In a groundbreaking move that could redefine the landscape of college athletics, the NCAA and the Power Five conferences have reached a monumental agreement, signaling a new era of compensation for student-athletes. The Power Five conferences, including the Big Ten, SEC, Pac-12, Big 12, and ACC, have unanimously voted to accept the general terms of the agreement put forth by the NCAA.
Under the terms of the agreement, each school within the Power Five conferences will be permitted to share 22% of their average annual revenue with college athletes. This provision is projected to result in significant payments, potentially exceeding $20 million per school annually. These payments, in addition to existing scholarships, third-party NIL (Name, Image, Likeness) payments, healthcare benefits, and other perks, mark a significant step towards equitable compensation for student-athletes.
As college revenues continue to soar, so too will the benefits and payments to athletes, as outlined in the settlement. Over the span of the 10-year agreement, the total value of payments and benefits allocated to college athletes is estimated to surpass $20 billion, making it one of the largest antitrust class-action settlements in history.
Steve Berman, managing partner and co-founder of Hagens Berman, lauded the settlement as a landmark moment that brings college sports into the 21st century. He emphasized that college athletes, who are the driving force behind the NCAA’s multibillion-dollar enterprise, will finally receive just compensation for their exceptional athletic talents.
Negotiated in collaboration with Winston & Strawn LLP, the agreement also addresses legal complexities surrounding antitrust violations. Division I athletes dating back to 2016 who wish to benefit from the settlement are barred from suing the NCAA for other antitrust violations, provided they drop any pending complaints related to specific cases such as House v. NCAA, Hubbard v. NCAA, or Carter v. NCAA.
However, the settlement marks only the beginning of a broader evolution in college sports. Legal issues surrounding athletes’ status as employees and the potential for unionization remain unresolved. Josh Whitman, chair of the NCAA’s Division I Council, acknowledges that there is still much to be clarified as the details of the agreement are finalized.
The settlement will undergo scrutiny in court, with Judge Claudia Wilken overseeing the process. While Wilken retains the authority to reject the terms, athletes also have the option to opt out and join other pending antitrust cases. With over 10,000 former and current athletes poised to benefit from the $2.7 billion in damages, meticulous measures are being devised to ensure fair distribution of funds, guided by input from sports economists and a series of formulas.
In essence, the NCAA’s agreement with the Power Five conferences marks a pivotal moment in the ongoing dialogue surrounding collegiate athlete compensation. It not only addresses longstanding grievances but also paves the way for a more equitable future in college sports. As the settlement sets a precedent for change, it underscores the potential for further transformations as the landscape of collegiate athletics continues to evolve.
