Power 5 schools agree to NCAA antitrust settlement and revenue sharing

University athletics has not been an amateur sport for years, but as of Thursday it became a purely professional sport.

The Pac-12 was the last of the Power 5 conferences to approve a more than $2.7 billion settlement over 20 years by the NCAA for current and former athletes to resolve three federal antitrust lawsuits against the body that governs college sports.

Power 5 schools have also reportedly agreed to a revenue-sharing system in which each school allocates as much as $20 million a year to pay athletes. The revenue-sharing agreement is scheduled to enter into force in autumn 2025.

Schools reportedly won’t have to pay the full $20 million, but anything less than that appears to create a clear competitive disadvantage in the admissions process.

ESPN reports on the settlement in this story, and Jon Wilner of the Mercury News provides further insight in his report.

Wilner also provided this important detail:

“The settlement will also force schools to increase roster sizes in certain sports, which is widely expected to increase annual spending by approximately $10 million, potentially increasing the overall cost House over $30 million.”

Cal provided the following statement from the office of Dan Mogulof, associate vice chancellor for executive communications:

“Today’s agreement brings some clarity to a very complex and uncertain situation. Given the likelihood of this outcome, analytical work is already underway to provide the campus and Cal Athletics with an assessment of the effects and consequences of the agreement. We will keep the Cal community updated on any decisions that may have a significant impact on our student-athletes, our intercollegiate athletics program and our university.”

The news appears to put Cal athletics at a crossroads as the school prepares to leave the Pac-12 Conference and enter the Atlantic Coast Conference this summer.

Here are some questions facing the Golden Bears:

— First of all, can Cal athletics afford to compete in this type of atmosphere? Cal now faces higher travel costs for its teams and will receive just a 30 percent share of television revenue from the ACC for the first seven years.

— Will the school feel the need to cut back on sports – always a touchy subject – to make ends meet? Is this even enough?

— What will be the response and potential solution proposed by new Chancellor Rich Lyons?

— Is it possible that Cal will decide it can’t compete financially and, as a result, cut back on athletics and start participating at a different level?

There are few details about how this will work, even for schools where Cal isn’t in serious financial trouble.

For example, how do federal Title IX regulations impact this move toward full professionalism?

Is there a legal way for schools to pay football and men’s basketball players but not offer the same financial benefits to athletes and those involved in nonprofit sports?