Direct Payment To Athletes By Schools Is Here

NCAA, Power 5 conferences sign off on $2.8 billion plan, setting stage for dramatic change across college sports

Agreement provides for schools to pay athletes directly as soon as the 2025 fall semester…

The NCAA and five major college sports conferences have agreed to settle antitrust allegations for nearly $2.8 billion over the next 10 years. (Jae C. Hong / AP)

Ralph Russo (AP —  The NCAA and the nation’s five biggest conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims, a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester.

The deal still must be approved by the federal judge overseeing the case and challenges could arise, but if the agreement stands it will mark the beginning of a new era in college sports where athletes are compensated more like professionals and schools can compete for talent using direct payments.

“There’s no question about it. It’s a huge quantum leap,” said Tom McMillen, the former Maryland basketball player and congressman who led a group of collegiate athletic directors the past year years.

The Pac-12 was the final conference to sign off when university leaders voted Thursday to approve the plan, according to a person with direct knowledge of the decision. Southeastern Conference school leaders unanimously approved the deal a few hours earlier, a second person with knowledge of that decision said. Both spoke to The Associated Press on condition of anonymity because a coordinated announcement among the Pac-12, SEC, Big Ten, Big 12, Atlantic Coast Conference and NCAA was still being prepared. All met a Thursday deadline set by plaintiffs’ attorneys.

The details in the plan signal the end of the NCAA’s bedrock amateurism model that dates to its founding in 1906. Indeed, the days of NCAA punishments for athletes driving booster-provided cars started vanishing three years ago when the organization lifted restrictions on endorsement deals backed by so-called name, image and likeness money.

Now it is not far-fetched to look ahead to seasons where a star quarterback or top prospect on a college basketball team are not only cashing in big-money NIL deals but have a $100,000 school payment in the bank to play.

There are a host of details still to be determined, but the agreement calls for the NCAA and the conferences to pay $2.77 billion over 10 years to more than 14,000 former and current college athletes who say now-defunct rules prevented them from earning money from endorsement and sponsorship deals dating to 2016.

“Even though it was only because of the overwhelming legal pressure, the NCAA, conferences and schools are agreeing that college athletes should be paid,” said Ramogi Huma, a former UCLA football player and longtime advocate for college athletes. “And there’s no going back from there. That’s truly groundbreaking.”

Some of the money will come from NCAA reserve funds and insurance but even though the lawsuit specifically targeted five conferences that are comprised of 69 schools (including Notre Dame), dozens of other NCAA member schools will see smaller distributions from the NCAA to cover the mammoth payout.

Schools in the Big Ten, Big 12, Atlantic Coast and Southeastern conferences will end up bearing the brunt of the settlement at a cost of about $300 million each over 10 years, the majority of which will be paid to athletes going forward.

The Pac-12 is also part of the settlement, with all 12 sharing responsibility even though Washington State and Oregon State will be the only league members left by this fall after the other 10 schools leave.

Paying athletes

In the new compensation model, each school will be permitted but not required to set aside up to $21 million in revenue to share with athletes per year, though as revenues rise so could the cap.

Athletes in all sports would be eligible for payments and schools would be given the freedom to decide how that money is divvied up among sports programs. Scholarship limits by sport will be replaced by roster restrictions.

Whether the new compensation model is subject to the Title IX gender equity law is unknown along with whether schools will be able to bring NIL activities in-house as they hope and squeeze out the booster-run collectives that have sprouted up in the last few years to pay athletes. Both topics could lead to more lawsuits.

The case

The class-action federal lawsuit at the center of the settlement, House v. the NCAA, was set to go to trial in January. The complaint, brought by former Arizona State swimmer Grant House and Sedona Prince, a former Oregon and current TCU basketball player, said the NCAA, along with the five wealthiest conferences, improperly barred athletes from earning endorsement money.

The suit also made the case that athletes were entitled to a piece of the billions of dollars the NCAA and those conferences earn from media rights agreements with television networks.

Amid political and public pressure, and facing the prospect of another court loss that some in college sports claimed could reach $20 billion in damages, NCAA and conference officials conceded on what has long been a core principal of the enterprise: That schools don’t directly pay the athletes to play beyond a scholarship.

That principle had already been dented numerous times over the last decade.

Notably, the Supreme Court unanimously ruled against the NCAA in 2021 in a case related to education-related benefits. The narrow focus of the Alston case didn’t collapse the collegiate sports system, but the strong rebuke of the NCAA’s model of amateurism flung the door open to more lawsuits. Justice Brett Kavanaugh, a former Yale athlete, put it bluntly: “The bottom line is that the NCAA and its member colleges are suppressing the pay of student athletes who collectively generate billions of dollars in revenues for colleges every year.”

latimes.com

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Golden Trojan
Major Genius
May 24, 2024 2:43 pm

There are 190,000 D-1 athletes. Maybe 5%, 10,000, will get a 6 figure payout. A few will get a million plus. 95% of D-1 athletes, even in football and men’s basketball will get free tuition and a small stipend. USC has 726 student athletes. If they share equally in the $21 million proposed, that’s $29,000 a year per student. So 15 years after O’Bannon v NCAA, we will have some student athletes cashing in pretty well but most getting free college and now a stipend. I doubt that will ruin college sports.

Chris
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Chris
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May 24, 2024 3:18 pm
Reply to  Golden Trojan

Only men’s basketball and football would get real NIL money. The rest will get scraps.

Golden Trojan
Major Genius
May 24, 2024 3:54 pm
Reply to  Chris

Right most will get $2-3 thousand a month spending money. Not bad, better than they are getting now.

Canyon
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Canyon
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May 24, 2024 3:20 pm
Reply to  Golden Trojan

In the end many student athletes will lose. Colleges will drop many sports from their athletic program and only football, basketball & maybe track & field, swimming, tennis, golf will be the only sports available in college. No more free education anymore (no more scholarships for many).
 
Schools won’t be able to pay all the student athletes in current athletic programs. It’s bad economics and nonsense financial undertaking.
 
Right now, many college athletic programs are running in da Red. Heck, add a huge student athlete payroll will bankrupt every college athletic program.
 
Freaken sad scenario for college sports.

Golden Trojan
Major Genius
May 24, 2024 3:53 pm
Reply to  Canyon

Schools are permitted but not required to pay athletes. Some schools won’t be able to. They won’t be Power 4 and not playing for D-1 National Championships. There will have to be a new division, D-Elite (those that can pay), followed by D-1, D-2, D-3 (those that can’t). The new D-1 may look like the old days, just not elite talent, but still fun to watch. The D-Elite may not have the full range of sports teams beyond football and basketball but maybe not. The Big10 and SEC schools are getting $65 million per school per year just for football… Read more »

Canyon
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Canyon
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May 24, 2024 4:53 pm
Reply to  Golden Trojan

For every college athletic program, revenue from FB tickets and TV pays for all da other sports. Basketball is pretty much break even and maybe have a small profit. I read dat pretty much 97% of all college athletic programs are running in the Red.
 
No college athletic program will be able to pay all da athletes. They will drop or cancel many sports. Freaken greed by FB players are gonna destroy many college sports. These student athletes will be deprived of a free education.

Also, schools won’t put up with SA unions…

Golden Trojan
Major Genius
May 24, 2024 3:56 pm
Reply to  Canyon

Of course America is the only place on the planet where universities even have spectator sports teams

RialtoTrojan
Noble Genius
RialtoTrojan
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May 24, 2024 10:29 am

Now College Athletics Anarchy (NCAA) I have often called for the replacement of the NCAA with an official system that isn’t corrupt. Now it looks like the corrupt will be the normal people. The whole schema of college athletics based on amateur athletes is essentially dead. The real question should be not how to “fairly pay” students, but what do you do with them after their employment is up. Will schools grant extra time based on achievement? Currently a large number of players finish their careers upon graduation, but with the new rules they are professional players who might not… Read more »

Jamaica
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Jamaica
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May 24, 2024 11:42 am
Reply to  RialtoTrojan

RT, this NIL pandemic is about one thing in reality: What’s in it for me! If you remember it all started with a former basketball star across town wanting a cut of the money his school made when he played for them. It was about him. He said nothing about all the other players. This is where all the have nots will rally in unity and agents will be in the ready to form a Union. But the bottom line will always be “about me”.

Golden Trojan
Major Genius
May 24, 2024 2:40 pm
Reply to  Jamaica

Jamaica the actual full case name was Edward C. O’Bannon, , Jr., On Behalf of Himself and All Others Similarly Situated v. National Collegiate Athletic Association, aka The NCAA. That was filed 15 years ago.

Canyon
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Canyon
Offline
May 24, 2024 9:31 am

NCAA Tennis Championships, Single’s, @ Oklahoma St tennis center.   5-20-24 to 5-25-24   Men.   A lot of the da top seeds were upset early. Good reasons, most of their teams went far into the team championship playoff tournament last week. Thus, these players played so much grueling tennis and with only 2 to 3 days rest going into the single’s tournament. The NCAA tennis championships is hard on players dat go far in the team tournament.   On the other hand players and their teams dat did not go far into the team tournament have a huge advantage playing the single’s… Read more »

Canyon
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Canyon
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May 27, 2024 3:22 pm
Reply to  Canyon

NCAA Tennis NC Tournament.
 
Men. Finals
 
Flip Planinsek, #29 ranked, Jr, Bama, Slovenia (W) vs Michael Zheng, #23 ranked Soph, Columbia, New Jersey, 6-7, 6-3, 6-2. Tough 3 sets. Mike Zheng, from New Jersey was the #3 HS ranked player in nation.
 
Ozan Baris, #9 ranked, Michigan St, Michigan. Colton Smith, #22 ranked, Jr, Arizona, Washington.
 
https://www.ncaa.com/_flysystem/public-s3/images/2024/05/25/2024%20NCAA%20M%20Singles%20052524.pdf
 
 
Women. Finals
 
Alexa Noel, #10 ranked, Jr, Miami, New Jersey (W) Ana Lopata, #70 ranked, UGA, Ukraine, 4-6, 7-5, 6-3. Tough 3 sets. A.Noel was the #4 ranked HS player.
 
Amelia Rajecki, #2 ranked, NC St, England. Mary Stoiana, Jr, #1 ranked, Texas AM, Conneticutt..
 
https://www.ncaa.com/_flysystem/public-s3/images/2024/05/25/2024%20NCAA%20W%20Singles%20052524.pdf

Jamaica
Noble Genius
Jamaica
Offline
May 24, 2024 9:07 am

It might be the right thing to do today but it will change college sports for ever! It will eventually force players to join player unions as who gets paid what will come into the locker rooms and cause issues. It will also create a change in fan attitudes at stadiums in booing a player or team of its own thinking their money is not being earned. Where academics will fit into this scenario is anyone’s guess. Will a Union demand eventually come into effect that levels all Universities in their admittance requirements the same. Could we see a player… Read more »

Golden Trojan
Major Genius
May 24, 2024 10:26 am
Reply to  Jamaica

Jamaica the more you start thinking about it the more complicated it gets. I wonder will Power 4 university presidents and ADs have renewed discussions on how many nonrevenue sports they should have? If you have a $21 million pie, the more pieces you have to cut up the less for everyone. For Title IX you need equal men and women athletes. Outside of football and men’s and women’s basketball, you may want just enough women’s sports to off set football. Bye bye men’s soccer, baseball, water polo, swimming/diving, golf, tennis in the Power 4 schools. That would be sad.… Read more »

Golden Trojan
Major Genius
May 24, 2024 8:40 am

Just when the rules of the game get set with NIL, it becomes a new game. The 2025 recruiting class will be the first in this new model. What schools are already out in front and who will be late to the table? Congress has a year to get out federal legislation to prevent the whole thing from blowing up. Title IX, labor law, tax law are all a factor now. Does a women’s lacrosse player get the same salary as a 5* QB? Are player unions school by school or national, subject to state laws or federal? Are team’s… Read more »

Steveg
Noble Genius
Steveg
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May 23, 2024 7:44 pm

This sure will change the college sports inviorement. Hope these kids learn how to balance a checkbook before college. It is going to create a whole staff just to maintain payroll for the players. Going to get crazier before they are done.

Chris
Major Genius
Chris
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May 23, 2024 9:19 pm
Reply to  Steveg

For sure. This is the domino that will topple all others at breakneck speed. Players union coming in less than a year. Power 5 in own division in 2026 at the latest.

PN4SC
Genius Member
PN4SC
Offline
May 23, 2024 7:00 pm

USC needs to win two more games to get the automatic bid for post season. That is still a steep hill to climb.Considering no home field and all the key injuries, I thank Stank has done a great job.
Beating Oregon made it that much sweeter.