Landmark settlement forces NCAA schools to pay players

Since its inception, the NCAA has operated under a business model that has defined a college athlete as an amateur. Over the years, as college sports evolved into a mega-enterprise, lawsuits and labor actions challenged this model, which came to be increasingly seen as exploitative in big-money sports like football and men’s basketball.

But the NCAA’s $2.8 billion settlement Thursday night as part of an antitrust class action lawsuit represents the hardest — and perhaps decisive — blow to the system.

If approved by a U.S. district judge in California, the settlement would create the first revenue-sharing plan for college athletics, a landmark change in which schools would directly pay their athletes to play.

However, according to critics, this radical change also raises questions. These include whether women would be paid fairly, whether smaller conferences would bear a disproportionate burden of the settlement and whether this framework would in any way limit the power of collectives – endowment-funded groups that encourage players for a fee to play hopscotch from school to school.

“This is a historic agreement that is simultaneously flawed,” said Michael H. LeRoy, a law professor at the University of Illinois. “The idea that schools pay millions of dollars to people who sell TV contracts and fill seats is a good one. But it closes one Pandora’s box and opens four or five others.

In recent years, college athletes have already made significant progress in earning the right to earn money from their performances. Three years ago, for the first time, they were legally allowed to independently promote their name, image and likeness. In March, the Dartmouth men’s basketball team voted to unionize after a federal official ruled that the players were employees of the school. Many college administrators viewed Thursday’s settlement in House v. NCAA as an inevitable conclusion.

The lawsuit is named after former Arizona State swimmer Grant House, the plaintiff.

In settling the case, the NCAA sought to avoid a disastrous ruling and fend off the constant drumbeat of antitrust lawsuits that hamper the organization’s ability to make even the most basic rules.

If the lawsuit went to trial, the NCAA and the major conferences named as co-defendants — the Big Ten, Southeastern, Atlantic Coast, Big 12 and Pac-12 — would fear the potential price tag would exceed $4 billion.

By reaching the settlement, the NCAA is also sending a signal to Congress – which has been reluctant to intervene in the organization’s governance – that the association’s request for antitrust relief is a necessary aid, not a rescue.

“The settlement, while undesirable in many respects and promising only temporary stability, is necessary to avoid bankruptcy of college athletics,” the Rev. John I. Jenkins, president of the University of Notre Dame, said in a statement. He called on Congress to preempt a patchwork of state laws, establish that athletes are not employees and, excluding antitrust laws, give schools greater freedom to set rules.

But the uncertainty over antitrust protection was highlighted Thursday when a judge in Colorado rejected the NCAA’s request to move another antitrust case, Fontenot v. NCAA, to the same court that will decide Thursday’s settlement.

“I’m not downplaying the fact that the settlement is a good thing,” said Julie Roe Lach, commissioner of the Horizon League; its men’s basketball champion, Oakland, upset Kentucky in the NCAA Tournament. “We needed a certain level of stability, but that doesn’t turn everything upside down. In my opinion, this was a rushed and non-inclusive process, which is concerning when we are talking about a multi-billion dollar decision.”