CALIFORNIA – The NCAA, representing around 1,100 schools and over 500,000 athletes, has faced numerous lawsuits throughout its history, defending the amateur athlete model that is the cornerstone of college sports.
Since the 1980s, the organization has been in the courts, but recently it has suffered a series of significant defeats.
In 2021, the United States Supreme Court issued a unanimous 9-0 decision against the NCAA, ruling that the organization cannot limit the educational benefits that universities offer their athletes.
This ruling, accompanied by a powerful opinion from Justice Brett Kavanaugh, suggested that the NCAA might be violating antitrust laws. This decision opened the door for college athletes to benefit financially from their fame and for schools to direct more funds toward them.
The case of House vs. NCAA, a class action lawsuit filed in the Northern District of California and overseen by federal judge Claudia Wilken, has been crucial in this shift.
Judge Wilken, known for her previous rulings favoring athletes, laid the groundwork for this new compensation model. Legal experts warned that a loss for the NCAA in this case would upend the landscape of college sports, and it has.
In May, the NCAA and the country’s major conferences decided to settle the accusations for $2.8 billion, moving towards a revenue-sharing model with athletes, funded by lucrative college football and March Madness basketball TV deals.
Thousands of former college athletes will be eligible for payments under this settlement, ranging from a few dollars to over a million.
This agreement not only compensates athletes for the past but also establishes a framework for schools to directly compensate athletes in the future, regulating sponsorship payments.
The settlement includes guidelines on roster limits for individual sports, replacing scholarship limits, and establishes how new financial payments will be monitored and enforced.
Third-party payments to athletes are also regulated, and the distribution of nearly $3 billion in damages over the next 10 years is detailed. These payments will vary based on the sport, time period, and conference in which the athlete competed.
While all Division I athletes will be eligible for damages, most of the funds are expected to go to football and basketball players from power conferences, as these sports generate the majority of the revenue.
In conclusion, this settlement represents a seismic shift in college sports, allowing athletes to share in the revenue generated by their efforts and redefining the amateur athlete model.
The NCAA and college conferences will need to adapt to this new reality, ensuring fair compensation for the athletes who have been the heart of college sports for decades.
