The National Collegiate Athletics Association (NCAA) and its Power Five conferences have reached an agreement to resolve antitrust litigation with a proposed settlement of close to $2.8 billion. This decision comes after an extensive period of legal contestations, with student athletes lobbying for just remuneration.
In their shared statement, NCAA President Charlie Baker considered this settlement as a “significant step in the continuing reform of college sports”. It aims to benefit student-athletes and promises stability in college athletics across all divisions for the foreseeable future.
The NCAA anticipates that the settlement, which proposes to pay more than $2.75 billion in damages to college athletes over the next decade, will preempt potential future lawsuits. The Association has previously faced numerous suits claiming it takes advantage of athletes by prohibiting them from profiting from their images, names, and likenesses.
The proposed agreement will aim to resolve three pending antitrust lawsuits. This includes one instigated by college athletes who received class status last year, arguing against NCAA’s antitrust laws that bar them from receiving compensation for commercial use of their names and likeness. A trial date had been set for January 2025.
One key element of the settlement is the change in NCAA and conference rules prohibiting direct payments from schools to athletes. According to Hagens Berman and Winston & Strawn LLP, law firms representing athlete plaintiffs, this permits schools to share revenues directly with college athletes.
Despite generating $600 million in annual revenue, the NCAA has been the focus of growing scrutiny from private plaintiffs and federal authorities due to its restrictions regarding students’ freedom to transfer between schools and limitations on the use of a student’s name, image, and likeness (NIL).
The US Justice Department and several states have filed suits against the NCAA over regulations that restrict certain student athletes from competing if they transfer between Division I schools.
Provided all goes to plan, the agreement will usher collegiate sports into a new era where college athletes can finally receive an equitable share of the revenues they generate for their schools.
The case is identified as In re College Athlete NIL Litigation, N.D. Cal., No. 4:20-cv-03919.