NCAA Settlement Paves Way for College Athletes to Receive Financial Compensation

Thousands of former college athletes will be eligible to receive payments ranging from a few dollars to over a million under the $2.78 billion antitrust settlement agreed to by the NCAA and five power conferences. The deal also sets the stage for schools to directly compensate athletes while attempting to regulate payments from boosters. The agreement, which was filed in federal court in the Northern District of California, paves the way for athletes to share in the billions of dollars generated by their colleges, conferences, and the NCAA. This seismic change in college sports follows over four years of hard-fought victories in the case.

Key Takeaways:

• The settlement provides for damages to be paid out over 10 years, with a total of approximately $3 billion being distributed to plaintiffs.
• The majority of damages is expected to go to football and basketball players from power conferences, as those leagues and teams generate the most revenue from billion-dollar media rights contracts.
• Athletes will be eligible to receive damages based on the sport they played, the conference they were in, and the length of their eligibility.
• The agreement includes guidelines for schools to compensate athletes, including the creation of an audit system to monitor athletic revenue and ensure compliance.
• Schools will be permitted to determine how to distribute the new financial benefits among sports, but must comply with Title IX gender equity rules.
• The NCAA and conferences have agreed to amend their rules to permit a landmark compensation system that allows schools to share up to about $21 million in athletic revenues with their athletes annually, starting in 2025.
• Partial scholarships will be permitted in all sports, and roster caps for baseball (34), softball (25), and volleyball (18) will allow for significant jumps in the number of scholarships schools can provide in those sports.
• A new voluntary reporting system for deals that surpass $600 is scheduled to start next month, which will include an arbitration process to determine if deals are for a "valid business purpose."
• Violations of the new rules could lead to eligibility penalties for athletes and sanctions for schools.

Statistics:

• Total settlement amount: $2.78 billion
• Damages to be paid out over 10 years: Approximately $3 billion
• Average payout for power conference football players and men's basketball players: $91,000
• Range of payouts for broadcast name, image, and likeness: $15,000 to $280,000
• Payouts for lost opportunities to earn NIL money and pay-for-play: tens of thousands of dollars
• Number of eligible athletes: approximately 19,000 power conference football and men's basketball players
• Number of athletes projected to receive payments: hundreds of thousands

Sources:

• Ralph D. Russo, AP College Sports Writer
• Northern District of California federal court filing
• NCAA settlement agreement
• Plaintiffs' attorneys' statements