NCAA, leagues sign off on nearly $3 billion plan to set stage for dramatic change across college sports

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The NCAA and the nation's five biggest conferences have agreed to pay nearly $2.8 billion to settle a series of antitrust claims, a monumental decision that sets the stage for an innovative revenue-sharing model that could begin directing millions dollars directly to athletes as early as the fall semester of 2025.

The Pac-12 became the latest conference to approve the proposal Thursday when its college leaders voted in favor, according to a person with direct knowledge of the results.

Southeastern Conference presidents and chancellors unanimously approved the deal earlier Thursday, another person with knowledge of the decision told The Associated Press. Both spoke on condition of anonymity.

The Big Ten, Big 12 and Atlantic Coast Conference voted to approve earlier in the week ahead of a Thursday deadline given by the plaintiffs' attorneys.

NCAA President Charlie Baker and the commissioners of the five conferences released a joint statement Thursday evening recognizing the agreement, calling it “an important step in the ongoing reform of college sports that will provide benefits to student-athletes and will provide clarity in college athletics worldwide. divisions for years to come.”

“All of Division I made today's progress possible, and we all have work to do to implement the terms of the settlement as the legal process continues,” the statement said. “We look forward to working with our various student-athlete leadership groups to write the next chapter of college sports.”

The settlement must still be approved by the federal judge overseeing the case and challenges could emerge, but if the settlement stands, it will mark the beginning of a new era in college sports where athletes receive compensation more akin to that professionals and schools can compete for talent through direct use. payments

Details of the plan signal the end of the NCAA's core fan model that dates back to its founding in 1906. Indeed, the days of NCAA punishments for athletes driving booster-supplied cars began to fade three years ago years, when the organization lifted restrictions on supported endorsement deals. for the so-called name, image and likeness money.

Now it's not far-fetched to look to seasons where a star quarterback or top prospect on a college basketball team is not only getting big NIL offers, but has a $100,000 school payment in the bank for playing.

Many details remain to be determined, but the settlement calls for the NCAA and conferences to pay $2.77 billion over 10 years to more than 14,000 former and current college athletes who say the defunct rules prevented them from earning endorsement money . and 2016 sponsorship deals.

Some of that money will come from NCAA reserve funds and insurance, but while the lawsuit specifically targeted five conferences that include 69 schools (including Notre Dame), dozens of other NCAA member schools will see distributions smallest in the NCAA to cover the mammoth. payment

Schools in the Big Ten, Big 12, Atlantic Coast and Southeast conferences will end up shouldering the burden of the deal at a cost of about $300 million each over 10 years, most of which will be paid to athletes in the future

The Pac-12 is also part of the deal, with the 12 sharing responsibility even though Washington State and Oregon State will be the only remaining league members this fall after the other 10 marxin schools

Under the new compensation model, each school will be allowed, but not required, to set aside up to $21 million in revenue to share with athletes per year, though as revenue increases it could make the limit

Athletes in all sports would be eligible for the payments, and schools would have the freedom to decide how that money is distributed among athletic programs. Scholarship limits per sport will be replaced by roster restrictions.

It is unknown whether the new compensation model is subject to the Title IX gender equity law and whether schools will be able to bring NIL activities in-house as they hope and squeeze the booster groups that have emerged in recent years . pay athletes Both issues could lead to more lawsuits.

The federal class-action lawsuit at the center of the settlement, House v. NCAA, was set to go to trial in January. The complaint, filed by former Arizona State swimmer Grant House and Sedona Prince, a former Oregon and current TCU basketball player, said the NCAA, along with the five richest conferences, improperly prohibited athletes from earning money from endorsements.

The lawsuit also argued that the athletes were entitled to a share of the billions of dollars the NCAA and those conferences earn from media rights deals with television networks.

Amid political and public pressure, and facing the prospect of another lawsuit that some in college sports said could reach $20 billion in damages, NCAA and conference officials acknowledged what has been for a long time the main principal of the company: that schools do not directly. pay athletes to play beyond a scholarship.

This principle had already been affected numerous times during the last decade.

Notably, the Supreme Court unanimously ruled against the NCAA in 2021 in a case involving education-related benefits. The narrow focus of the Alston case did not collapse the collegiate sports system, but the NCAA's strong disapproval of the fan model opened the door for more lawsuits. Judge Brett Kavanaugh, a former Yale athlete, put it bluntly: “The bottom line is that the NCAA and its member colleges are suppressing the pay of student athletes who collectively generate billions of dollars in revenue for universities every year.”

The settlement is expected to cover two other antitrust cases facing the NCAA and major conferences challenging athlete compensation rules. Hubbard v. NCAA and Carter v. NCAA are also currently before the judges of the Northern District of California.

A fourth case, Fontenot vs. NCAA, creates a potential complication as it remains in a Colorado court after a judge denied a request to combine it with Carter. It's unknown if Fontenot is part of the settlement and it's important because the NCAA and its conferences don't want to be on the hook for more damages if they lose in court.

“We will continue to litigate our case in Colorado and hope to hear about the terms of a proposed settlement once they have been released and come before a court,” said George Zelcs, an attorney for the plaintiffs in Fontenot. .

The settlement agreed to in the agreement is a milestone, but not surprising. College sports have been trending in this direction for years, with athletes receiving more and more of the monetary benefits and rights they say they should have expected.

In December, Baker, the former Massachusetts governor who has been on the job for 14 months, proposed creating a new tier of Division I athletics where the wealthiest schools would have to pay at least half of their 30,000 athletes annual dollars. This suggestion, along with many other possibilities, remains under discussion.

The deal doesn't make all the problems facing college sports go away. There is still the question of whether athletes should be considered employees of their schools, something Baker and other college athletic leaders are fighting against.

Some form of federal legislation or antitrust exemption is likely still needed to codify the terms of the deal, protect the NCAA from future litigation and avoid state laws that try to neutralize the organization's authority. As it stands, the NCAA still faces lawsuits challenging its ability to govern itself, including establishing rules limiting multiple transfers.

Federal lawmakers have indicated they'd like to do something, but while several bills have been introduced, none have gone anywhere.

Despite the unanswered questions, one thing is clear: Major college athletics are poised to become professional sports more than ever before.



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