Decades in the making, a new era dawns for the NCAA – paying athletes directly

NEW YORK – Since its founding in 1906, the National Collegiate Athletic Association (NCAA) has operated with a business model that defined the college athlete as an amateur.

Over the years, as college sports evolved into a mega-enterprise, lawsuits and labour actions chipped away at that model, which came to be seen as exploitative in big-money sports like American football and men’s basketball.

But the NCAA’s US$2.8 billion (S$3.8 billion) settlement on May 23 in a class-action antitrust lawsuit represents the heaviest blow – and perhaps a decisive one – to that system.

If approved by a United States district judge in California, the settlement would allow for the creation of the first revenue-sharing plan for college athletics, a landmark shift in which schools would directly pay their athletes for playing.

“The five autonomy conferences and the NCAA agreeing to settlement terms is an important step in the continuing reform of college sports,” a joint statement from NCAA president Charlie Baker and the commissioners of the five biggest conferences said.

“This settlement is also a road map for college sports leaders and Congress to ensure this uniquely American institution can continue to provide unmatched opportunity for millions of students.”

In recent years, college athletes had already made strides in gaining the right to make money for their performances.

In 2021, they were allowed for the first time to individually market their name, image and likeness legally. And in March, the men’s basketball team at Dartmouth voted to form a union after a federal official ruled that players were employees of the school.

As such, the settlement was seen by many college administrators as an inevitable conclusion.

In settling the case, the NCAA sought to avoid a catastrophic judgment and ward off the steady drumbeat of antitrust lawsuits that have hampered the organisation’s ability to make even the most basic of rules. Had the suit gone to trial, the NCAA and the major conferences that were named as co-defendants would have feared a potential price tag exceeding US$4 billion.

The settlement has two components – back pay from name, image and licensing revenue that were denied to players before the rule change three years ago, including revenue from football broadcast rights; and a framework for paying athletes for those rights going forward.

What is unclear is who will get paid and how much.

The US$2.8 billion in damages – over the course of more than 10 years – is tied to revenue generated almost exclusively by major conference football and men’s basketball, whose athletes represent one class of plaintiffs.

Another class is women’s basketball players in the major conferences. And the final class is everyone else. But going forward, the settlement also means that schools could set aside about US$20 million each to pay their athletes as soon as the 2025 football season.

“The fact a settlement is a good thing is not lost on me,” said Julie Roe Lach, commissioner of the Horizon League. “We needed some level of stability, but it doesn’t put everything to bed. In my view, this was a rushed process, and it was not inclusive, which is concerning when you’re talking about a multi-billion-dollar decision.” NYTIMES, AFP