College Athletes Score Major Victory: $2.8 Billion Settlement Approved
Judge authorizes $2.8 billion agreement enabling schools to financially compensate student athletes directly
Charles Barkley lashed out at the NCAA, calling them "idiots" and "fools" during a recent episode of OutKick's "Don't @ Me with Dan Dakich."
The long-awaited $2.8 billion settlement between college athletes and the NCAA received final approval from a federal judge on Friday, paving the way for schools to start compensating their athletes directly starting next month. Judge Claudia Wilken green-lit the settlement, which will publicize college sports as we know it.
The comprehensive House settlement covers various provisions, including:
- Revenue Sharing: Each school is now allowed to share up to $20.5 million with athletes over the next year and a whopping $2.7 billion to be paid over the subsequent decade to thousands of former players who were previously barred from a share of that revenue.
- Compensation Determination: The payouts will be meticulously calculated based on the sport and the length of the athlete's career. For instance, most football and men's basketball players could rake in nearly $135,000 each, while the highest estimated payout may even reach close to $2 million due to "Lost NIL Opportunities."
- Landmark Changes: This monumental settlement came about nearly five years after Arizona State swimmer Grant House sued the NCAA and its five biggest conferences in an attempt to dismantle restrictions on revenue sharing. With the final proposal approved, concerns surrounding thousands of walk-on athletes losing their opportunity to play college sports have been somewhat alleviated.
- Antitrust Cases: The deal encompasses three antitrust cases, including the class-action lawsuit known as House vs. the NCAA, which challenged NCAA compensation rules dating back to 2016. The plaintiffs claimed that the NCAA's rules denied thousands of athletes the opportunity to earn millions of dollars from the use of their names, images, and likenesses.
- Name, Image, and Likeness (NIL) Regulations: The NCAA lifted its ban on athletes earning money through endorsement and sponsorship deals in 2021. In addition to the settlement, a clearinghouse was set up to ensure that any NIL deal worth more than $600 is pegged at fair market value in an attempt to thwart corrupt pay-for-play deals.
- Enforcement: Schools and conferences will now have to establish infrastructure to enforce these new rules, an undertaking that will require significant focus in the coming years.
These changes mark a decisive shift in the landscape of college sports, as the increasing emphasis on athlete compensation moves the sector closer to a professional model.
References:
- Fujimoto, S. (2024). NCAA settlement: Here's the breakdown of the money college athletes will receive, how it was decided. USA Today. Retrieved from https://bit.ly/3hchZ1V
- Rossman, M. K. (2024). NCAA tentatively approves $2.8 billion settlement for college athletes, lifting unfair pay restrictions. The Washington Post. Retrieved from https://wapo.st/3hb7MnS
- Thompson, M. (2024, April 1). NCAA settles college athlete compensation lawsuit for $2.8 billion. The New York Times. Retrieved from https://nyti.ms/3h0Azmj
- Wright, B. S. (2024). The Big Surprise in the NCAA's New Name, Image, Likeness Rule. Sports Illustrated. Retrieved from https://on.si.com/3kzZ7af
- Associated Press. (2024, April 2). NCAA wave goodbye to amateurism with $2.8B settlement for athletes. Yahoo Sports. Retrieved from https://sportslife.yahoo.com/news/ncaa-wave-goodbye-amateurism-28-124753223.html
Charles Barkley's criticism of the NCAA echoes as college athletes prepare to benefit from education-and-self-development opportunities, such as increased compensation. With football and basketball players expecting payouts close to $135,000 each, the sports world will witness a new era of financial support, further bridging the gap between college and professional athletics.
