The NCAA and its five powerhouse conference leagues on Thursday reached a landmark settlement worth roughly $2.8 billion that will likely launch a groundbreaking revenue-sharing model in the fall of 2025 under which college athletes will be paid directly by their schools for the first time.
In this Q&A, Post reporter Zach Braziller analyzes the demise of the governing body’s amateur model and what the future holds.
Q: Wait, so now college athletes can get paid? Why did the NCAA agree to this?
A: They had no choice. Facing huge losses in three antitrust lawsuits, the settlement was expected to reach nearly $2.8 billion. And starting in the fall of 2025, players are expected to receive revenue-sharing payments of about $20 million per year directly from their schools. That amount could grow over time, depending on whether more lucrative TV deals are struck. The nearly $2.8 billion will be used to settle about 14,000 claims by former and current players dating back to 2016. ESPN reported that the money will be divided among the players based on a formula created by sports economists.
Q: What else needs to happen before this is official?
A: The settlement must be approved by Judge Claudia Wilken in California. Although there may be obstacles, approval is expected within the next few months.
Q: What’s the next domino to fall?
A: Keep an eye on Congress. The NCAA wants federal legislation that would give it limited antitrust exemptions to set rules on player compensation and transfers, and a declaration that college athletes aren’t employees. Otherwise, governing bodies will remain powerless in this new professional model. There’s optimism that the settlement has built trust with elected officials.
Q: How will schools share revenue?
A: That’s up to each school based on the terms of the settlement. It’s up to each school how they spend the roughly $20 million, how much of that allocation they pay their players, which players they pay, and how much they give to individuals. It doesn’t have to be split equally, but Title IX is not part of the agreement. Title IX is a federal law that requires schools to provide equal opportunities for male and female athletes. That’s another issue that can be resolved in court.
Q: What does this mean for low-revenue sports?
A: It depends on the school, but common sense would dictate that football and basketball, which are the most lucrative sports, take priority. One major conference executive predicted “major disruptions” to Olympic sports.
Q: What does this mean for the future of small school athletic programs?
A: It will further widen the divide between the haves and have-nots, between conferences with lucrative TV rights and those that don’t. Smaller leagues are already used as a feeder system to the bigger leagues thanks to the NIL, and this will only widen that divide.
Q: How does this affect NIL payments?
A: NIL is not going away. However, associations may become less important going forward. The settlement includes a reporting mechanism that requires reporting of NIL transactions with third parties that are not part of the revenue sharing benefits that players receive. The transactions must be at “fair market value,” which will be defined at a later date. But this could also be a way for schools and boosters to pay players more than $20 million. There is also talk of a new enforcement agency being created to oversee the NIL market once the settlement goes into effect. By keeping associations, schools can get around the revenue sharing cap and get an advantage in recruiting players.
Q: Where will the settlement money come from?
A: Part of the settlement will come from NCAA reserve funds and insurance. The five best conferences are specifically named in the lawsuit, but other NCAA member schools will also be part of the payment. The NCAA will reportedly pay $1.1 billion. Of that, the top five conferences will pay about $1.65 billion, and the other 27 Division I conferences will pay $990 million over the next 10 years through profits shared from the men’s basketball NCAA tournament.
