A new era is dawning in college sports

Last week, the NCAA and America’s five largest athletic conferences (the Power Five) agreed to a $2.8 billion settlement that would reverse the amateur model that’s governed college sports since 1906. Translation: college athletes are one step closer to getting that bag – directly from their respective schools.

The settlement, which would resolve three ongoing antitrust cases from current and former athletes, has two parts:

1. It would distribute $2.8 billion in back-payments to ~14,000 student-athletes who have competed at Power Five schools since 2016.
2. It would create a future revenue-sharing model in which schools pay student-athletes a cut of the money received from sponsorships, broadcasting rights, and ticket sales.

Under the future model, D1 schools could distribute up to 22% of the average athletic department’s revenue – starting at ~$20 million/year – to their athletes, with full discretion over how those funds are distributed.

• The deal wouldn’t affect existing laws allowing athletes to profit from their own name, image, and likeness (NIL).
• However, it would eliminate scholarship limits and allow full rides for all players on a roster.

The Title IX question

The deal doesn’t explicitly address Title IX, a federal law that requires schools to provide equal opportunities for athletes regardless of their gender. But the law still applies, leaving universities in a seemingly lose-lose position:

• On one hand, an unequal revenue split between men’s and women’s sports would risk a Title IX lawsuit.
• On the other hand, an equal split of revenue by gender would risk a lawsuit from men’s football/basketball players, who could argue they’re receiving a disproportionate amount of the revenue they generate.

👀 Looking ahead… The landmark settlement now heads to a federal judge for approval, which is expected to take several months. If ratified, revenue-sharing payments to athletes would likely begin in Fall 2025.