NCAA Board Approves Antitrust Settlement Aimed at Ending Amateurism

The NCAA Board of Governors voted Wednesday night to accept the terms of a settlement that, if it becomes a final agreement approved by U.S. District Judge Claudia Wilken and if it withstands potential legal challenges, will resolve antitrust disputes in which college athletes say they are owed compensation for the money they may have earned from video games and broadcasting, as well as through their name, image and likeness.

Earlier this week, the ACC, Big 12 and Big Ten voted to approve the settlement terms sheet. That still leaves the SEC and Pac-12, which are expected to vote and approve the draft on Thursday.

How Sportico details, the settlement value is approximately $2.7 billion and takes into account that athletes will receive different levels of compensation. In the future, conferences will be able to share revenues with athletes. Many of the details of the settlement will need to be ironed out in the coming months before it receives court approval.

The vote of the board, the NCAA’s highest governing body, has both symbolic and legal significance.

Symbolically, it shows that the NCAA has approved an agreement that will end any appearance of “amateurism,” which broadly refers to NCAA rules that distinguish college athletes as amateurs by denying them the opportunity to receive compensation. If the settlement is ultimately finalized, approved by the court and implemented, some college athletes will receive compensation. To the extent that “amateur” means “an athlete who is not paid,” that ends with college sports.

It will be a dramatic change for the NCAA, which decades ago adopted amateurism rules and the “student-athlete” moniker, in part to defeat litigation in which athletes sought compensation, including through workers’ compensation insurance. In its handbook, the NCAA insists that college athletes’ participation “should be motivated primarily by education and the physical, mental and social benefits that can be derived from it” and that colleges must protect these athletes “from exploitation by professional and commercial enterprises.”

The NCAA also embraces this fundamental change 40 years after it was written by U.S. Supreme Court Justice John Paul Stevens NCAA v. Board of Regents “The NCAA plays a critical role in maintaining the respected tradition of amateurism in college sports.” He added: “There is no question that (the NCAA) needs a lot of freedom to play that role.”

The NCAA later relied on this “geographic freedom” to its detriment.

When former UCLA basketball star Ed O’Bannon sued over basketball players’ likenesses appearing in video games without the players’ consent or payment, the NCAA insisted there was no amateurism misconduct. Federal district and appeals courts disagreed, giving lawmakers the ability to enforce and pass name, image and likeness laws ensuring college athletes can exercise a right they already have as Americans – the right of publicity – without violating NCAA rules.

When former West Virginia running back Shawne Alston sued universities over the NCAA’s restrictions on reimbursing athletes for educational expenses, the NCAA once again invoked amateurism in its defense. And once again, the NCAA lost, setting the table for recent antitrust challenges to NCAA regulations regarding NIL collectives and the transfer portal.

Instead of potentially losing in court again, the NCAA is now making a deal, but with it comes the end of an era. For coaches earning millions of dollars a year and other beneficiaries of a multibillion-dollar industry, college sports have already become professional. Now athletes, some of whom benefit from sports scholarships, will gain more direct participation.

For NCAA President Charlie Baker, who took the job last year, the settlement will likely be a defining moment in his young tenure. As a popular Republican governor of Massachusetts with a Democratic leaning, Baker was considered pragmatic and even-handed. The settlement is thematically similar: Baker calculates that setting and changing rules is less risky than arguing in court over unpopular restrictions. How Sportico explained Wednesday, the NCAA may have prevailed in the antitrust case, but Baker is taking no chances in a case where the NCAA says potential damages could exceed $4 billion.

The board’s vote, which ESPN said was not unanimous, may also take on legal significance. Member schools and conferences that oppose the new world order in college sports, including one in which they foot part of the bill, can sue the NCAA and seek a restraining order to block the settlement. They could argue that the settlement voting process was non-negotiated, was rushed and haphazard, deprived dissenters of a credible chance to express their views, and went beyond the council’s rules. Now that the board had voted, the legal controversy was ripe. The NCAA objects to its members contractually accepting the association’s authority to make legal decisions.

The committee’s voice could also come to light in potential lawsuits brought by athletes. Because the terms of the settlement were not negotiated with the players’ union, the NCAA’s new rules capping athlete salaries (like a de facto salary cap) could be subject to potential antitrust scrutiny. Athletes can also challenge the new rules as violating Title IX if they result in colleges paying male athletes more than female athletes. While conferences have not been found liable under Title IX, mechanisms for compensating athletes will be examined.