NCAA Faces $3 Billion Antitrust Settlement, Seeks Federal Protection

The NCAA and major college conferences consider a $2.9 billion antitrust settlement, which could require schools to pay athletes $30 million annually. The settlement would challenge the traditional amateur model and influence the debate on fair compensation for student-athletes.

Salman Khan
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NCAA Faces $3 Billion Antitrust Settlement, Seeks Federal Protection

NCAA Faces $3 Billion Antitrust Settlement, Seeks Federal Protection

The National Collegiate Athletic Association (NCAA) and major college conferences are considering a potential antitrust, settlement of an antitrust lawsuit, House vs. the NCAA, which could cost them $2.9 billion in damages over 10 years. The lawsuit, brought by former Arizona State swimmer Grant House, contends that college athletes should receive a cut of the billions of dollars in media rights fees that go to the power conferences and the NCAA, dating back to 2016.

Why this matters: This settlement, cost, billion, plan, pay, athletes has far-reaching implications for the future of college athletics, as it challenges the traditional amateur model and could pave the way for college athletes to be recognized as employees. The outcome of this case will also influence the ongoing debate about fair compensation for student-athletes and the role of the NCAA in governing college sports.

The potential would require schools in the Big Ten, Big 12, Atlantic Coast Conference, and Southeastern Conference to pay about $30 million per year, with $20 million annually directed to their athletes. The NCAA board of governors and the presidential boards of each of the four conferences must approve the conditions of an agreement. U.S. District Judge Claudia Wilken ordered the sides to attempt to settle the case months ago, and a more developed article emerged from a meeting of NCAA and conference officials in Dallas last week.

The NCAA is facing several other challenges to compensation and transfer rules, but House has become a catalyst for action. Even with a settlement, the NCAA and major conferences may still need federal protection to prevent more challenges, as college athletes may still be classified as employees. NCAA President Charlie Baker and others have shifted their focus to trying to prevent college athletes from being deemed employees.

Tulane sports law professor Gabe Feldman stated, "In terms of their legal options, one is to go to Congress, two is to recognize the athletes as employees and enter collective bargaining agreements, the other one is to try to operate in a way that is more defensible under the law." article also noted, "It's hard to ask Congress to protect something that so many see as exploitative."

A revenue-sharing agreement or substantially increased payments to college athletes on top of scholarships seems inevitable. NCAA President Charlie Baker proposed creating a new tier of Division I in which schools would be required to pay at least half their athletes $30,000 per year in trust funds. A recent ruling from a National Labor Relations Board regional director article paved the way for members of the Dartmouth men's basketball team to vote to join a union.

The potential $2.9 billionarticleand the ongoing legal challenges underscore the mounting pressure on the NCAA to reform its model and provide fair compensation to college athletes. As Feldman noted, the NCAA may need to fundamentally change how it operates or seek intervention from Congress to avoid furtherlitigation. The coming months will be pivotal in determining the future landscape of college sports and the rights of student-athletes.

Key Takeaways

  • NCAA and major conferences consider $2.9 billion antitrust settlement over 10 years.
  • Settlement would require schools to pay $30 million/year, with $20 million going to athletes.
  • Outcome could pave way for college athletes to be recognized as employees.
  • NCAA faces multiple challenges to compensation and transfer rules.
  • Reform or Congressional intervention may be necessary to avoid further litigation.