In a move that signals the most significant transformation in the history of American college sports, the National Collegiate Athletic Association (NCAA) and its five major conferences have agreed to a monumental $2.8 billion settlement.
The landmark deal, which resolves a series of antitrust lawsuits, will for the first time establish a framework for schools to directly compensate their athletes, shattering the long-held model of amateurism.
A New Era for College Athletes
The settlement, if approved by a judge, will see the NCAA and the power conferences—including the Big Ten, SEC, and Big 12—pay $2.77 billion in damages over a decade to thousands of former athletes. This compensation is for the alleged loss of earning potential from the previous prohibition on profiting from their name, image, and likeness (NIL).
More importantly, it creates a forward-looking system. From the 2025-26 academic year, a new revenue-sharing model will be introduced, allowing schools to distribute approximately $20 million per year to their athletes.
The End of an Amateurism Era
This agreement effectively brings to a close a contentious period defined by legal battles arguing that the NCAA unlawfully capped athlete compensation at scholarship value. The plaintiffs contended that athletes were denied a fair share of the billions of dollars in revenue generated by college football and basketball.
"This settlement is also a road map for college sports leaders and college athletes to follow," said NCAA President Charlie Baker, acknowledging the need for a new, more equitable structure.
What Happens Next?
The proposal must still receive the green light from US District Judge Claudia Wilken. The new system would also include:
- Direct Revenue Sharing: Schools can choose to allocate a portion of their revenue to athlete payments.
- New Roster Limits: The introduction of new scholarship and roster limits across sports.
- A New Governance Structure: The creation of a new top-level subdivision where these new financial rules will apply.
While this settlement brings clarity, it does not classify athletes as employees, a separate and ongoing legal and political debate. Nevertheless, it marks an irreversible shift towards recognising the financial value that student-athletes bring to their institutions.
