What we know and what we don’t know about a historic settlement to pay college athletes

A radical change is coming to college athletics.

The NCAA and the so-called Power Five athletic conferences reached a groundbreaking agreement Thursday that aims to end the century-old tradition of amateurism in college sports by allowing athletes to receive compensation directly from the colleges and universities for which they serve. they play.

The agreement, which is part of a class-action lawsuit known as Home vs. NCAAmust be approved by a federal judge overseeing the case, a decision that could take months.

The proposed regulation has two parts. First, it would distribute some $2.75 billion to athletes who competed before July 2021, when the NCAA first allowed athletes to earn money from their name, likeness and resemblance. Second, it would create a future revenue-sharing model in which schools could each distribute approximately $20 million per year directly to athletes.

But far from closing the door on years of debate and litigation over the issue of payments to student-athletes, the proposed settlement raises an even more set of questions: Which athletes will be compensated? How much will they earn? Will women be paid equally to men? Will schools that are unable to pay their athletes be able to compete with larger, wealthier schools?

“These are very important details that we will have to work out,” said Matt Mitten, a sports law professor at Marquette University. “The settlement is just the beginning.”

Here’s what we know and what major issues remain unresolved.

What would the proposed regulation cover?

In short, the prospective portion of the proposed deal creates a system in which schools that are part of the Power 5 conferences – the Atlantic Coast Conference, the Big Ten, the Big 12, the Pac-12 and the Southeastern Conference, all who voted in favor of the proposed settlement — can pay the athletes.

Each school will be allowed to distribute up to approximately $20 million to its athletes, an amount based on a percentage of the average revenue earned annually by Power Conference programs. This percentage starts at 22 percent and could increase over time. It is expected that other schools, those that do not participate in the Power 5 conferences, will be able to participate.

“This historic settlement will bring college sports into the 21st century, with college athletes finally able to receive a fair share of the billions of dollars in revenue they generate for their schools,” plaintiffs’ attorney Steve Berman said in a statement.

Will all college athletes be paid?

No. Football players and men’s basketball players in major programs are most likely to receive payments. Indeed, most of the revenue generated by university athletics departments historically comes from television contracts for the broadcast of these two sports. Women’s basketball also generates revenue, and those players could receive payments as well.

“It’s going to be up to each school to decide how they’re going to distribute that $20 million. And it’s probably going to vary a lot from school to school,” said Mit Winter, an attorney who has represented conferences, schools and athletes. in various legal issues related to college sports.

Schools will also have the option to pay players in sports that don’t typically generate revenue – such as rowing, football, tennis, track and field and more – but it’s unclear how exactly they will do so. institutions will choose to proceed.

And many schools that aren’t part of major conferences may choose not to pay any players anything, which could eventually open a competitive divide between the haves and have-nots.

As an example, Mitten cited his employer, Marquette, whose men’s basketball teams reached three Final Fours despite lacking a football team and revenue that could more easily fund payments to players.

“How can we maintain parity and competitive balance among the 350+ Division 1 basketball schools when not all of them play football and individually receive millions and millions of dollars from these big TV contracts?” he said.

Will women be paid equally to men?

The proposed regulations mark a new frontier for Title IX, the foundational civil rights law that prohibits discrimination on the basis of sex in educational institutions that receive federal funding.

The legacy of Title IX in college sports has been enormous, as schools are required to provide scholarships in equal proportion to women and men.

Now, schools will have to determine if and how the law applies to income paid to athletes. It will likely be up to litigation to resolve the issue, he said.

“There’s not really a definitive answer on how Title IX is going to apply,” Winter said. “I think some schools will assume that Title IX will make them give 50 percent of that $20 million to female athletes and 50 percent to male athletes. Other schools won’t make that assumption.”

Are the NCAA’s antitrust problems over?

Although the NCAA hopes this settlement will put years of antitrust lawsuits behind it, experts agree on this point: The answer is no.

Of particular concern is the settlement’s cap on payments, which is currently set at 22 percent of the average income earned annually by Power 5 schools. That figure is far lower than the share of revenue paid in professional sports like the NFL and NBA, where players earn about half the revenue.

In these leagues, players have agreed to receive this share of revenue through collective agreements. These employment agreements provide legal protection against individual lawsuits over compensation, Mitten said. But in college sports, where athletes are not considered employees, such bargaining agreements do not exist, meaning the NCAA is still exposed to antitrust litigation.

The NCAA and schools are already lobbying Congress to pass a federal antitrust exemption for college sports that would protect them from future lawsuits over salaries.