements have been lifted backed by so-called name, image and likeness money.
Now, it’s not hard to look into the future when a star guard or top prospect on a college basketball team is not only making big money deals for zero money, but also has a $100,000 school payment in the bank to play with.
There are many details are yet to be determined, but the agreement requires the NCAA and conferences to pay $2.77 billion over 10 years to more than 14,000 former and current college athletes who say now-defunct rules prevent them from earning money from endorsement and sponsorship deals struck in 2016 .
“Even though it only happened because of enormous legal pressure, the NCAA, conferences and schools agree that college athletes should be paid,” said Ramogi Huma, a former UCLA football player and longtime advocate for college athletes . “And from there there is no turning back. It’s truly revolutionary.”
Some of the money will come from NCAA reserve funds and insurance, but while the lawsuit specifically targets the five conferences, which include 69 schools (including Notre Dame), dozens of other NCAA member schools The NCAA will see smaller payouts to cover the gigantic payouts.
Schools in the Big Ten, Big 12, Atlantic Coast and Southeastern Conferences will ultimately bear the brunt of the settlement, which will cost about $300 million each over 10 years, most of which will be paid athletes in the future.
The Pac-12 is also part of the deal, with all 12 schools sharing responsibility, although Washington State and Oregon will be the only league members remaining this fall after the other 10 schools leave.
PAYING ATHLETES
Under the new compensation model, each school would be allowed, but not required, to set aside up to $21 million in revenue to pay athletes per year, although the cap could increase as revenue increases.
Athletes in all sports would be eligible for payments, and schools would be given the freedom to decide how that money is distributed among sports programs. Scholarship restrictions by sport will be replaced by roster restrictions.
It is unknown whether the new compensation model will fall under the Title IX Gender Equity Act, or whether schools will be able to bring NIL events in-house, as they hope, and displace the supported collectives that have emerged over the past few years. pay athletes. Both topics could lead to new lawsuits.
CASE
Federal class action lawsuit at center of settlement, House v. NCAA was due to appear in court in January. The complaint, filed by former Arizona State swimmer Grant House and Sedona Prince, a former Oregon State player and current TCU basketball player, alleges that the NCAA, as well as the five richest conferences, improperly bar athletes from earning endorsement money.
The lawsuit also argued that athletes are entitled to a portion of the billions of dollars the NCAA and those conferences earn from media rights agreements with television networks.
Amid political and public pressure, and facing the prospect of another legal loss that some in college sports have argued could reach $20 billion in damages, NCAA and conference officials acknowledged what has long been a core tenet of the enterprise: schools do not do this directly. pay athletes for playing on top of their stipend.
Over the past decade, this principle has been violated several times.
Remarkably, the Supreme Court ruled unanimously. vs. NCAA in 2021 in case related to education related benefits. The narrow focus of the Alston case did not destroy the college sports system, but the scathing condemnation of the NCAA’s amateurish model opened the door to more lawsuits. Justice Brett Kavanaugh, a former Yale athlete, put it bluntly: “The bottom line is that the NCAA and its member colleges are suppressing payments to student-athletes who collectively generate billions of dollars in revenue for colleges every year.”
OTHER CASES
The settlement is expected to cover two other antitrust cases faces the NCAA and major conferences challenging athlete compensation rules. The cases of Hubbard v. NCAA and Carter v. NCAA are also currently pending before judges in the Northern District of California.
The fourth case, Fontenot v. NCAA, poses a potential complication because it remains in Colorado court after a judge rejected the request team him up with Carter. It is unknown whether Fontenot will be part of the settlement, and that matters because the NCAA and its conferences don’t want to be on the hook for more damages if they lose in court.
“We intend to continue litigating our case in Colorado and look forward to hearing about the terms of the settlement offer once it is actually published and filed in court,” said George Selks, the plaintiffs’ attorney in Fontenot. .
MAJOR RENOVATION OF THE COLLEGE OF ATHLETICS
The solution reached under the agreement is significant, but not surprising. College sports have been moving in this direction for years, with athletes receiving more and more monetary benefits and rights that they say are long overdue.
In December, NCAA President Charlie Baker, a former governor of Massachusetts who served in the post for 14 months, proposed the creation of a new level of Division I athletics. where schools with the most resources would be required to pay at least half of their athletes $30,000 per year. This proposal, like many other possibilities, remains under discussion.
The settlement does not solve all the problems facing college sports. The question still remains whether athletes should are considered employees their schools that Baker and other college sports leaders are fighting against.
Some federal legislation or antitrust waivers are likely still needed to codify the terms of the settlement, protect the NCAA from future litigation and preempt state laws that attempt to weaken the organization’s authority. As it is, The NCAA is still facing lawsuits. this calls into question his ability to govern himself, including setting rules to limit multiple passes.
Federal lawmakers have made it clear they want to do something, but although… several bills have been introduced no one went anywhere.
Despite the unanswered questions, one thing is clear: college athletics will soon look more like professional sports than ever before.