NCAA, power conferences approve settlement that makes way for players to be directly paid

The NCAA and its five power conferences have agreed to a multibillion-dollar settlement to resolve three antitrust lawsuits. This move could lead to a significant change in the college sports business model by allowing schools to pay athletes.

As part of the settlement, the NCAA will pay over $2.75 billion to former Division I athletes. Additionally, there will be a revenue-sharing model between power-conference schools and athletes. This model, which could start as early as next year, would involve distributing 22 percent of the schools’ average annual revenue (expected to be over $20 million per school) directly to athletes.

The damages for D-I athletes, going back to 2016, will be in the form of back-pay for lost name, image, and likeness (NIL) earning opportunities. These payments will be spread over 10 years using NCAA reserve funds and reductions in future revenue distributions to conferences.

The next step is to present the settlement to Judge Claudia Wilken of the U.S. District Court for preliminary approval, which is anticipated within the next 30-45 days. If finalized, the settlement, which will take several months to complete, would represent a significant change to the amateurism structure in college sports.

The NCAA Board of Governors, the highest governing body of the organization, voted on behalf of the NCAA. The Power 5 conferences, listed as defendants in the case, voted individually to approve the settlement terms. This agreement is seen as a crucial step in reforming college sports for the benefit of student-athletes and providing clarity across all divisions of college athletics for years to come.