A settlement being discussed in an antitrust lawsuit against the NCAA and major college conferences could cost billions and pave the way for a compensation model for college athletes.
An agreement has not been finalized and many questions remain unanswered. It’s also unclear whether the new rules could withstand further legal scrutiny, but it appears that college sports is heading down a revolutionary path, with at least some schools directly paying athletes to participate. Here’s what’s known and what still needs to be discovered:
House vs. NCAA is a federal class action lawsuit seeking compensation for damages to athletes who have been denied the opportunity since 2016 to earn money from the use of their name, image or likeness – often referred to by the acronym NIL. The plaintiffs, including former Arizona State swimmer Grant House, are also asking the court to rule that NIL compensation must include billions of dollars in media rights fees that go to the NCAA and wealthier conferences ( Big Ten, Big 12, Atlantic Coast and Southeastern). ), mainly for basketball.
The settlement being discussed could see the NCAA pay nearly $3 billion in damages over 10 years, with the help of insurance and withholding of distributions that would have gone to the Big Four conferences. Last year, NCAA revenue approached $1.3 billion and the association projects a steady increase in the coming years, thanks largely to raises included in television contracts with CBS and Warner Bros. Discovery for the men’s basketball tournament. A new eight-year, $920 million contract with ESPN for the Division I women’s basketball tournament and other championship events takes effect in 2025.
The potential deal also calls for a $300 million commitment from each school in those four conferences over 10 years, including about $20 million per year going toward paying athletes. Administrators warned that could lead to cuts in programs for so-called non-revenue sports familiar to fans who watch the Olympics.
“It’s the Olympic sports that would be in danger,” Alabama athletic director Greg Byrne said during a March panel in Washington led by Sen. Ted Cruz (R-Texas). “They are men and women. If you look at the numbers at the University of Alabama, with our 19 sports outside of men’s basketball, we collectively lost almost $40 million.”
Not entirely clear. Presumably, it would start with athletes in the sports that produce the most revenue: football and men’s basketball players at the biggest, richest programs. Women’s basketball is probably next in line, but it’s possible that athletes in all sports could see some benefit — but probably not at all schools.
What is being considered is allowing schools to pay athletes, but not requiring these payments. Schools that don’t bring in millions in TV revenue wouldn’t necessarily be at risk. There are also unanswered questions about whether the federal gender equality law, Title IX, would require equal funding for male and female athletes.
Getting the presidential councils of four conferences and the NCAA board of governors to approve a settlement is not a given, not to mention the plaintiffs in the House case. Still, the possibility of having to pay $4 billion in damages — and the NCAA has been on the losing end of many recent lawsuits — has sparked interest in a settlement before the trial begins in January.
The case is being heard in the Northern District of California by U.S. Judge Claudia Wilken, who has previously ruled against the NCAA in other landmark antitrust cases and ordered the sides in the House to seek a settlement.
Resolving existing cases is just one step. A new compensation system for college athletes would be needed to avoid similar challenges in the future; for example, anything that looks like a cap on compensation by, say, the four major conferences would be ripe for another lawsuit.
The NCAA has been asking Congress for some type of antitrust exemption for years, but the emphasis has recently shifted from regulating NIL compensation to preventing athletes from being considered employees.
A decision by an NLRB regional director cleared the way for members of the Dartmouth men’s basketball team to vote to join a union after being considered employees, and many have advocated collective bargaining as a solution to college sports’ antitrust exposure.
Jason Stahl, executive director of the advocacy group the College Football Players Association, says lawmakers should create a special status for college athletes that gives them the right to organize and bargain collectively without actual employee status.
Stahl said that while many college athletes are apprehensive about being employed and joining a union, they should have the right to decide.
“My concern is that there would be some kind of double whammy,” Stahl said of a court settlement followed quickly by federal legislation to codify a revenue-sharing plan that excludes athletes from employee status and the right to organize. “A lot of the things I hear about this cap are not things I want to hear.”
There are so many moving parts that it’s hard to say for sure, although resolving House seems like a priority for late spring or summer. The earliest time for any true changes seen on campus would be fall 2025.
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