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NCAA and leagues approve $2.8 billion plan, laying the groundwork for paying college athletes

The NCAA and the nation’s five largest conferences announced Thursday night that they have agreed pay nearly $2.8 billion to settle series of antitrust claimsa monumental decision that sets the stage for an innovative revenue-sharing model that could begin directing millions of dollars directly to athletes as early as the fall 2025 semester.

NCAA President Charlie Baker, along with commissioners from the Atlantic Coast Conference, Big Ten, Big 12, Pac-12 and Southeastern Conference issued a joint statement saying they had agreed settlement terms. They called the move “an important step in the continued reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics across all divisions for years to come.”

The terms were not revealed, although some details have emerged in recent weeks. They signal the end of the NCAA’s fundamental model of amateurism that dates back to its founding in 1906. In fact, the days of the NCAA punishing athletes who drove booster-equipped cars began to fade three years ago when the organization lifted restrictions on sponsorship deals backed by so-called name, image and likeness money.

The settlement must still be approved by the federal judge overseeing the case and the plaintiffs will have the opportunity to opt out or challenge the terms of the settlement. If it stands, it will usher in a new era in college sports in which athletes will be compensated more like professionals and schools will be able to compete for talent through direct payments.

“No doubt about it. “It’s a big quantum leap,” said Tom McMillen, a former Maryland basketball player and congressman who has led a college athletic directors association for the past eight years.

Now, it’s not unreasonable to look ahead to seasons where star quarterbacks or top prospects on college basketball teams are not only cashing in on big NIL deals, but also have six-figure school payments in the bank to play with.

“This historic settlement will bring college sports into the 21st century, and college athletes will finally be able to receive a fair share of the billions of dollars in revenue they generate for their schools,” said Steve Berman, one of the lead attorneys for the plaintiffs. . . “Our clients are the foundation of the NCAA’s multi-billion-dollar business and can finally be compensated equitably and fairly for their extraordinary athletic talents.”

There are a lot of details yet to be determined, But the settlement calls for the NCAA and conferences to pay $2.77 billion over 10 years to more than 14,000 current and former college athletes who say the now-defunct rules prevented them from making money from sponsorship and endorsement deals dating back to 2016.

“Although it was only because of overwhelming legal pressure, the NCAA, the conferences and the schools agree that college athletes should be paid,” said Ramogi Huma, a former UCLA football player and longtime advocate of college athletes. “And from there there is no turning back. “That’s really innovative.”

Some of the money will come from NCAA reserve funds and insurance, but while the lawsuit specifically targeted five conferences that are made up of 69 schools (including Notre Dame), dozens of other NCAA member schools You’ll see smaller distributions from the NCAA to cover the gigantic payout.

Schools in the Big Ten, Big 12, ACC and SEC are likely to end up bearing the brunt of the deal going forward, with an estimated cost of about $300 million each over 10 years, most of the which would be paid directly to the athletes.

“The agreement, while undesirable in many respects and promising only temporary stability, is necessary to avoid what would be the bankruptcy of college athletics,” said Notre Dame President the Rev. John I. Jenkins.

PAYING ATHLETES

Under the new compensation model, each school will be allowed, but not required, to set aside up to $21 million in revenue to share with athletes each year, although as revenue increases the cap could also increase.

Athletes in all sports would be eligible to receive payments and schools would be free to decide how that money is divided among sports programs. Scholarship limits per sport will be replaced by roster restrictions.

It is unknown whether the new compensation model is subject to the Title IX gender equity law and whether schools will be able to conduct NIL activities internally as they expect and eliminate the booster groups that have emerged in recent years. to pay athletes. Both issues could lead to more lawsuits.

THE CASE

The federal class action lawsuit at the center of the settlement, House v. NCAA, was going to go to trial in January. The complaint, filed by former Arizona State swimmer Grant House and former Oregon and current TCU basketball player Sedona Prince, said the NCAA, along with the five richest conferences, improperly prohibited athletes from earning sponsorship money.

The lawsuit also argued that athletes were entitled to a share of the billions of dollars the NCAA and those conferences earn through media rights deals with television networks.

Amid political and public pressure, and facing the prospect of another court loss that some college athletes say could reach $20 billion in damages, NCAA and conference officials acknowledged what has long been been a central tenet of the company: that schools not pay athletes to play beyond a scholarship.

That principle has been undermined on numerous occasions over the last decade. In particular, the Supreme Court ruled unanimously against the NCAA in 2021 in a case involving education-related benefits.

The narrow focus of the Alston case did not collapse the college sports system, but the strong rebuke of the NCAA’s model of amateurism opened the door to more lawsuits. Justice Brett Kavanaugh, a former Yale athlete, put it bluntly: “The bottom line is that the NCAA and its member universities are suppressing the compensation of student-athletes who collectively generate billions of dollars in revenue for the universities each year.” .

THE OTHER CASES

The agreement is expected to cover two other antitrust cases against the NCAA and major conferences challenging athlete compensation rules. Hubbard v. NCAA and Carter v. NCAA are also currently in front of judges in the Northern District of California.

A fourth case, Fontenot vs. NCAA, creates a potential complication as it remains in a Colorado court after a judge denied a request to combine with Carter. It is unknown whether Fontenot will be part of the settlement and is important because the NCAA and its conferences do not want to be forced to pay more damages if they lose in court.

“We will continue to litigate our case in Colorado and look forward to hearing the terms of a proposed settlement once they are released and presented to court,” said George Zelcs, an attorney for the plaintiffs in Fontenot. .

COLLEGE ATHLETICS REVIEW

The solution agreed upon in the agreement is historic, but not surprising. College sports have been trending in this direction for years, with athletes increasingly receiving monetary benefits and entitlements that they say are long overdue.

In December, Baker, the former Massachusetts governor who has been in office for 14 months, proposed creating a new level of Division I athletics where schools with more resources would have to pay at least half of their athletes $30,000 a year. That suggestion, along with many other possibilities, remains the subject of debate.

The agreement does not make all the problems facing college sports go away. There is still the question of whether athletes should be considered employees of their schools, something Baker and other college sports leaders are fighting against.

Some form of federal legislation or antitrust exemption is likely still needed to codify the terms of the deal, protect the NCAA from future litigation and preempt state laws that attempt to neutralize the organization’s authority. How are the things going, NCAA still faces lawsuits that challenge its ability to govern itself, including establishing rules that limit transfers at multiple points in time.

“This agreement is also a roadmap for college sports leaders and Congress to ensure this uniquely American institution can continue to provide unmatched opportunities to millions of students,” the joint statement said. “The entire Division I made today’s progress possible and we all have work to do to implement the terms of the agreement as the legal process continues. “We look forward to working with our diverse student-athlete leadership groups to write the next chapter of college sports.”

Federal lawmakers have indicated they would like to get something done, but while Several bills have been introduced.none have gone anywhere.

Despite the unanswered questions, one thing is clear: Major college athletics is about to look more like professional sports than ever.

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Follow Ralph D. Russo on https://twitter.com/ralphDrussoAP and listen in http://www.apodcasts.com

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AP College Football: https://apnews.com/hub/college-football

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