NCAA’s Multi-Billion Dollar Settlement Means Schools Can Now Pay College Athletes

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Written By Giovanni Shorter | Last Updated
NCAA Student Athlete Settlement
Credit: Associated Press

The NCAA and its five power conferences have voted to approve a settlement agreement. This agreement will allow certain colleges and universities to pay student-athletes directly.

Close to $2.8 billion in damages will be distributed to the plaintiffs if approved by a federal judge.

Details Of The $2.8 Billion NCAA Settlement

Former student-athletes sued the NCAA in the House v. NCAA case. The former players argued they were not properly compensated for their name, image, and likeness (NIL) during television broadcasts. Since June 2021, student-athletes have been allowed to make money on their brands, which was previously against NCAA regulations. However, under current NIL rules, they are not entitled to a portion of ticket sales or broadcast revenue.

The result of the House v. NCAA case is a new revenue-sharing agreement that will change that. Student-athletes at power-conference schools can now be compensated for broadcast deals, ticket sales, and sponsorships. This will allow players to get paid directly from their schools without violating NCAA rules.

Revenue sharing will be optional for these programs and could start as early as next year. The new rules allow for 22% of the school’s average yearly revenue to be distributed back among student-athletes. For most of these schools, this is around $20 million annually.

In addition, the settlement will bring about two more new changes: the end of scholarship caps and the start of roster limits.

The NCAA and conferences have agreed upon the initial terms of the settlement agreement. The plaintiffs and a federal judge will need to give final approvals. If approved in the coming weeks, the revenue-sharing program could start in the 2025-2026 season.

How This Affects College Sports Odds

This settlement could have a major impact on college football betting and college basketball betting, among other sports. Talent recruiting may be swayed by how much a given program brings in through broadcast deals and sponsorships. The more prominent programs will see yet another edge in recruiting.

This differs from NIL, which mainly benefited star players likely to snag a hometown commercial or brand deal. Now, student-athletes of all degrees of stardom can get a slice of the pie. How will this affect smaller programs in maintaining their talent? A multi-year player could be swayed to hit the transfer portal to a bigger program in order to get paid before they graduate.

Would you rather be the star player at a smaller school, bringing in less cash, or warm the bench and collect a cut of higher ticket sales and broadcasting fees at a popular powerhouse?

Photo by Associated Press