The preliminary settlement in the antitrust cases against the NCAA and the Power Five conferences promises to dramatically change the landscape of college sports in the United States. The settlement, which includes a $2.8 billion damage fund for current and former athletes, will also allow Division I schools to pay their players for the use of their name, image and likeness (NIL), marking a before and after in the college sports industry.
Under the agreement, NIL payments will begin with an initial cap of between $20 million and $23 million per school in the 2025-26 academic year. In addition, traditional scholarship restrictions by sport will be replaced with limits on teams. For example, football will see a maximum of 105 players per team, a significant reduction compared to current rosters of more than 125 players at some schools, as noted from ‘USA Today’.
MATCHING NFL AND NBA PLAYERS
Plaintiffs’ lawyers stress that this settlement not only benefits athletes financially with the $2.8 billion fund, but could increase total benefits to them by more than $20 billion over the next decade. “This monumental settlement revolutionizes college sports and puts athletes in a position to earn the same percentage of revenue as NFL and NBA professionals,” attorneys noted in documents filed Tuesday.
Continuing with financial issues, it has also drawn attention that the plaintiffs’ lawyers requested $525 million in fees and costs, to be paid over a 10-year period, plus the right to request an additional annual percentage that could add up to $250 million more. According to the lawyers, this request represents only 3.2% of the total estimated value of the settlement if future benefits to the athletes are included.
While this figure is significant, the lawyers defend their request as reasonable, noting that in similar cases in the U.S. it is 25% of the value of the settlement is used as a benchmark. “This is one of the largest settlements in the history of antitrust cases,” they asserted.
APPEALS AND POSSIBLE DELAYS
Federal Judge Claudia Wilken is scheduled to hold a hearing for final approval of the settlement on April 7, 2025 in Oakland, California. However, any objections could delay implementation of the settlement, as happened in a previous college sports compensation case, which dragged on for two years due to appeals.
In the event of appeals, schools could begin offering NIL payments and implementing the new team limits by 2025-26, but damage funds and legal fees would be on hold until litigation is resolved.
HISTORIC FOR COLLEGE SPORTS
The agreement not only redefines financial rules, but also challenges traditional college sports structures. By allowing NIL payments and relaxing scholarship rules, Division I schools will be able to compete more fairly while attracting and retaining athletic talent.
This change comes at a critical time, where revenues generated by college sports, especially in Power Five conferences, have reached record highs. The plaintiffs describe the settlement as a step toward a fairer distribution of these revenues, marking a shift toward the professionalization of college sports and providing an opportunity to balance economic benefits with the educational values of college sports.
