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As part of a US$2.75 billion class action settlement struck in May 2024 between former student-athletes and several dozen universities involved in big-time sports, schools will be allowed to pay future players with something more than scholarships. They can give them cash.<\/p>\n
That\u2019s about all we know. The rest is uncharted territory. There are many more questions than answers.<\/p>\n
In\u00a0House v NCAA<\/a>, about 14,000 former college athletes enrolled between 2016 and 2020 sued over lost opportunities and profits in the era before 2021. That\u2019s the year that the NCAA changed its rules to permit active student-athletes to make money off their name, image and likeness \u2013 referred to as NIL.<\/p>\n The plaintiffs in House argued that they, too, should have been permitted to profit off their NIL and sued for a share of money that schools and leagues made off them.<\/p>\n The\u00a0NCAA is settling the lawsuit<\/a>\u00a0by promising to pay $2.75 billion out over the next 10 years. Also, the league will allow the 57 universities that make up the Power Five \u2013 that is, the Atlantic Coast, Big Ten, Big 12, Pacific-12 and Southeastern conferences \u2013 to spend roughly $20 million a year paying student-athletes.<\/p>\n As\u00a0professors<\/a>\u00a0of\u00a0sport management<\/a>\u00a0at the University of Michigan, we predict a complicated road of controversy and further litigation ahead. A federal judge must still sign off on this deal, and that could take months.<\/p>\n \u201cThis landmark settlement will bring college sports into the 21st century, with college athletes finally able to receive a fair share of the billions of dollars of revenue that they generate for their schools,\u201d Steve Berman, a plaintiff attorney,\u00a0said in a news release<\/a>.<\/p>\n Still, the future in this unprecedented new world of paid student-athletes is impossible to know. In fact, the actual settlement itself has yet to be published.<\/p>\n The answers to these five questions, then, will determine what it all means:<\/p>\n The settlement calls for the NCAA to pay the plaintiffs\u00a040% of that sum<\/a>\u00a0and the schools to handle the remainder. For its part, the NCAA says it will deduct the money from the payments it gives to universities from profits on TV and merchandising deals, among other areas.<\/p>\n That means university athletic departments will receive less revenue and pay out their share at the same time. As a result, they\u2019ll have less money.<\/p>\n Among things we don\u2019t know:<\/p>\n The NCAA\u00a0says<\/a>\u00a0each school has discretion on how to spend that money.<\/p>\n But, presumably, these athletics departments will find themselves in uncharted territory regarding\u00a0Title IX<\/a>, the federal law that guarantees equal opportunity for men and women in college sports. Will schools feel the need to split the financial compensation equally between men\u2019s and women\u2019s sports to avoid running afoul?<\/p>\n Until now, the Title IX balance has been struck by providing equal numbers of athletic scholarships to each sex. Schools will need to find a new balance or risk further litigation.<\/p>\n Again, much remains unclear. Will schools give their allowed spending only to the highest-profile athletes in the highest-profile sports? Or perhaps, in anticipation of stars making big money in NIL deals, they could shower money on student-athletes in less prominent sports.<\/p>\n The agreement in House dictates that the Power Five schools\u00a0share about 22% of revenue<\/a>\u00a0from media rights with athletes \u2013 a portion that has been estimated to be about $20 million per year right now.<\/p>\n Athletes in the NFL and NBA receive about 50% of the sport-related revenues. Will student-athletes settle for less?<\/p>\n Further litigation seems assured. Student-athletes playing now, in the future and even pre-2016 are bound to challenge being bound by a class action lawsuit that did not involve them.<\/p>\n1. What impact will the $2.75 billion payout have?<\/strong><\/h4>\n
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2. How does Title IX play into how athlete pay is spent?<\/strong><\/h4>\n
3. Is $20 million just a starting point?<\/strong><\/h4>\n