House v. NCAA settlement resolves antitrust lawsuits against NCAA

The NCAA Board of Governors voted to approve terms of a settlement that would resolve several antitrust lawsuits against the NCAA and require the organization to pay nearly $2.8 billion over 10 years to former Division I athletes and establish a model revenue-sharing mechanism between certain schools and athletes. Details of the settlement are still being negotiated. Once finalized, the agreement must be submitted to the court for approval.

One of the lawsuits House v. NCAAalleges that the NCAA and its “Power 5” athletic conferences violated antitrust laws by prohibiting athletes from receiving name, image and likeness (NIL) compensation before 2021 and by prohibiting the sharing of revenues arising from broadcasting and similar arrangements with athletes.

The NCAA faces serious risks if House the lawsuit goes to court. U.S. District Court Judge Claudia Wilken, who is presiding over the lawsuit, ruled against the NCAA in two major NIL-related cases. Federal antitrust law awards winning plaintiffs treble damages. The NCAA could be liable for damages as high as $20 billion (which some say could bankrupt the organization). A loss at trial could also result in the removal of all existing restrictions on NIL and revenue sharing in college athletics. The settlement would allow the NCAA to pay a smaller amount in damages while maintaining greater ability to regulate compensation for athletes.

Nearly $2.8 billion would represent back pay for former athletes who were unable to receive NIL compensation before the NCAA decided to lift the ban in 2021. Moreover, the settlement would create an optional revenue-sharing model through which conference schools would have the authority to distribute to their students – athletes receive up to $20 million a year.

The settlement approved by the NCAA provides for the payments to be funded primarily by reducing annual revenue payments to NCAA members and from NCAA reserve funds. The settlement is also expected to include reaffirming existing NCAA rules governing student-athlete compensation and creating an infrastructure to enforce those rules. The House the settlement would be a watershed moment for college athletics, whose landscape has experienced significant uncertainty as it transitions from an amateur sport to something resembling a professional sports model. While the NCAA’s $2.8 billion payment was the subject of many headlines, House The most important feature of the settlement may be a revenue-sharing agreement, which would be the first example of direct profit-sharing between universities and athletes.