College Sports and the Billion Dollar Settlement

College sports has been under a massive amount of change the past few years. NIL, transfer portal, CFB Playoff expansion, and conference realignment have altered the landscape of college sports.

The next big happening in college sports has occurred. A $2.8 billion dollar anti-trust settlement for former NCAA athletes has dropped. The settlement will change the way college sports has been done for the past 100 years. Bottom line, is that colleges and universities can pay their athletes through licensing deals. This goes against any thought of amateurism that the NCAA has been pushing forever.

How much money will be paid out to athletes?

In the first year of this new “deal” each school can pay up to $20.5 million to its athletes. This money represents approximately 22% of their revenue that the schools get from sponsorships, media rights, and ticket sales. Some of this money will come from the increasing media rights deals and the CFB Playoff. However, the schools are passing the bill onto the fans. Universities have come up with so-called talent fees, athletic fees, and prices hikes in concessions to put into the tuition fees for students and fans.

College Sports settlement:

Former Arizona State swimmer, Grant House, sued the defendants. The defendants were the NCAA and the biggest athletic conferences in the country. House’s lawsuit and two other lawsuits were combined. Over the course of several years the lawsuit ended up with this settlement. Plus, it ended decades of prohibition of paying college athletes. Now, schools can pay their athletes with their use of their name, image, and likeness (NIL). For reference, there are 200,000 athletes and 350 schools alone in Division 1 and there are 500,000 athletes and 1,100 schools in the entire NCAA.

Haven’t athletes been getting paid?

Yes, athletes have been getting paid since 2021. The NCAA cleared the way for athletes getting paid after suffering losses in court. NCAA athletes have been able to collect money from third-party entities including donor backed collectives. Under this settlement the university can directly pay the athlete and the collectives are still able to exist.

Will $20.5 million cover the costs?

In reality, probably not. However, under the terms of this settlement players can still cut deals with third party companies. This is the new world order in college sports. Schools will still be fighting for top talent and then fighting to keep top talent on their campus. For example, schools are paying around $2 million dollars for quarterbacks and in this scenario that eats up about 10% of their $20.5 budget.

College sports and scholarships:

Scholarships have always been a part of the college sports landscape. It doesn’t change with this landmark settlement. The NCAA has said its member schools have handed out about $4 billion a year in scholarships to college athletes. College athletes have long complained that it’s hardly enough to compensate them for the amount of revenue they have generated for their respective schools. Plus, the athletes have seen where this huge amount of money has gone. Athletes have seen the money go to new practice facilities, new locker rooms, redesigned stadiums, and multi-million dollar contracts to head coaches around the country. The athletes have sued to get a piece of that pie.

At the end of the day, this settlement does not solve all the problems. In fact, this settlement seems like it’ll bring about more litigation. There are questions about having collective bargaining and whether or not schools should just consider athletes employees. So far, the schools don’t seem interested in making athletes employees. The NCAA has pushed Congress to consider a limited anti-trust exemption, but have not got a response from Capitol Hill as of yet.

Michael J. Wilson- The Daily Waiver

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