NCAA, leagues sign $2.8 billion plan, paving the way for dramatic changes in college sports

The NCAA and the nation’s five largest conferences have agreed are paying nearly $2.8 billion to settle a host of antitrust claimsa monumental decision that paves the way for a groundbreaking revenue sharing model that could send millions of dollars directly to athletes once the fall 2025 semester begins.

The deal must still be approved by the federal judge overseeing the case and challenges could arise, but if the agreement holds, it will mark the beginning of a new era in college sports where athletes are compensated more like professionals and schools can compete for talent using direct entry. payments.

“There’s no doubt about that. It’s a huge leap forward,” said Tom McMillen, the former Maryland basketball player and congressman who led a group of collegiate athletics directors over the past year.

The Pac-12 was the last conference to sign as university leaders voted Thursday to approve the plan, according to a person with direct knowledge of the decision. Southeastern Conference school leaders unanimously approved the deal a few hours earlier, a second person with knowledge of that decision said. Both spoke to The Associated Press on condition of anonymity because a coordinated announcement between the Pac-12, SEC, Big Ten, Big 12, Atlantic Coast Conference and NCAA was still being prepared. All met the Thursday deadline set by the plaintiffs’ lawyers.

The details in the plan spell the end of the NCAA’s fundamental amateurism model, which dates back to its founding in 1906. The days of NCAA penalties for athletes who drove cars with boosters began to disappear three years ago when the organization has lifted restrictions on endorsement deals supported by so-called name, image and likeness money.

Now, it’s not far-fetched to look ahead to seasons where a star quarterback or a top player on a college basketball team not only cashes in big-money NIL deals but also has a $100,000 college payment in the bank to play.

Many details remain to be determined, but the agreement calls for the NCAA and its conferences to pay $2.77 billion over 10 years to more than 14,000 former and current college athletes who say now-defunct rules left them from monetizing its 2016 endorsement and sponsorship deals.

“Even if only because of overwhelming 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’s no going back. That is really groundbreaking.”

Some of the money will come from NCAA reserve funds and insurance, but even though the lawsuit specifically targeted 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 massive payout.

Schools in the Big Ten, Big 12, Atlantic Coast and Southeastern conferences will ultimately bear the brunt of the settlement, to the tune of approximately $300 million each over 10 years, most of which will be awarded to athletes in the future will be paid.

The Pac-12 is also part of the settlement, with all 12 sharing responsibility, even though Washington State and Oregon will be the league’s sole members this fall after the other 10 schools leave.

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, but as revenues rise, that could also increase the cap.

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 limits per sport will be replaced by roster limitations.

Whether the new compensation model falls under the Title IX Gender Equity Act is unknown, as is whether schools will be able to bring NIL activities in-house, as they hope, and the booster-run collectives that have emerged in recent years. to squeeze out. pay athletes. Both topics could lead to more lawsuits.

The federal lawsuit at the center of the settlement, House vs. the NCAA, was expected to appear in court in January. The complaint, filed by former Arizona State swimmer Grant House and Sedona Prince, a former Oregon and current TCU basketball player, said the NCAA, along with the five wealthiest conferences, improperly prohibited athletes from earning endorsement money.

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

Amid political and public pressure, and faced with the prospect of another lawsuit that some in college sports said could amount to $20 billion in damages, NCAA and conference officials conceded what has long been a core tenet of the company : that schools do not directly pay the athletes to play outside of a scholarship.

That principle had been dented countless times over the past ten years.

It is striking that the Supreme Court ruled unanimously against the NCAA in 2021 in a case related to education-related benefits. The narrow focus of the Alston case did not collapse the collegiate sports system, but its strong rebuke of the NCAA model of amateurism opened the door to more lawsuits. Judge Brett Kavanaugh, a former Yale athlete, put it bluntly: “The bottom line is that the NCAA and its member colleges suppress the compensation of student athletes who collectively generate billions of dollars in revenue for colleges each year.”

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

A fourth case, Fontenot vs. NCAA, creates a potential complication because it remains after a judge in a Colorado court a request rejected to combine it with Carter. Whether Fontenot will be part of the settlement is unknown, which is important because the NCAA and its conferences do not want to be on the hook for even 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 settlement offer once they are actually released and brought to trial,” said George Zelcs, an attorney for the plaintiffs in Fontenot. .

The resolution agreed in the settlement is a milestone, but not surprising. Student 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, the former governor of Massachusetts who has been in office for 14 months, proposed creating a new level of Division I athletics with the most resourced schools required to pay at least half of their athletes $30,000 per year. That suggestion, along with many other possibilities, remains up for debate.

The settlement does not make all the problems facing college sports go away. There is still the question of whether athletes should be dear employees of their schools, something Baker and other college sports leaders are fight against.

Some form of federal legislation or antitrust relief is likely still needed to codify the terms of the settlement, protect the NCAA from future lawsuits and pre-empt state laws that seek to neutralize the organization’s authority. Like it is, the NCAA continues to face lawsuits that challenge the country’s ability to govern itself, including setting rules that limit multiple transfers.

Federal lawmakers have indicated they are eager to get something done, but only for so long Various bills have been submitted no one went anywhere.

Despite the unanswered questions, one thing is clear: Major college athletics are about to become more like professional sports than ever before.