NCAA, leagues support $2.8 billion deal, setting the stage for current and former athletes to get paid

The NCAA and the nation’s five largest conferences announced Thursday night that they have agreed to pay nearly $2.8 billion to resolve a series of antitrust claims, a monumental decision that sets the stage for an innovative revenue-sharing model. that could start directing 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 saying they had agreed to the terms of the deal. They called the move “an important step in the ongoing reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics across all divisions for years to come.”

Terms have not been disclosed, although some details have emerged in recent weeks. They signal the end of the NCAA’s fundamental model of amateurism that dates to its founding in 1906. In fact, the days of NCAA punishment for athletes who drove boosted cars began to fade three years ago, when the organization lifted restrictions on agreements. endorsements supported by so-called name, image and likeness money.

The settlement still needs to be approved by the federal judge overseeing the case, and plaintiffs will have the opportunity to cancel or contest the terms of the settlement. If so, it will usher in a new era in college sports, where athletes are paid more like professionals and schools can compete for talent through direct payments.

“There is no doubt about it. It’s a huge quantum leap,” said Tom McMillen, a former Maryland basketball player and congressman who has led an association of college athletic directors for the past eight years.

Now it’s not a stretch to look to the future, to seasons where star quarterbacks or top prospects on college basketball teams are not only cashing in on big NIL deals, but also have six-figure college paydays in the bank for playing.

“This historic settlement will bring college sports into the 21st century, with college athletes finally able to receive a fair share of the billions of dollars of revenue they generate for their schools,” said Steve Berman, one of the plaintiffs’ lead attorneys. . “Our clients are the foundation of the NCAA’s multibillion-dollar business and can finally be compensated equitably and fairly for their extraordinary athletic talents.”

There are still a number of details 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 former and current college athletes who say now-defunct rules held them back. to make money from endorsements. and sponsorship agreements dating back to 2016.

“Even if it was just because of overwhelming legal pressure, the NCAA, conferences and schools are agreeing that college athletes should be paid,” said Ramogi Huma, a former UCLA football player and longtime advocate for athletes. College students. “And there is no going back. This is truly groundbreaking.”

Some of the money will come from the NCAA’s reserve and insurance funds, but while the lawsuit specifically targets five conferences made up of 69 schools (including Notre Dame), dozens of other NCAA member schools will see smaller distributions from the NCAA to cover the mammoth payout. .

Schools from the Big Ten, Big 12, ACC and SEC will likely end up bearing the brunt of the deal going forward, at an estimated cost of about $300 million each over 10 years, most of which would be paid directly to athletes.

“The agreement, while undesirable in many respects and promising only temporary stability, is necessary to avoid what would be the bankruptcy of college athletics,” said Notre Dame President Rev. John I. Jenkins.

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 per year, although as revenue increases, the limit may also increase.

Athletes in all sports would be eligible for payments and schools would have the freedom to decide how that money would be 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, as well as whether schools will be able to bring NIL activities in-house as they expect and squeeze out the booster-run collectives that have emerged in recent years to pay athletes. Both topics could lead to more lawsuits.

The federal class action lawsuit at the center of the settlement, House v. NCAA, was set to go to trial in January. The complaint, filed by former Arizona State swimmer Grant House and former Oregon basketball player and current TCU basketball player Sedona Prince, said the NCAA, along with the five richest conferences, improperly banned athletes from earning sponsorship money.

The suit also argued that athletes were entitled to a share of the billions of dollars the NCAA and these conferences earn from media rights deals with television networks.

Amid political and public pressure, and facing the prospect of another legal loss that some college athletes have claimed could reach $20 billion in damages, NCAA and conference officials have admitted what has been a fundamental tenet of the endeavor: that schools do not pay athletes to play beyond their scholarship.

This principle has been undermined numerous times in the last decade. Notably, the Supreme Court unanimously ruled against the NCAA in 2021 in a case related to education-related benefits.

The narrow focus of the Alston case did not bring down the college sports system, but the strong rebuke of the NCAA’s amateurism model opened the door for more lawsuits. Judge Brett Kavanaugh, a former Yale athlete, put it bluntly: “The bottom line is that the NCAA and its member colleges are suppressing the salaries of student athletes who, collectively, generate billions of dollars in revenue for the colleges every year.”

The settlement is expected to cover two other antitrust cases facing the NCAA and major conferences that challenge athlete compensation rules. Hubbard v. NCAA and Carter v. NCAA are also currently before judges in the Northern District of California.

A fourth case, Fontenot vs, NCAA, creates a potential complication as it remains in a Colorado court after a judge denied a request to match him with Carter. It’s unknown whether Fontenot will become a party to the settlement, and that’s important because the NCAA and its conferences don’t want to be held liable for more damages if they lose in court.

“We will continue to litigate our case in Colorado and look forward to hearing about the terms of a proposed settlement once they are actually released and presented to a court,” said George Zelcs, attorney for the plaintiffs at Fontenot. .

The solution agreed 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 rights that they say are long overdue.

In December, Baker, the former governor of Massachusetts who has been in office for 14 months, proposed creating a new level of Division I athletics, where schools with the most resources would be required to pay at least half of their athletes US$ 30 thousand per year. This suggestion, along with many other possibilities, remains under discussion.

The agreement does not eliminate all of the problems facing college sports. There’s still a question of whether athletes should be considered employees of their schools, something Baker and other college sports leaders are wrestling with.

Some type of federal legislation or antitrust exemption will likely still be needed to codify the terms of the agreement, protect the NCAA from future litigation and preempt state laws that attempt to neutralize the organization’s authority. As it stands, the NCAA still faces lawsuits that challenge its ability to govern itself, including establishing rules that limit multiple transfers.

“This agreement is also a roadmap for college sports leaders and Congress to ensure this uniquely American institution can continue to provide unparalleled opportunities for millions of students,” the joint statement said. “Everyone at Division I made today’s progress possible, and we all have work to do to implement the terms of the agreement as the legal process continues. We look forward to working with our various student-athlete leadership groups to write the College Sports’ next chapter.”

Federal lawmakers have indicated they would like to do something, but although several bills have been introduced, none have gone anywhere.

Despite the unanswered questions, one thing is certain: College athletics is about to become more like a professional sport than ever before.

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Follow Ralph D. Russo on and listen at http://www.appodcasts.com

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