In a historic move that could upend the landscape of college sports, the NCAA and Big Ten Conference have approved a $2.8 billion settlement to resolve major antitrust lawsuits demanding athletes be allowed to share in revenue they help generate.
The NCAA’s Board of Governors voted unanimously Wednesday to accept the proposed settlement, which aims to resolve three federal antitrust cases threatening up to $20 billion in potential damages against the association.
A person with direct knowledge confirmed the Big Ten presidents also approved the deal during spring meetings in Los Angeles, according to The Associated Press.
Under the settlement terms, the NCAA would pay $2.77 billion over a decade to current and former college athletes who were denied opportunities to earn money from endorsements and sponsorships due to now-defunct rules dating back to 2016.
Sweeping changes to the NCAA’s amateur model are included in the agreement as well.
Most significantly, the settlement would require the establishment of a revenue-sharing system allowing schools to pay athletes up to $21 million per year combined – though distributions would not be mandatory. That revenue sharing figure could increase over time as revenues grow.
The breakthrough comes after the NCAA faced escalating legal pressure over its restrictions on athlete compensation. In a series of recent antitrust rulings, judges have continually sided against the NCAA’s arguments for classifying athletes as amateurs restricted from earning income related to their name, image, and likeness rights.
While the Big 12, ACC, and Pac-12 presidential boards had already voted to approve the settlement, a potential complication arose when a federal judge in Colorado ruled that a separate antitrust case, Fontenot v. NCAA, would not be combined with the other lawsuits covered by the deal.
Attorneys for the Fontenot plaintiffs argue their case is fundamentally different, seeking the full “free-market value” of athlete labor rather than just NIL compensation. However, Steve Berman, a lead attorney on House v. NCAA which spearheaded settlement talks, said Fontenot’s claims “completely overlap” and would be resolved by the deal.
The settlement still requires approval from a federal judge overseeing the combined House and Hubbard antitrust cases. If approved, it would mark an earth-shattering shift for the NCAA amateurism model, finally allowing schools to directly compensate athletes for use of their name, image and likeness – with possibilities for further revenue sharing down the line.
While $2.8 billion is an enormous sum for the NCAA to pay out, it could have faced over seven times that amount if judges ruled in favor of the plaintiffs’ claims of damages. By settling now, the NCAA and major conferences aim to bring an endgame to years of bitter legal battles over its definition of amateurism in the modern sports marketing era.
Implementing the settlement’s revenue-sharing system will present its own challenges for individual schools and conferences, and may take time.
But for college athletes long treated as unpaid labor, this breakthrough agreement could finally pave their path toward a slice of the billions they help generate for their programs each year.