Since its inception, the NCAA has operated under a business model that defines the college athlete as an amateur. Over the years, as college sports evolved into a mega-business, lawsuits and industrial action eroded that model, which increasingly became seen as exploitative in big-budget sports like football and men’s basketball.
But the NCAA’s $2.8 billion settlement Thursday night in an antitrust class-action lawsuit represents the biggest — and perhaps decisive — blow to that system.
If approved by a U.S. district judge in California, the settlement would allow the creation of the first revenue-sharing plan for college athletics, a historic change in which schools would directly pay their athletes to play.
However, this radical change also raises its own questions, critics say. These include whether women would be fairly compensated, whether smaller conferences would bear a disproportionate burden of the settlement and whether this framework would do anything to limit the power of collectives – the booster-funded groups that lure players with hopscotch payments from one school to another. .
“This is an agreement that is both historic and deeply flawed,” said Michael H. LeRoy, a law professor at the University of Illinois. “The idea of schools paying millions of dollars to the people who sell the television contracts and fill the seats is fine. But that closes a can of worms and opens four or five others.”
In recent years, college athletes have already made significant strides toward earning the right to earn money for their performances. Three years ago, they were first allowed to individually and legally market their name, image and likeness. And in March, the Dartmouth men’s basketball team voted to form a union after a federal official ruled the players were employees of the school. Thursday’s ruling in House v. NCAA was seen by many college administrators as an inevitable conclusion.
The suit is named after former Arizona State swimmer Grant House, the plaintiff.
In settling the case, the NCAA sought to avoid a catastrophic ruling and stave off the constant beating of antitrust lawsuits that have hampered the organization’s ability to establish even the most basic rules.
Had the lawsuit gone to trial, the NCAA and major conferences named as co-defendants — Big Ten, Southeastern, Atlantic Coast, Big 12 and Pac-12 — would have feared a potential price tag topping $4 billion.
By reaching an agreement, the NCAA also sends a signal to Congress – which has been reluctant to intervene in the organization’s governance – that the association’s request for an antitrust exemption is a necessary aid and not a safety plan.
“The settlement, while undesirable in many respects and promising only temporary stability, is necessary to avoid what would be the bankruptcy of college athletics,” said the Rev. John I. Jenkins, president of Notre Dame , in a press release. He called on Congress to preempt a patchwork of state laws, establish that athletes are not employees and, with an antitrust exemption, give schools more freedom to set rules.
But the uncertainty of antitrust protection was underscored Thursday when a Colorado judge denied the NCAA’s request to move another antitrust case, Fontenot v. NCAA, to the same court that will rule on Thursday’s settlement.
The decision leaves open the possibility that athletes who are part of the settlement group in the House case – any Division I athlete dating back to 2016 – could opt out if they believe the Fontenot case could bring them more money. ‘money. The formula used in the House case calls for schools to share about 22 percent of their revenue with players; this figure is much lower than that provided by major professional sports leagues, which have agreed to share about 50 percent of revenue with players.
Ramogi Huma, a longtime advocate for college athletes, said more will be known about the settlement when it is presented to the judge, Claudia A. Wilken. “But I don’t see a settlement in this case as something that could pass for comprehensive reform,” he said.
The settlement has two elements: back pay from name, image and licensing revenue that was denied to players before the rule change three years ago, including revenue from football broadcast rights ; and a framework for paying athletes for these rights in the future.
What is not clear is who will be paid and how much.
The $2.8 billion in damages is tied to revenue generated almost exclusively by major football and men’s basketball conferences, whose athletes represent one class of plaintiffs. Another class is women’s basketball players from major conferences. And the last course is made up of all the others.
Going forward, the settlement means schools could set aside about $20 million each to pay their athletes as early as the 2025 football season.
Schools will have their own decisions to make on how to distribute payments to athletes. Does Michigan, for example, want to split the money between its lacrosse and cross country teams, or devote almost all of its money to football and basketball? And will Title IX require that money be divided equally between men and women?
A hint at the possibility of a settlement came in December when Charlie Baker, president of the NCAA and former governor of Massachusetts, proposed that schools set aside at least $30,000 a year in trust funds for the education for at least half of the school’s athletes. This was the first time the NCAA accepted the idea of uncapped compensation.
This idea would have essentially created two classifications within Division I: those who could afford it and those who could not.
But today, implementation is largely subsidized by schools that do not participate in big-time football. The 27 Division I conferences that are not named in the lawsuit must pay a $990 million settlement through NCAA distributions from the men’s basketball tournament that will be withheld over a 10-year period.
Many schools became aware of this arrangement through details of the settlement negotiations that were reported in the media. They were briefed by the NCAA on May 6.
“It feels like the NCAA is bailing out the biggest spenders, and conferences like ours are paying the majority of the settlement,” said Robin Harris, executive director of the Ivy League. “The Ivy League is not being sued in these lawsuits, and we are bearing the costs of the majority that are, so it’s frustrating.”
The 22 conferences that do not have access to the College Football Playoff, which determines the national champion, presented an alternative funding model that reduced their contribution, but that plan was rejected. The NCAA Board of Governors approved the settlement agreement Wednesday evening by a vote of 8-0 with one abstention, according to a person familiar with the vote.
“The fact that a settlement is a good thing is not lost on me,” 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 put everything to bed. In my opinion, this is a rushed and non-inclusive process, which is concerning when we are talking about a multi-billion dollar decision.