On Thursday, the NCAA and the five power conferences agreed to a settlement in three anti-trust lawsuits that could potentially shift the college athletics landscape forever. The settlement allows eligible athletes back-payment from 2016-2019, allows for universities to pay athletes directly, eliminates scholarship caps, and provides further regulation around NIL payment.
The settlement will eliminate NCAA scholarship caps and instead, roster-caps will be initiated. This hasn't been fully outlined but essentially athletic departments will have the freedom to grant as many scholarships as they desire but the roster size for each sport will likely be trimmed.
*It's worth noting that while the NCAA and Power 5 schools have agreed to the settlement, it still has to be approved by the judge. This is expected to happen in the next 30-45 days.
House vs. NCAA Settlement Explained
As mentioned above, several outcomes from the settlement will impact college athletics. However, four main areas of the settlement are worth explaining:1. Back-Pay Damages
The NCAA and the Power 5 schools agreed to over $2.75 billion in back payments to eligible Division 1 college athletes from 2016 to 2019. This will be paid to individuals over the next 10 years for lost name, image and likeness (NIL) earning opportunities.2. Future Revenue Sharing
Starting in the fall of 2025, schools in the Power 5 conferences can opt-in to paying student-athletes directly. While the specifics haven't been outlined, it's estimated that if schools opt-in to this, they would likely pay about $20 million/year directly to athletes. It also appears that schools could opt-in to revenue sharing and be selective in what sports programs they choose to pay. Again this isn't required and there are still questions surrounding the specifics of this aspect of the settlement.3. Scholarship Cap Eliminated
In the current model, Division 1 sports have a capped amount of scholarships they are permitted to grant to athletes. Furthermore, the number of scholarships permitted varies from sport to sport. For instance, Division 1 football programs can grant up to 85 full scholarships while wrestling programs are limited to 9.9 full scholarships.The settlement will eliminate NCAA scholarship caps and instead, roster-caps will be initiated. This hasn't been fully outlined but essentially athletic departments will have the freedom to grant as many scholarships as they desire but the roster size for each sport will likely be trimmed.
4. NIL Regulation
NIL changed the game over the past few years, but with revenue sharing and the athletic departments able to pay athletes directly, it appears the NCAA wants to bring higher regulations around how athletes are compensated for their name, image, and likeness. Like the other items in the settlement, this isn't fully defined, but according to reports, the NCAA wants to ensure that athletes enter into legitimate NIL deals rather than a "pay for play" agreement from school donors.*It's worth noting that while the NCAA and Power 5 schools have agreed to the settlement, it still has to be approved by the judge. This is expected to happen in the next 30-45 days.