NCAA and Power 5 agree to deal that will allow schools to pay players

NCAA and Power 5 agree to deal that will allow schools to pay players

The NCAA and its five power conferences agreed to allow schools to pay players directly for the first time in the more than 100-year history of college sports.

The NCAA and its leagues are moving forward with a multimillion-dollar deal to resolve three pending federal antitrust cases. The NCAA will pay more than $2.7 billion in damages over 10 years to past and current athletes, sources told ESPN. Sources said the parties also agreed to a revenue-sharing plan that allows each school to share up to about $20 million per year with its athletes.

“The agreement of the five self-governing conferences and the NCAA on the terms of the agreement is an important step in the continued reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics in all divisions in the years to come. future,” said NCAA President Charlie Baker. and the five energy conference commissioners in a joint statement Thursday night.

“This agreement is also a roadmap for college sports leaders and Congress to ensure this uniquely American institution can continue to provide unmatched opportunities to millions of students. All of Division I made today’s progress possible, and we all have work to do. do to implement the terms of the agreement as the legal process continues. We look forward to working with our diverse student-athlete leadership groups to write the next chapter of college sports.”

All Division I athletes dating back to 2016 are eligible to receive a share as part of the deal class. In exchange, athletes cannot sue the NCAA for other potential antitrust violations and withdraw their complaints in three open cases: House v. NCAA, Hubbard v. NCAA, and Carter v. NCAA.

The terms of the agreement must be approved by Judge Claudia Wilken, who is presiding over the three cases. That process is expected to take several months, and sources said the schools will likely begin sharing revenue in the fall of 2025. The NCAA board of governors and leaders from the ACC, Big Ten, Big 12, SEC and Pac- 12 voted to accept the general terms. presented in a 13-page document.

Notre Dame also agreed to the deal as a member of the ACC.

“The agreement, while undesirable in many respects and promising only temporary stability, is necessary to avoid what would be the bankruptcy of college athletics,” Notre Dame President John I. Jenkins said in a statement. “To save the great American institution of college sports, Congress must pass legislation that preempts the current patchwork of state laws; establishes that our athletes are not employees, but students pursuing college degrees; and provides protection against future antitrust lawsuits that will allow universities to create and enforce rules that protect our student-athletes and help ensure competitive equity among our teams.”

The deal does not resolve all of the outstanding legal issues that have upended the business of college sports and destabilized the multibillion-dollar industry. Athletes and their advocates are still fighting to become employees or find other forms of collective bargaining in the future, which could reshape a revenue-sharing agreement. However, this week’s agreement potentially reduces the NCAA’s exposure to antitrust litigation, which has been the most powerful tool in pressuring schools to provide more to athletes.

“We recognize that we are just at the beginning of this whole process,” said Illinois athletic director Josh Whitman, who recently took over as president of the NCAA Division I Council. “There’s a lot to figure out as we try to understand some of the details that we’re putting in place now.”

Steve Berman, co-lead attorney for the athletes along with veteran anti-rust lawyer Jeffrey Kessler, said this week’s settlement feels like a “finish line,” but that the cases won’t be officially closed for several months. Other antitrust attorneys told ESPN that the deal could fall apart if the athletes choose to join a separate, pending antitrust case or if Wilken rejects the terms of the deal. Berman said he remains confident his deal will hold.

“I’m very proud,” Berman said. “This is a revolutionary change that I never thought would happen when I started this. I’m excited for the student-athletes because this will change all of their lives.”

By the end of this week, the parties plan to alert Wilken, who has presided over the most impactful antitrust cases of the last decade, that they will present final details to the court in the next 30 days.

If Wilken approves those details at a preliminary hearing, which will likely occur in July, Berman said the plaintiffs’ attorneys will publish a website and distribute a notice to all players explaining the potential benefits of remaining in the group and the options to object. or opt. out of class.

Class members typically have more than 30 days to object or opt out of a settlement. If players opt out, they will forfeit the money they would receive in damages, but will retain the right to sue the NCAA and their schools in the future for antitrust violations.

There is at least one other pending antitrust lawsuit that is not covered by this week’s settlement. Former Colorado football player Alex Fontenot is suing the NCAA for restricting how he shares television rights revenue with players. The NCAA and attorneys in the House case argued that Fontenot’s claims should be consolidated with the other lawsuits because they are so similar. However, a Colorado judge denied that request Thursday morning.

Garrett Broshuis, Fontenot’s attorney (who helped negotiate a major settlement on behalf of minor league baseball players in recent years), told ESPN that they are closely monitoring this week’s deal. They could consider opting out once they see the terms of the deal, which would make the peace the NCAA and its conferences hope to buy very short-lived.

Berman said he believes the judge in Fontenot’s case could change her mind once the terms of the settlement are approved. She also said she believes many athletes are unlikely to pass up the potential settlement money and take the risk of joining Fontenot’s case.

“Some athletes could receive tens of thousands or more than a hundred thousand (dollars) in the settlement,” Berman said. “They would have to choose and see if they can do better on their own.”

Berman told ESPN that a series of formulas devised by a sports economist will be used to decide how to divide the $2.7 billion in damages among more than 10,000 former and current athletes. He said some of the money will be divided equally among all members, but other parts will be allocated based on the athlete’s market value. Metrics like his career snap count or a player’s star rating in recruiting could determine his pay, he said.

Gathering data to plug into that formula could be a complicated process, and Berman said he hopes schools provide “granular data” rather than requiring players to file claims themselves.

The terms of the agreement provide a 10-year window to pay the $2.7 billion in full. Berman said each player in the class will receive an annual check worth 10% of the money they are owed. He said Wilken will approve how much money will go toward attorneys’ fees.

Several athletic directors told ESPN they are hopeful the deal lays the groundwork for a system in which success on the field depends less on which schools can spend the most money. Sources said some of the challenges to be resolved include figuring out how to distribute revenue-sharing money in a way that meets market needs while also complying with Title IX laws and whether schools can regain control of the market. for college athletes, which has been outsourced for the past three years to boost collectives, which pay athletes through name, image and likeness sponsorship deals.

Berman said the deal includes a “mechanism” that he believes will make it easier for schools to control the market for third-party NIL agreements. He declined to provide further details. Several athletic directors told ESPN this week that they were optimistic but unsure whether the deal would give them enough legal room to regain control.

“I think we have an opportunity right now to really reshape the model in the most meaningful way of our lifetimes, and perhaps the most meaningful way there has ever been,” said Whitman, the new Division I Council president.

Asked if he thought the deal provided the tools the NCAA and its schools needed to regain control of the college athlete market and add stability to the new world of college sports, Whitman said, “We’ll find out.”

ESPN’s Heather Dinich contributed to this report.