NCAA Sports Agreement Set to Change College Sports

College sports executives and antitrust lawyers unveiled a sweeping deal Friday that would pay players billions of dollars in compensation, create an unprecedented athlete compensation model and put more pressure on Congress to protect one of higher education’s largest industries.

NCAA officials, the nation’s largest college sports programs and lawyers representing former athletes have submitted their proposed settlements to a federal judge in three antitrust lawsuits that seek limits on the pay and benefits that players can receive for their work, as well as on publicity rights.

If approved by U.S. District Court Judge Claudia Wilken after a legal investigation expected to last several months in her California court, the proposed settlement would change the rules governing the nation’s billion-dollar college sports industry.

“NCAA athletes have waited decades for this moment and are finally being fully compensated for their hard work,” Steve Berman, one of the athletes’ attorneys, said in a statement.

The deal, which comes after weeks of backroom negotiations, would allow schools to pay players a share of the revenue generated by major college sports programs. It would also pay nearly $2.8 billion in compensation for injuries to athletes over a 10-year period. It would eliminate limits on the number of scholarships college programs can offer players and set limits on the size of teams’ rosters.

But college officials still say federal lawmakers must protect the pending deal by passing laws that would strip athletes of their employment rights and strike down a number of state laws that govern how athletes can earn money from so-called name, image and likeness rights.

“This settlement is an important step forward for student-athletes and college sports, but it does not resolve all issues,” the top college athletics conference commissioners and NCAA President Charlie Baker, a former Republican governor of Massachusetts, said in a joint statement Friday.

“The need for federal legislation to provide solutions remains,” they said. “If Congress does not act, the progress made through the settlement could be significantly limited by state laws and ongoing litigation.”

The proposed agreement Friday is not contingent on federal legislation being signed into law, though colleges and universities have long pressed Congress to protect them from attempts to turn student-athletes into school employees who can seek union wages and protections.

Earlier this month, the 3rd Circuit Court of Appeals ruled that college athletes can be considered employees under the Fair Labor Standards Act. Members of the Dartmouth men’s basketball team voted earlier this year to become the first college athletes to unionize after the regional director of the National Labor Relations Board determined that the players qualify as employees under federal law.

College officials now hope to convince lawmakers that the settlement provides athletes with significant new benefits and clears the political path to granting the NCAA and schools desired exemptions from federal labor and antitrust laws. The settlement also includes a pledge that the athletes’ lawyers will “use reasonable efforts” to support legislation that would codify the agreement into law.

The new model detailed in Friday’s agreement represents a major victory for attorneys who have repeatedly challenged the NCAA’s limits on athlete compensation and already won a unanimous 2021 Supreme Court ruling that found that limits on player education benefits violated antitrust laws.

The total value of new payments and benefits for college athletes will exceed $20 billion over the next 10 years, according to attorneys for the athletes, who described the agreement as one of the largest class-action antitrust settlements in history.

“For too long, these athletes have been deprived of their economic rights in an unjust system that will now finally be fundamentally reformed,” Jeffrey Kessler, a prominent antitrust lawyer who represented the players, said in a statement. “The new system will allow athletes to be fairly compensated for their contributions, and college sports will continue to thrive.”

Schools and the NCAA will share nearly $2.8 billion in settlements over the next decade over claims related to name, image and likeness awards and other benefits.

Beginning in the 2025-26 academic year, schools will also have the option to share up to 22 percent of the average media, ticket and sponsorship revenue generated by their major athletic programs with their athletes.

This includes the ability for schools to enter into direct advertising agreements with athletes. Outside companies and organizations will still be able to enter into marketing agreements with athletes, but those agreements will be subject to a new oversight and enforcement program.

Plaintiffs’ attorneys also agreed to support “any proposed federal or state legislation” that would make the settlement permanent. That includes “reasonable cooperation to support antitrust immunity” for actions taken by college athletics overseers to uphold or implement the agreement,” according to the proposed settlement.