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NCAA, Power Five approve bombshell $2.8 billion settlement

The NCAA and the nation’s top five conferences agreed to pay roughly $2.8 billion to settle multiple antitrust lawsuits, a landmark decision that could lay the groundwork for a groundbreaking revenue-sharing model that could result in millions of dollars being paid directly to athletes starting as early as the fall semester of 2025.

The agreement must be approved by the federal judge overseeing the case and could be challenged, but if it goes through, it would usher in a new era in college sports in which players will be compensated more like professional players and schools will be able to use direct payments to attract talent.

“There’s no question about it. This is a big leap,” said Rep. Tom McMillen, a former Maryland basketball player and congressman who has led a group of college athletic directors for the past year.

The NCAA approved a major settlement. AP

When university leaders voted to approve the plan on Thursday, the Pac-12 Conference was the last conference to vote to approve it, according to a person with direct knowledge of the decision.

Southeastern Conference school leaders unanimously approved the deal hours ago, according to a second person with knowledge of the decision.

Both men spoke to The Associated Press on condition of anonymity because a joint announcement by the Pac-12, SEC, Big Ten, Big 12, Atlantic Coast Conference and NCAA was still being prepared.

Both met a Thursday deadline set by plaintiffs’ lawyers.

The details of the plan would signal the end of the amateur model that has been the backbone of the NCAA since its founding in 1906.

In fact, the last time the NCAA would penalize players for driving cars provided by sponsors was three years ago when the organization Lifting sponsorship restrictions It is fuelled by what is called name, image and likeness money.

It’s not unrealistic these days to expect a college basketball team’s star quarterback or top prospect to have a season where he or she not only earns money on a big NIL contract, but also has $100,000 in their bank account to play for.

While many details remain to be finalized, the agreement calls for the NCAA and conferences to pay $2.77 billion over 10 years to more than 14,000 former and current college athletes who claim they were denied income from sponsorship and endorsement deals since 2016 because of the now-repealed rule.

“There was overwhelming legal pressure to get the NCAA, the conferences and the schools to agree that college athletes should be paid,” said Ramogi Huma, a former UCLA football player and longtime college athlete advocate, “and there’s no going back from there.”

“That’s really groundbreaking.”

The money will come in part from NCAA reserve funds and insurance, even though the lawsuit specifically targets five conferences that comprise 69 schools (including Notre Dame). Dozens of NCAA member schools The NCAA will provide a small share to cover the large payout.

Schools in the Big Ten, Big 12, Atlantic Coast and Southeastern Conferences will each pay about $300 million in settlement payments over 10 years, the bulk of which will be paid out to players in the future.

The settlement could bring about dramatic changes to college sports. AP

The Pac-12 is also part of the settlement, and all 12 schools will share the responsibility, although Washington State and Oregon State will be the only schools remaining in the league by this fall after 10 other schools dropped out.

Rewarding athletes

Under the new compensation model, schools would be allowed but not required to share up to $21 million in annual revenue with players, though any increase in revenue could lead to an increase in the cap.

Athletes in all sports would be eligible to receive the payments, and schools would be given the freedom to decide how to distribute the funds among their sports programs.

Sport-specific scholarship limits will be replaced with roster limits.

It’s unclear whether the new compensation model would fall under Title IX gender equality laws, and it’s unclear whether schools would be able to bring NIL activities in-house as they wish and eliminate the sponsorship groups that have proliferated in recent years as a way to compensate players.

Both issues could lead to further litigation.

Case

The federal class action lawsuit at the center of the settlement was: House of Representatives v. NCAA; The trial was scheduled for January.

The lawsuit, filed by former Arizona State University swimmer Grant House and former University of Oregon and now TCU basketball player Sedona Prince, alleges that the NCAA and the five deepest-pocketed conferences unfairly bar athletes from earning sponsorship money.

The lawsuit also argues that athletes are entitled to a share of the billions of dollars the NCAA and its conferences make in media rights deals with television networks.

Amid political and public pressure, and facing the possibility of new legal losses that some in college sports say could cost them as much as $20 billion in damages, NCAA and conference officials acknowledged what has long been a core principle of the business: schools do not pay athletes directly for playing, beyond their scholarships.

NCAA President Charlie Baker AP

This principle has already been violated many times over the past decade.

Notably, the Supreme Court unanimously Competing against the NCAA in 2021 Cases relating to education-related benefits.

Although the narrow focus of the Alston lawsuit did not destroy the college athletics system, its strong condemnation of the NCAA’s amateurist model opened the door for further litigation.

Justice Brett Kavanaugh, a former Yale athlete, put it bluntly: “At the end of the day, the NCAA and its member universities are suppressing student-athlete compensation, which collectively brings billions of dollars in revenue to universities each year.”

Other cases

The settlement is expected to also cover two other antitrust lawsuits challenging athlete compensation rules facing the NCAA and the major conferences: Hubbard v. NCAA and Carter v. NCAA, both of which are currently before a judge in the Northern District of California.

The fourth case, Fontenot v. NCAA, could remain complicated even after the justices hand down their ruling in a Colorado court filing. Request Denied Combine that with Carter.

It’s unclear whether Fontenot will be part of any settlement, but that’s an important issue because the NCAA and its conferences don’t want to be saddled with further damages if they lose in court.

“We will continue our litigation in Colorado and look forward to hearing the terms of the settlement once it is actually announced and filed in court,” said Fontenot plaintiffs’ attorney George Zerkes.

Reforming university sports

The solutions agreed to in the settlement are groundbreaking but not surprising.

College sports has been trending this way for years, with players getting more and more of the financial benefits and rights they long for, they say.

The SEC was among the conferences that agreed to the settlement. AP

NCAA president Charlie Baker, a former Massachusetts governor who took office for 14 months in December, Proposed the creation of a new tier for Division I athletics. The schools with the most endowments would be required to pay at least half of their players $30,000 a year.

That proposal, along with many other possibilities, is still under discussion.

The settlement doesn’t solve all of the problems facing college sports.

Athletes Deemed employee Their schools are a big part of Baker and other college sports leaders’ lives. Fighting.

Some sort of federal legislation or antitrust exemption would still likely be needed to codify the terms of the settlement, protect the NCAA from future lawsuits and preempt state laws that seek to cripple the organization’s power.

Just like that, The NCAA still faces lawsuits These include imposing rules limiting multiple transfers, which calls into question its ability to govern itself.

Federal lawmakers have indicated they want to get something done. Several bills have been introduced Nobody is going anywhere.

Despite the unanswered questions, one thing is clear: major college sports will look more like professional sports than ever before.

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