$2.8 Billion Agreement between NCAA and former college athletes
On May 23,2024, the NCAA reached a massive $2.8 billion settlement with former college athletes who had filed an antitrust class action in potential compensation denied to them for years. This massive settlement would be paid over the next decade to over 14,000 former and current student-athletes and could start as soon as Fall 2025. NCAA President Charlie Baker, in a joint statement with other conference commissioners, stated “is an important step in the continuing reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics across all divisions for years to come,” The NCAA and the conferences have stated how this settlement is now a “roadmap” that allow the NCAA to provide an unique and lucrative opportunity for students and write the “next chapter of college sports.” This marks a historic point in college athletics.
Athlete Payment
Under the settlement agreement, the NCAA would be responsible for roughly $1.2 billion from reserves, or 41 percent of the more than $2.75 billion. The Power Five conferences would be responsible for about 24 percent in withheld future revenues, the Group of Five conferences (the American Athletic Conference, Conference USA, Mid-American Conference, Mountain West Conference and Sun Belt Conference) for about 10 percent, Football Championship Subdivision (FCS) schools for about 13 percent and Division I schools without football programs about 12 percent.
In this new athlete compensation model, each NCAA school can set aside up to $21 million in revenue to share with student-athletes per year. Athletes in all sports would be eligible for payments and it will be the school’s decision to decide how the money is allocated to each sport.
Â
What’s Next?
This historic settlement is a long-awaited victory for student-athletes who have deservedly fought for more rights and deserved monetary compensation under the antiquated amateurism model of the NCAA. Yet, this may not be the only change forthcoming to collegiate athletics.
In December 2023, Baker proposed an idea of creating a new tier of Division 1 athletics whereschools with the most resources would be required to pay at least half of their athletes $30,000 per year. This idea still remains under discussion while the NCAA still fights other battles such as whether athletes should be deemed employees of their school.
It is an exciting time if you are a student-athlete or a recruit looking to join a NCAA institution. There is an opportunity where you can get an education, play amateur sports and also get deserved financial compensation. American collegiate sports is now an opportunity for every potential student-athlete in the world to benefit getting educated and justly compensated.