Thousands of former college athletes are eligible for payments ranging from a few dollars to more than a million dollars under a $2.78 billion antitrust settlement reached by the NCAA and five major conferences. The agreement also allows schools to compensate athletes directly while regulating booster payments.
Details of the elaborate plan were filed Friday in federal court in the Northern District of California, just over two months after the framework of an agreement was announced. The deal still needs to be approved by a judge.
“College athletes can finally share in the billions of dollars their compelling stories and dynamic performances have generated for their schools, conferences and the NCAA,” the filing reads. “This is nothing short of a seismic shift for college sports after more than four years of hard-fought victories in this case.”
The full list of requirements includes guidelines on the maximum selections for individual sports that will replace the scholarship caps. It also includes guidelines on how the new financial payments will be monitored and enforced to ensure schools comply. It also includes guidelines on how third-party payments to athletes will be regulated and how plaintiffs will pay out nearly $3 billion in damages over the next 10 years.
These payouts vary widely and are determined by the sport played, when, how long, and in which conference an athlete competed. While Division I athletes in all sports are eligible for compensation, the most compensation is expected to go to football and basketball players from major conferences, since those leagues and teams generate the bulk of the revenue generated by billions of dollars in media rights deals.
The deal includes three antitrust lawsuits, including the class-action lawsuit known as House v. the NCAA, which challenged the NCAA’s 2016 compensation rules. The plaintiffs alleged that the NCAA’s rules denied thousands of athletes the opportunity to earn millions of dollars from the use of their names, images and likenesses.
In 2021, the NCAA lifted its ban on athletes monetizing their fame through sponsorship deals.
The agreement does not address the issue of whether college athletes should be eligible for a statutory seat. dear employees, but it does contain language suggesting that the deal would be subject to change if “a change in law or circumstances permits collective bargaining.”
The NCAA and college sports leaders continue to ask Congress for help in the form of a federal law that would replace state laws and allow the association and conferences to govern themselves without fear of future antitrust lawsuits.
“This settlement is an important step forward for student-athletes and collegiate sports, but it does not address all the challenges,” the commissioners of the Atlantic Coast Conference, Big Ten, Big 12, Pac-12, Southeastern Conference and NCAA President Charlie Baker said in a joint statement. “The need for federal legislation to provide solutions remains. If Congress does not act, the progress achieved by the settlement could be significantly limited by state laws and continued litigation.”
While it seems unlikely that relief will come soon, especially with the presidential election still months away, college sports leaders hope the settlement can provide some certainty to schools and finally put an end to the ongoing legal attacks on the outdated model of amateurism.
The NCAA and the conferences have agreed to amend their rules to allow a groundbreaking compensation system that would allow schools to share up to $21 million in athletic revenue with their athletes annually, starting in 2025.
That figure is derived from taking 22% of the average revenue generated by media rights deals, ticket sales and other sources by power conference schools. The agreement will create an auditing system that will allow plaintiffs to track athletic revenue, which is expected to rise in the coming years as new conference media rights deals and the College Football Playoff take effect.
Athletes are expected to receive $1.5 to $2 billion annually.
All athletes are eligible for the new financial benefits, but each school will be able to decide for itself how to distribute the money across sports. Exactly how Title IX Rules for Gender Equality application is still unclear and requires federal clarification. How schools comply with Title IX is the responsibility of each institution.
To replace stock market limits of grid caps could mean even more opportunities for athletic scholarships in Division I.
Most importantly, major college football teams will now be allowed to have 105 players on scholarship, up from the current 85. However, schools will no longer be required to provide every college football player with a full scholarship.
Partial scholarships have been used in some sports for years, but are now allowed in all sports.
The caps for baseball (34), softball (25) and volleyball (18) will also significantly increase the number of scholarships schools can award for those sports, though schools will not be required to meet the cap.
The NCAA rules were recently changed to allow schools to be more involved in providing NIL opportunities for college athletes, but they are still allowed to enter into agreements with third parties.
A new voluntary reporting system for deals over $600 is scheduled to launch next month. The NCAA will create a public database that it hopes will help athletes assess fair market value.
Booster-funded NIL collectives have become a common way for athletes to be compensated, but now those deals will be subject to an arbitration process to determine whether they have a “valid business purpose,” the agreement said.
Violations may result in penalties for athletes and schools.
The plaintiffs in the House case are responsible for doling out damages. Included in Friday’s filing was a chart showing the categories of eligible athletes, along with four different types of payouts they could receive.
According to plaintiffs, about 19,000 top soccer and basketball players are eligible for an average of $91,000, with payments ranging from $15,000 to $280,000 just for the broadcaster’s name, image and likeness.
Some of those same athletes could also be eligible for tens of thousands of dollars more related to lost opportunities to earn NIL money while in college and what the plaintiffs consider pay-for-play. Attorneys for the plaintiffs say a few athletes are eligible for more than $1 million.
Attorneys for the plaintiffs say they will file a request for preliminary approval and that if the request is approved, a public website will go online in about two months where former student athletes can determine how much money they can receive.
Still, the settlement is still months away from final approval. Athletes who are members of the plaintiffs’ class will have the opportunity to object to the settlement and ask to be expelled. One school, Houston Christian, has already filed an objection — although the judge rejected the request for intervention.
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Follow Ralph D. Russo on https://twitter.com/ralphDrussoAP
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