The NCAA and the Power Five conferences agreed on Friday to pay over $2.7 billion to settle antitrust claims that will inevitably overhaul the landscape of college athletics.
The decision creates a revenue-sharing model that will include athletes, who could be earmarked for millions of dollars as early as the fall of 2025. The schools will decide how that money is divided among its athletic programs.
One of the biggest changes is that roster restrictions will replace scholarship limits by sport. While the athletes are the big winners with the decision, athletic directors and coaches have to adjust to the new rules and make decisions as they learn more about the process and how they will restructure their teams across all sports.
Ultimately, this means college athletics will come closer to becoming professional sports where much more money is at stake for the athletes.
The leaders of the Power 5 conferences—the ACC, Big Ten, Big 12, Pac-12, and SEC—understood that paying college athletes was inevitable.
U.S. District Judge Claudia Wilken must still approve the settlement.
“The five autonomy conferences and the NCAA agreeing to settlement terms is an important step in the continuing reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics across all divisions for years to come,” NCAA President Charlie Baker, ACC Commissioner Jim Phillips, Ph.D., Big Ten Commissioner Tony Petitti, Big 12 Commissioner Brett Yormark, Pac-12 Commissioner Teresa Gould, SEC Commissioner Greg Sankey said in a joint statement. “This settlement is also a road map for college sports leaders and Congress to ensure this uniquely American institution can continue to provide unmatched opportunity for millions of students.”
Any athlete who played a Division I sport from 2016 through the present day has a claim to the settlement money, some of which will also go to the plaintiffs’ attorneys for representation. The damages represent the funds the athletes could have earned through NIL deals if the NCAA’s rules had not restricted them in previous years.
There is a question of how coaches so used to the old model will be able to adapt to these new changes. There have already been numerous complaints among high-profile leaders like former Alabama football coach Nick Saban about how the NIL has negatively impacted college athletics. This new model creates a whole new set of challenges.
“All the things that I believed in, for all these years, 50 years of coaching, no longer exist in college athletics,” Saban told Congress earlier this year. “It was always about developing players, it was always about helping people be more successful in life.”
It’s still unclear whether the settlement funds will distributed equally among the entire class of plaintiffs or be assigned different values based on an athlete’s probable earning power during their career.
There are also several other questions with the latest settlement. For example, will college athletes now be considered employees of their representative school, which would also potentially give them access to health benefits or retirement plans?
There is also the question of whether roster caps will replace traditional scholarship limits. Division I football is limited to 85 scholarships, but some programs have nearly 140 players participating on the team. Any limits on scholarships could be viewed as more collusion on spending.
The roster caps could mean more scholarships but smaller roster sizes, which would also minimize the viability of walk-on athletes because there are limited funds to go around.
“All of Division I made today’s progress possible, and we all have work to do to implement the terms of the agreement as the legal process continues,” Mr. Baker said in the statement with the Power 5 conference leaders. “We look forward to working with our various student-athlete leadership groups to write the next chapter of college sports.”
In addition to the latest landmark settlement, other proposals are still on the table.
Lawmakers and college officials are still discussing a plan by Mr. Baker to create a new layer of Division I college athletics where the schools with the most resources would be required to pay at least half their athletes $30,000 per year.
