Paying college athletes is closer than ever. How could this work and what stands in the way?

A proposed settlement in a federal antitrust class action approved by the NCAA and major college conferences would cost billions and allow college athletes to get a share of the revenue that has gone to their schools for years.

The judge must still accept this proposal, which may also be challenged by individual plaintiffs, with many questions being raised about how it will work and whether it will withstand future legal scrutiny. But college sports clearly points to a revolutionary path in which some of the richest schools could pay athletes directly to participate.

House v. NCAA is a federal class action lawsuit seeking compensation for athletes who have been denied the opportunity to earn money from the use of their name, image or likeness (NIL) since 2016. The plaintiffs, including former Arizona State swimmer Grant House, filed the lawsuit in 2020 and also asked the court to rule that NIL damages should include billions of dollars in media rights fees that go to the NCAA and the five richest conferences ( Big Ten, Big 12, Pac-12, Atlantic Coast and Southeast), primarily for basketball.

The Big Ten, Big 12, ACC, SEC and Pac-12 presidential councils all voted this week to approve the settlement, as did the NCAA Board of Governors. The case’s lead lawyers include high-profile NCAA foes Steve Berman and Jeffrey Kessler, who have a track record of victories in compensation cases for college athletes. They will now work with their plaintiff clients on next steps with the judge.

The settlement requires the NCAA to pay nearly $2.8 billion in damages over 10 years, covered by insurance and withheld payments, that were to go to 352 Division I member schools. Last year, NCAA revenues totaled $1.3 billion, and the association anticipates continued growth in the coming years, mainly due to increases resulting from the television deal with CBS and Warner Bros. Discovery for the men’s basketball tournament. The new eight-year, $920 million deal with ESPN for the Division I women’s basketball tournament and other championship events will begin in 2025.

The potential settlement could cost each school in the remaining power conferences (ACC, Big 12, Big Ten, SEC) about $300 million a year over 10 years, including as much as $21 million a year to pay school athletes. Administrators warn it could lead to cuts in so-called non-revenue sports familiar to fans watching the Olympics.

“It would be the Olympic sports that would be at risk,” Alabama State athletic director Greg Byrne said during a March discussion on Capitol Hill. “They are men and women. If you look at the numbers for our team at the University of Alabama, where we play 19 sports outside of men’s basketball, we lost a total of almost $40 million.”

It’s reasonable to assume that payments would start with athletes in the sports that generate the most revenue: soccer and men’s basketball players. Next up will likely be women’s basketball, but athletes in all sports should expect some benefits – though probably not at all schools.

The proposal would allow schools to pay athletes, but would not require them to do so. Schools that don’t earn millions in TV revenue can bypass NIL contracts and rely on them, which are brokered in part by booster-backed collectives. Although how and whether these organizations will fit into the new system is unclear at best.

There are also questions about whether Title IX of the federal Gender Equality Act would require equal funding for male and female athletes.

Dealing with existing issues is just one step. To avoid similar legal challenges in the future, a new compensation system for college athletes would be needed; for example, anything that appears to be at the upper end of damages awarded by major conferences may be ripe for another lawsuit.

The NCAA has been asking Congress for some antitrust exemptions or federal legislation for years, but recently the focus has shifted from regulating NIL wages to preventing athletes from being considered employees.

The NLRB regional director’s ruling allowed members of the Dartmouth men’s basketball team to vote to join a union after being classified as employees, with many of them advocating collective bargaining as a solution to college sports’ exposure to antitrust violations. Resolving the “athlete-worker” issue could take years.

The House case is being heard in the Northern District of California by U.S. Judge Claudia Wilken, who has previously ruled against the NCAA in other landmark antitrust lawsuits. Wilken must approve the settlement, which is expected to cover at least two other antitrust lawsuits pending before the NCAA. Another lawsuit against the NCAA in Colorado remains separate but could ultimately be included in the settlement.

Meanwhile, schools will try to plan what revenue sharing might look like as college athletics continues its sharp shift from amateurism to a very different model.

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