College athletes could be receiving direct payments from their schools as early as 2025.
In the latest of the seismic shifts that have been reshaping college athletics since 2021, the NCAA and its five major conferences agreed Thursday to a $2.8 billion settlement in several antitrust suits, along with a revenue-sharing model that would “crush any last notions of amateurism in major college sports,” according to The Wall Street Journal.
“A day few would have deemed imaginable even three years ago, much less 30, has (almost) arrived,” The Athletic’s Stewart Mandel wrote. “... The leaders of college sports have agreed to something they’ve spent a century railing against — albeit begrudgingly, and only due to the pending threat of a verdict that would likely bankrupt the entire system.”
What’s the news?
The proposal, if approved, allows schools to pay their athletes directly “for the first time in the 100-plus-year history of college sports,” according to ESPN.
On Thursday, it was reported that the NCAA had approved the $2.8 billion settlement of antitrust claims in three cases, and that the SEC’s presidents and chancellors had voted unanimously to approve it. Later Thursday, major publications such as The Washington Post, Wall Street Journal and ESPN, citing sources, reported that the other major conferences — the ACC, Big Ten, Big 12 and Pac-12 — would agree to the settlement as well.
The NCAA and the five conferences then released a statement:
“The five autonomy conferences and the NCAA agreeing to settlement terms is an important step in the continuing reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics across all divisions for years to come. This settlement is also a road map for college sports leaders and Congress to ensure this uniquely American institution can continue to provide unmatched opportunity for millions of students. All of 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 next chapter of college sports.”
The settlement:
- Covers three cases — House v. NCAA, Hubbard v. NCAA and Carter v. NCAA.
- Must be approved by the plaintiffs, according to The Washington Post.
- Terms “must be approved by Judge Claudia Wilken, who is presiding over all three cases,” according to ESPN.
“With the proposal the NCAA, SEC, Big Ten, Big 12, ACC and Pac-12 voted on, the power conferences will pay 40 percent of the damages owed from schools,” according to The Washington Post. “The other 27 conferences will shoulder the remaining 60 percent.”
How will it work, and how is this different than NIL?
The era of NIL, ushered in by a 2021 Supreme Court ruling, allowed college athletes to be compensated for their name, image and likeness. But that money didn’t come directly from schools.
“In the new compensation model, each school will be permitted but not required to set aside up to $21 million in revenue to share with athletes per year, though as revenues rise so could the cap,” The Associated Press reported. “Athletes in all sports would be eligible for payments and schools would be given the freedom to decide how that money is divvied up among sports programs. Scholarship limits by sport will be replaced by roster restrictions.”
Mandel, however, argues that NIL collectives — organizations that help assist student-athletes in the NIL era — will still be very much in play.
“The settlement will allow, say, Ohio State, to share up to $20 million with its athletes,” Mandel wrote. “Which seems like a lot. But schools won’t be able to give all $20 million of it to the football team, lest they themselves want to be sued by their women’s sports athletes. ...
“NIL collectives won’t need to raise as much money as they do currently, but they will likely serve as a salary cap workaround of sorts for the upper-tier programs with national championship ambitions. After all, boosters were inducing recruits well before NIL, and there’s no reason to think they’ll stop in the new model.”