The NCAA and its Power 5 conferences reached a legal settlement this week that allows schools to pay athletes directly.
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College athletics is about to change dramatically.
The NCAA and the so-called “Power Five” athletic conferences reached a groundbreaking agreement Thursday that aims to end a century-old amateur tradition in college sports by allowing athletes to be paid directly from the colleges and universities where they play.
The agreement is part of a class-action lawsuit called House v. NCAAmust be approved by the federal judge overseeing the case, a decision that could take months.
The proposed settlement is divided into two parts. First, it would allocate about $2.75 billion to athletes who competed before July 2021, when the NCAA first allowed athletes to make money from name, likeness and likeness rights. Second, it would create a future revenue-sharing model that would allow each school to distribute approximately $20 million per year directly to athletes.
But rather than ending years of debate and litigation surrounding student-athlete payments, the proposed settlement raises a slew of more questions: Which athletes will be compensated? How much money will they make? Will women be paid equally as men? Can schools that can’t afford to pay their athletes keep up with larger, wealthier schools?
“These are going to be very important details that we have to work out,” said Matt Mitten, a sports law professor at Marquette University. “The settlement is just the beginning.”
Here’s what we know about and the big questions that haven’t been solved yet.
What would the proposed settlement cover?
In short, the future-oriented portion of the proposed agreement creates a system in which schools that are members of the Power 5 conferences (Atlantic Coast Conference, Big Ten, Big 12, Pac-12 and Southeastern Conference) can all vote to adopt the proposed Settlement – Payments could be made to athletes.
Each school will be allowed to allocate up to about $20 million to its athletes, an amount based on a percentage of average annual revenue for power conference programs. The ratio starts at 22% and may increase over time. Other schools outside of the Power 5 conferences are also expected to be able to opt in.
“This landmark settlement will bring college sports into the 21st century, allowing college athletes to finally receive their fair share of the billions of dollars in revenue they generate for their schools,” plaintiffs’ attorney Steve Berman said in a statement. .
Will all college athletes get paid?
Won’t. That’s because college athletic departments have historically derived most of their revenue from television contracts broadcasting those two sports. The women’s basketball team also gets some revenue and the players get paid.
“It’s going to be up to each school to decide how to allocate the $20 million,” said Mit Winter, an attorney representing conferences, schools and athletes. “And it could vary significantly from school to school.” Various College Sports Law question.
Schools could also choose to pay athletes in sports that don’t typically generate revenue, such as rowing, football, tennis, track and field, etc., but it’s unclear how institutions would choose to proceed.
Many schools that are not part of a major conference may choose not to pay any players anything at all, which could ultimately drive a competitive divide between the haves and have-nots.
Mitten cited the example of his employer, Marquette University, whose men’s basketball team has reached the Final Four three times, even though the school lacked a football team and the corresponding revenue to more easily pay its players.
“How do we maintain equity and competitive balance among the 350-plus Division I basketball schools when not all of them play football and individually receive millions of dollars from these large television contracts?” he said. .
Will women be paid equally as men?
The proposed settlement marks new territory for Title IX, the cornerstone of civil rights law that prohibits sex discrimination in educational institutions that receive federal funding.
Title IX’s impact on college sports was huge, as schools were required to pay scholarships to women at the same rate as men.
Now, schools must determine whether and how the law applies to earnings paid to athletes. He said the issue may need to be resolved through litigation.
“There’s really no definitive final answer as to how Title IX will apply,” Winter said. “I think some schools are going to assume that Title IX is going to require them to donate 50 percent of that $20 million to female athletes and 50 percent to male athletes. Other schools are not going to make that assumption.”
Is the NCAA’s antitrust woes over?
While the NCAA may be hoping this settlement puts years of antitrust litigation behind it, at this point, experts agree: the answer is no.
Of particular concern is the settlement’s cap on payment amounts, currently set at 22 percent of a Power 5 school’s average annual revenue. That’s a much lower percentage than in professional sports like the NFL and NBA, where half of the revenue is taken home by the players.
In these leagues, players agree to receive that portion of their revenue through collective bargaining agreements. Mitten said these labor agreements provide legal protection from individual compensation lawsuits. But in college sports, athletes are not considered employees, so no such bargaining agreements exist, meaning the NCAA still faces antitrust lawsuits.
The NCAA and schools are already lobbying Congress to pass federal antitrust exemptions for college sports to protect them from future wage lawsuits.
