College Athletes One Step Closer to Being Paid Directly by Schools Due to Judge Ruling
A recent development in college sports could shift the landscape of amateur athletics. Judge Claudia Wilken has granted preliminary approval to an anti-trust settlement involving the NCAA and Division I athletes, suggesting a significant change in how college athletes are compensated. The settlement, which has the backing of both the NCAA and the Power Five conferences, could yield around $2.8 billion for current and former athletes. It will allow colleges to pay players directly, starting with a cap of approximately $20 million per institution, which will increase over time.
This settlement arises from a lawsuit challenging outdated rules that limited athletes’ earning potential, particularly in high-revenue sports such as football and men’s basketball. Concerns have been raised about how the compensation structure may disadvantage female athletes, and those accepting the settlement must agree not to pursue Title IX lawsuits. A final decision on the settlement is expected by April 2025, with stakeholders anticipating this may allow college athletes to more fully participate in the economic opportunities available in American sports.
Big-time college sports is one step closer to leaving the days of amateur players behind.
Judge Claudia Wilken granted preliminary approval to an anti-trust settlement that has the blessing of lawyers representing Division I athletes, the NCAA and its Power Five conferences, according to ESPN.
Wilkin had at one point voiced concern that booster payments funneled to athletes might have been too easy to take away, according to ESPN.
Finally, college athletes (well, likely only football players and mens’ basketball players) are allowed to join America’s capitalism experiment. This is good. Don’t fight it. 🇺🇸🇺🇸🇺🇸https://t.co/ZoAVcJjm7J
— Darius Dale (@DariusDale42) October 8, 2024
However on Monday, she wrote she “will likely be able to approve the settlement as fair, reasonable and adequate.”
A final hearing on the deal is scheduled for April 7, 2025, which is also the day of the NCAA men’s basketball championship.
Athletes have until Jan. 1 to file objections to the deal or opt out of it.
The lawsuit in question argued that rules from the days when college sports was not a big-money venture were limiting how much athletes could make.
The NCAA has agreed to fork over about $2.8 billion to current and former athletes as part of the settlement.
There have been some concerns that most of that pie will go to football and men’s basketball players, whose sports generate the most revenue in broadcast rights. The deal would require female athletes to agree not to file Title IX lawsuits if they want to be part of the settlement.
The deal will abolish rules that were a vestige of the concept that college sports was an amateur affair, and allow colleges to pay players directly. There is a cap, however. It starts at about $20 million per college, and will increase annually.
The @NCAA is one step closer to allowing schools to directly pay athletes!
Key points:
• Schools could have ~$20ish million to distribute to athletes (if they can afford it).
• This may phase out the “NIL” and 3rd-party era.
• A $2.8 billion settlement would go to athletes…
— Jon Karcich (@JonKarcich) October 7, 2024
“We are thrilled that we are one step closer to a revolutionary change in college sports that will allow NCAA athletes to in billions of revenue,” said Steve Berman, co-lead counsel for the plaintiff class.
To ensure that it is exempt from anti-trust rules, the NCAA is seeking legislation from Congress it says is essential for the settlement, according to The New York Times.
“We are thrilled by Judge Wilken’s decision to give preliminary approval to the landmark settlement that will help bring stability and sustainability to college athletics while delivering increased benefits to student-athletes for years to come,” NCAA president Charlie Baker said in a statement.
How does the NCAA hold a basketball tournament where some of the players are being paid directly by their Athletic Department and some are purely amateur players?
— Immaculate (@ImmaculateView) October 7, 2024
“Today’s progress is a significant step in writing the next chapter for the future of college sports. We look forward to working with all of Division I, and especially student-athlete leadership groups to chart the path forward and drive historic change,” he said.
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