NCAA, leagues sign off on $2.8 billion plan to set stage for dramatic change across college sports

The NCAA and the nation’s five largest conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims, a monumental decision that paves the way for a groundbreaking revenue-sharing model that will cost millions of dollars could send directly to athletes as soon as the fall 2025 semester.

The Pac-12 became the latest conference to sign the proposal on Thursday, when university leaders voted to approve it, according to a person with direct knowledge of the results.

The presidents and chancellors of the Southeastern Conference unanimously approved the deal earlier Thursday, another person with knowledge of that decision told the Associated Press. Both spoke on condition of anonymity because an official announcement between the Pac-12, SEC, Big Ten, Big 12, Atlantic Coast Conference and NCAA was still pending.

The other organizations voted to approve earlier this week, ahead of the Thursday deadline set by plaintiffs’ lawyers.

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.

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 lifted restrictions on endorsement agreements. through 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.

Some of that money will come from NCAA reserve funds and insurance, but while the lawsuit specifically targeted five conferences made up of 69 schools (including Notre Dame), dozens of other NCAA member schools will receive smaller payouts from the NCAA see to cover the mammoth. 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 only league members left 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 class action lawsuit at the center of the settlement, House v. the NCAA, was scheduled to go to trial 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.

Notably, 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 are suppressing the wages 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 before a Colorado court after a judge denied a request to combine the case 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. College 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 14-month governor of Massachusetts, proposed creating a new level of Division I athletics that would require the most resourced schools to provide at least the half of their athletes $30,000 per month. 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 considered employees of their school, something Baker and other athletic leaders are fighting 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. The NCAA continues to face lawsuits questioning its ability to govern itself, including enacting rules limiting multiple transfers.

Federal lawmakers have indicated they would like to get something done, but while several bills have been introduced, none have come to fruition.

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


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