NCAA, leagues sign off on nearly $3 billion plan to set stage for dramatic change across college sports

The NCAA and the nation’s five major conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims, a massive decision that paves the way for a groundbreaking revenue-sharing model that could begin funneling millions of dollars directly to athletes as soon as maybe. Fall semester 2025.

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

Southeastern Conference presidents and chancellors unanimously approved the deal earlier Thursday, another person familiar with that decision told The Associated Press. Both spoke on condition of anonymity.

The Big Ten, Big 12 and Atlantic Coast Conference voted to approve earlier in the week before a deadline set by plaintiffs’ attorneys on Thursday.

NCAA President Charlie Baker and the commissioners of the five conferences issued a joint statement Thursday evening acknowledging the settlement, calling it “an important step in the ongoing reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics around the world.” divisions for years to come.”

“You made possible the first part of the progress achieved today, and we all have work to do to implement the terms of the agreement while the legal process continues,” the statement read. “We look forward to working with our various student-athlete leadership groups to write the next chapter of college sports.”

The deal must still be approved by the federal judge overseeing the case, and challenges could arise, but if the agreement stands, it will mark the beginning of a new era in college sports where athletes are compensated like professionals and schools can compete for talent using direct funds. Payments.

Details in the plan signal the end of the NCAA’s primary amateur model, which dates back to its founding in 1906. In fact, the days of the NCAA sanctioning athletes who drive boosted cars began to fade three years ago When the organization lifted restrictions on sponsored endorsement deals. With what is called money by name, image and likeness.

Now it’s not far-fetched to look forward to seasons in which a star quarterback or top prospect on a college basketball team not only shells out big money on nothing deals, but has a $100,000 school deposit in the bank to play for.

There are a host of details yet to be ironed out, but 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 say the now-expired rules prevented them from making money from endorsements. And sponsorship deals dating back to 2016.

Some of that money will come from the NCAA’s reserve and insurance funds, but although the lawsuit specifically targeted five conferences made up of 69 schools (including Notre Dame), dozens of other NCAA member schools will see Smaller handouts than the NCAA to cover the Mammoth. He will spend.

Schools in the Big Ten, Big 12, Atlantic Coast and Southeastern conferences will bear the brunt of the settlement at a cost of about $300 million each over 10 years, most of which will be paid to future athletes.

The Pac-12 is also part of the settlement, with all 12 players sharing responsibility even though Washington State and Oregon State will be the only two remaining members of the league by this fall after the other 10 schools leave.

In the new compensation model, each school would be allowed, but not required, to set aside up to $21 million in revenue to share with athletes annually, though revenue would also rise.

Athletes in all sports will be eligible for payments, and schools will be given freedom to decide how to divide those funds among athletic programs. Scholarship limits by sport will be replaced by roster restrictions.

Whether the new compensation model will be subject to Title IX gender equity law, along with whether schools will be able to bring NIL activities in-house as they hope and put pressure on the booster-run cooperatives that have sprung up in the past few years to pay athletes remains to be seen. Both topics could lead to more lawsuits.

The federal class action lawsuit at the center of the settlement, House v. 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 State basketball player and current TCU player, said the NCAA, along with the five richest conferences, improperly barred athletes from earning endorsement money.

The lawsuit also made clear that athletes are entitled to a portion of the billions of dollars the NCAA and those conferences earn from media rights agreements with television networks.

Amid political and public pressure, and facing the prospect of another court loss that some in college sports claimed could amount to $20 billion in damages, NCAA and conference officials acknowledged what had long been a fundamental tenet of the project: that schools do not directly pay athletes to play outside Scope of the scholarship.

This principle has been violated several times over the past decade.

Notably, the Supreme Court unanimously ruled against the NCAA in 2021 in a case involving education-related benefits. The narrow focus of the Alston case did not lead to the collapse of the collegiate sports system, but the forceful rebuke of the NCAA’s amateur model opened the door to more lawsuits. “The bottom line is that the NCAA and its member colleges suppress the wages of student-athletes who collectively generate billions of dollars in revenue for colleges every year,” Justice Brett Kavanaugh, a former Yale University athlete, put it bluntly.

The settlement is expected to cover two other antitrust cases facing the NCAA and major conferences that challenge athlete compensation rules. Hubbard v. NCAA and Carter v. NCAA are also currently before judges in the Northern District of California.

The fourth case, Fontenot vs. NCAA, creates a potential complication because it remains in a Colorado court after a judge denied a request to consolidate it with Carter’s. It is not known whether or not Fontenot is part of the settlement, which is important because the NCAA and its conferences do not want to be on the hook for more damages if they lose in court.

“We will continue to litigate our case in Colorado and look forward to hearing the terms of the settlement proposal once they are actually released and brought before the court,” said George Zilks, attorney for the plaintiffs at Fontenot. .

The solution agreed upon in the settlement is historic, but it is not surprising. College sports have been trending in this direction for years, with athletes receiving more and more benefits and financial rights that they say are long overdue.

In December, Baker, the former Massachusetts governor who was in office for 14 months, proposed creating a new Division I athletics bracket, in which schools with the most resources would be required to pay at least half of their athletes $30,000. annually. This proposal, along with many other possibilities, is still under discussion.

The settlement does not make every issue facing college sports go away. There remains the question of whether athletes should be considered employees of their schools, something Baker and other college sports leaders are fighting.

Some type of federal legislation or antitrust exemption would likely be needed to codify the terms of the settlement, protecting the NCAA from future litigation and preemptive state laws that attempt to neutralize the organization’s power. Currently, the NCAA still faces lawsuits challenging its ability to govern itself, including setting rules that limit transfers multiple times.

Federal lawmakers have indicated they want to get something done, but although several bills have been introduced, none have gone anywhere.

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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