$2.8 Billion Settlement Finalized for University Athletes

A federal judge is set to finalize a $2.8 billion settlement on Friday, paving the way for universities to make direct payments to athletes. Judge Claudia Wilken has given her approval for this settlement, which allows schools to initiate payments next month.

The terms of the settlement include universities sharing up to $20 million with athletes over the coming year. Additionally, approximately $2.7 billion will be distributed to thousands of former players who missed out on earnings for many years. This payout will occur over the next decade.

Payments to individual athletes will vary based on their duration in sports. For instance, most male basketball players can expect around $135,000 each. Interestingly, the law firm involved mentioned that some payments could reach as high as nearly $2 million due to “lost opportunities.”

This settlement follows a lawsuit initiated five years ago by Arizona swimmer Grant House, who aimed to challenge revenue-sharing restrictions imposed by the NCAA. Judge Wilken’s approval encompasses three antitrust cases that contested NCAA compensation rules established since 2016. The plaintiffs argued that these regulations prevented thousands of athletes from capitalizing on their names, images, and likenesses.

Back in 2021, the NCAA lifted its ban on athletes monetizing their names and endorsements, reflecting a significant shift in college sports. At one point, former President Donald Trump even considered an executive order regarding athlete compensation after discussions with renowned Alabama football coach Nick Saban.

There’s a lingering call for Congress to intervene to create a more equitable environment within collegiate athletics, ensuring that the financial landscape doesn’t favor just a few top earners but supports all players.

Among the provisions, there’s an intention for a clearinghouse to regulate transactions and prevent payments from exceeding fair market value, aiming for fairness across the board.