Power conferences agree to historic settlement
In the spring of 2021, attorneys for the NCAA, appearing before the U.S. Supreme Court, argued vehemently against providing each college athlete with additional cash annually.
The amount: $5,980.
Three years later, in a landmark agreement that will transform the course of major college athletics, the organization left behind its archaic rules, shook off its long-time amateurism argument and thrust the industry into an era of direct athlete compensation.
The amount: more than $15 billion in new cash is expected to funnel to athletes over the duration of the 10-year agreement.
The NCAA and power conferences cast votes this week in support of settling three antitrust cases (House, Hubbard and Carter), approving terms that feature nearly $2.8 billion in back damages; a future athlete revenue-sharing model that will cost major conferences a cumulative $1 billion-plus annually; and other potential changes to the association’s governance, enforcement and scholarship structure.
While expected for weeks now, the vote is a historic moment, a groundbreaking and seismic shift for an organization that has, for decades, fought against direct athlete pay despite the billions earned from its major football and men’s basketball powers. The result of nine months of negotiations with plaintiff lawyers, NCAA president Charlie Baker and conference commissioners usher into the industry a new age that they hope brings stability to the current unruly recruiting landscape.
Caught in a purgatory between amateurism and professionalism, major college sports is springing forward — though not by its own volition. Begrudgingly forced into this semi-professional world by state laws and the court system, the industry still clings to a shred of amateurism, as the new model is expected to still prohibit pay-for-play and booster payments.
However, college leaders believe the agreement staves off future legal challenges, binds at least for another decade the power leagues with the NCAA, and brings more regulation to the recruiting environment.
“This would be the biggest change in the history of college sports. Period,” said Gabe Feldman, a sports law professor at Tulane and leading voice in NCAA litigation matters. “There have been significant changes and incremental changes. The NIL era has opened a lot of doors, but to have athletes share revenue with the schools would be not only monumental but would be contrary to what the NCAA has espoused for a century.”
All five power conference presidential boards — the Big Ten, SEC, Pac-12, Big 12 and ACC — voted in favor of the settlement this week. The Pac-12, despite its near dissolution, voted as originally structured. The league provided the final vote Thursday evening on a landmark day. On Tuesday, the ACC voted approval to the settlement.
However, a finalization of the settlement may not happen for many months. The agreement will need approval from a judge and is available for objections from individual plaintiffs — at least a five-month haul, according to experts.
However, within 14 months, at the start of the 2025 fall semester, the industry’s new model is expected to be implemented permitting schools — but not requiring them — to share revenue with athletes up to a certain quasi-salary cap.
The revenue-sharing deals with athletes will be classified as NIL agreements, with schools providing funds for the use and broadcast of a players’ name, image and likeness — a concept at the heart of the House case. Other non-NIL forms of payments are an option.
Though plenty of questions linger around this new system, institutions will be permitted to share with athletes as much as $22 million per year. That figure, still very much in flux, was derived from 22% of an average of power conference revenues. The cap includes exceptions as a combined $5 million in Alston-related money and additional scholarships can be counted toward the total.