Written by 11:01 Business

Are University Athletes About to Earn a Big Payday?

The other shoe has dropped for the N.C.A.A.: That college sports association just agreed to a $2.8 billion class-action settlement that, if approved by a judge in California, would pay student athletes after a century of deeming them amateurs.

It would be the latest step in the N.C.A.A. and its member institutions allowing athletes to make money from sports programs that have made millions for their schools. But experts worry that this latest shift will still create losers — especially schools that don’t have big football or basketball programs.

The proposed settlement has several components:

  • Athletes would be entitled to $2.8 billion in damages over a 10-year period. It’s essentially back pay for name, image and licensing revenue they would have been entitled to before the N.C.A.A. allowed such payouts three years ago.

  • Starting in the fall of 2025, schools could have about $20 million a year to pay their student athletes. How the schools distribute that money would be left up to them.

The N.C.A.A. is hoping to avoid an even bigger hit. Legal experts say the association and the conferences that were named as defendants in the class-action antitrust lawsuit — the Big Ten, Southeastern, Atlantic Coast, Big 12 and Pac-12 — could have faced having to pay $4 billion in damages.

The writing was perhaps on the wall. The N.C.A.A. already allowed so-called N.I.L. payments, giving student athletes a big stream of revenue. And in March, the Dartmouth men’s basketball team voted to unionize, adding potentially more pressure on universities to pay athletes.

Skeptics worry about the potential for unfairness. Will the money go primarily to men’s football and basketball programs, which generate the vast majority of college sports revenue? Will Title IX apply, meaning will the money be split equally between male and female athletes?

Schools that don’t participate in the big football conferences worry that they’re essentially subsidizing the settlement. The 27 Division I conferences that aren’t named in the lawsuit would be required to pay $990 million (through N.C.A.A. distributions from the men’s basketball tournament) over a 10-year period.)

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Last modified: 28 May 2024
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