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NCAA’s $2.8B Settlement Paves The Way For Revenue Sharing With Athletes

Michigan head coach Jim Harbaugh and quarterback J.J. McCarthy celebrate with the trophy after their win against Washington in the national championship NCAA College Football Playoff game Monday, Jan. 8, 2024, in Houston. (AP Photo/David J. Phillip)

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.”

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