The final barrier preventing colleges from paying student athletes appears to be on its last legs.
The NCAA and the nation’s five largest conferences announced Thursday night that they have agreed to pay nearly $2.8 billion to settle a series of antitrust lawsuits, a monumental decision that lays the groundwork for an innovative revenue-sharing model that could begin to allocate millions of dollars directly. to athletes as soon as the fall 2025 semester.
NCAA President Charlie Baker, along with commissioners from the Atlantic Coast Conference, Big Ten, Big 12, Pac-12 and Southeastern Conference issued a joint statement saying they had agreed to the terms of the deal. They called the move “an important step in the continued reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics across all divisions for years to come.”
The NCAA had opposed any form of compensation for athletes for years, but bowed to growing pressure in 2021 by allowing competitors to profit from their name, image and likeness (NIL).
Since then, some athletes like former LSU gymnast Olivia Dunne have made millions building their personal brands on social media, while other lower-profile players have been paid little or nothing.
Olivia Dunne of the LSU Tigers celebrates after winning the national championship in April.
The NCAA and the nation’s five largest conferences announced Thursday night that they have agreed to pay nearly $2.8 billion to settle a series of antitrust lawsuits.
The settlement must still be approved by the federal judge overseeing the case and challenges could arise, but if the agreement stands, it will usher in a new era in college sports where athletes receive compensation more like professionals. and schools can compete for talent through direct use. Payments.
‘No doubt about it. It’s a huge quantum leap,” said Tom McMillen, a former basketball player and congressman from Maryland who has led a college athletic directors association for the past eight years.
The terms were not revealed, although some details have emerged in recent weeks. They signal the end of the NCAA’s fundamental model of amateurism that dates back to its founding in 1906. In fact, the days of the NCAA punishing athletes who drove booster-equipped cars began to fade three years ago, when the organization lifted the rules. restrictions on sponsorship deals backed by so-called name, image and likeness money.
Not everyone is in favor of the agreement. Notre Dame’s president, in particular, is calling on Congress to prevent student-athletes from becoming employees.
“The agreement, while undesirable in many respects and promising only temporary stability, is necessary to avoid what would be the bankruptcy of college athletics,” Notre Dame President Rev. John I. Jenkins, CSC, said in a statement.
‘To save the great American institution of college sports, Congress must pass legislation that preempts the current patchwork of state laws; establish that our athletes are not employees, but rather students pursuing college degrees; and provide protection against future antitrust lawsuits that will allow universities to create and enforce rules that will protect our student-athletes and help ensure competitive fairness among our teams.’
South Carolina coach Dawn Staley has helped her players secure NIL deals worth $25,000.
Now, it’s not unreasonable to look ahead to seasons where a star quarterback or top prospect on a college basketball team is not only cashing in big-money NIL deals, but has a $100,000 school payout in the bank for play.
“This historic settlement will bring college sports into the 21st century, and college athletes will finally be able to receive a fair share of the billions of dollars in revenue they generate for their schools,” said Steve Berman, one of the lead attorneys for the plaintiffs. . . “Our clients are the foundation of the NCAA’s multi-billion-dollar business and can finally be compensated equitably and fairly for their extraordinary athletic talents.”
Many details remain to be determined, but the settlement calls for the NCAA and conferences to pay $2.77 billion over 10 years to more than 14,000 current and former college athletes who say now-defunct rules prevented them from making money from sponsorship. and sponsorship deals dating back to 2016.
“Although it was only because of overwhelming legal pressure, the NCAA, the conferences and the schools agree that college athletes should be paid,” said Ramogi Huma, a former UCLA football player and longtime advocate of college athletes. And from there there is no turning back. “That’s really innovative.”
Some of the money will come from NCAA reserve and insurance funds, but while the lawsuit specifically targeted five conferences that are made up of 69 schools (including Notre Dame), dozens of other NCAA member schools will see smaller distributions from the NCAA to cover the gigantic pay.
Schools in the Big Ten, Big 12, Atlantic Coast and Southeastern conferences will end up bearing the brunt of the deal at a cost of about $300 million each over 10 years, most of which will be paid to athletes in the future.
The Pac-12 is also part of the deal, with the current 12 schools sharing responsibility even though Washington State and Oregon State will be the only league members left this fall after the other 10 schools fold. go.
Michigan Wolverines head coach Jim Harbaugh hoists the championship trophy
Under the new compensation model, each school will be allowed, but not required, to set aside up to $21 million in revenue to share with athletes each year, although as revenue increases the cap could also increase.
Athletes in all sports would be eligible to receive payments and schools would be free to decide how that money is divided among sports programs. Scholarship limits per sport will be replaced by roster restrictions.
It is unknown whether the new compensation model is subject to the Title IX gender equity law and whether schools will be able to conduct NIL activities internally as they expect and eliminate the booster groups that have emerged in recent years. to pay athletes. Both issues could lead to more lawsuits.
The solution agreed upon in the agreement is historic, but not surprising. College sports have been trending in this direction for years, with athletes increasingly receiving monetary benefits and entitlements that they say are long overdue.
Southern California’s McKenzie Forbes reacts after Pac-12 tournament win in March
In December, Baker, the former Massachusetts governor who has been in office for 14 months, proposed creating a new level of Division I athletics in which wealthier schools would have to pay at least half of their athletes. $30,000 a year. That suggestion, along with many other possibilities, remains the subject of debate.
The agreement does not make all the problems facing college sports go away. There is still a question of whether athletes should be considered employees of their schools, something Baker and other college sports leaders are fighting against.
Some form of federal legislation or antitrust exemption is likely still needed to codify the terms of the deal, protect the NCAA from future litigation and preempt state laws that attempt to neutralize the organization’s authority. As things stand, the NCAA still faces lawsuits that challenge its ability to govern itself, including establishing rules limiting multiple transfers.
It’s unclear what impact Thursday’s announcement will have on NIL deals, which have come to dominate college sports.
