NCAA, Power Five approve antitrust settlement, paving way for college athlete revenue model
The National Collegiate Athletics Association (NCAA) and the country's five biggest conferences have approved a nearly $2.8 billion antitrust settlement, paving the way for a new revenue-sharing model poised to boost compensation to student athletes.
NCAA President Charlie Baker, in a joint statement with the commissioners of Atlantic Coast Conference, Big Ten, Big 12, Pac-12 and Southeastern Conference, confirmed Thursday they agreed to terms that will settle a series of antitrust claims against them.
"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," the statement said.
The terms were not released, though multiple media outlets reported the settlement is equal to about $2.77 billion set to be distributed over 10 years to more than 14,000 former and current college athletes, who were unable to profit from sponsorship and endorsement deals dating back to 2016.
Should the deal be approved, it is expected to dramatically transform school athletic departments' revenue-sharing model, allowing students to be compensated more like professional athletes and for schools to compete for talent through direct payments, The Associated Press reported.
“This landmark settlement will bring college sports into the 21st century, with college athletes finally able to receive a fair share of the billions of dollars of revenue that they generate for their schools,” said Steve Berman, one of the lead attorneys for the plaintiffs, per the AP. “Our clients are the bedrock of the NCAA’s multibillion-dollar business and finally can be compensated in an equitable and just manner for their extraordinary athletic talents.”
In 2021, the NCAA lifted its previous ban to allow student-athletes to make money off of their name, image and likeness (NIL), after the U.S. Supreme Court ruled that restrictions on student-athlete compensation are a violation of the Sherman Act, an antitrust law.
The new compensation model would permit but not require each school to set aside up to $21 million in revenue for athletes per year, the AP noted. Athletes across all sports would be eligible for payment and schools will be able to determine how to divide the funds among sports programs.
The deal, which still needs to be approved a federal judge, is in response to three antitrust suits that sued the NCAA for not providing compensation over NIL usage.
House v. the NCAA — the suit at the heart of the settlement — was slated to go to trial in January before settlement talks ramped up. The settlement reached this week is expected to cover two other antitrust cases against the NCAA and major conferences, the AP reported.
The controversy over NIL compensation has reared its head on Capitol Hill in recent years, with at least seven bills regarding a standard of rules for compensation having been introduced in the House or Senate since 2020. None have been successful.
Earlier this month, Republican Reps. Russell Fry (S.C.) and Barry Moore (Ala.) introduced The Protect the Ball Act, which would “provide new benefits for student-athletes, establish and enforce rules, and comply with the law without the constant risk of costly litigation.”
In addition to the NIL compensation suits, the NCAA separately faces lawsuits from states over some of the association's rules, including recruiting incentives and multi-time transfers.
Fry and Moore's proposed bill seeks to protect the NCAA from litigation and establish federal guardrails around athletes’ compensation for their NIL, recruitment and eligibility standards.
The Associated Press contributed reporting.