Here we go: NCAA Agrees to Share Revenue With Athletes in Landmark $2.8 Billion Settlement

The National Collegiate Athletics Association and the five most prominent athletic conferences agreed to a $2.77 billion settlement of a class-action lawsuit on Thursday, ushering in a new era of college sports in which schools can pay athletes directly.

The move marks a dramatic shift for the NCAA, breaking with its century-old stance that college athletes are amateurs and therefore cannot share in any of the money they generate for their universities.

The settlement will resolve a case that began in 2020 and was seeking back pay for athletes who were barred from earning compensation from endorsements, as well as a cut of future broadcast revenues.

It also marks the latest rule the NCAA has been forced to change amid an onslaught of legal challenges in recent years.

First, the NCAA allowed athletes to receive academic bonuses and profit from their name, image and likeness. Now, the biggest domino of all has fallen: For the first time ever, some players are going to be paid directly by their schools for playing their sports—a seismic shift that will completely reshape the business model for the top end of this billion-dollar industry.

The result is the creation of a system that will give Division I schools the ability to distribute roughly $20 million a year to their athletes, said people familiar with the matter. Though a final agreement is likely months away, the NCAA’s willingness to modify its stance on athlete compensation so dramatically—after a century of treating the notion of paying players as an existential threat—signals a landmark shift.

“All of Division I made today’s progress possible, and we all have work to do to implement the terms of the agreement as the legal process continues,” said NCAA President Charlie Baker in a joint statement with the commissioners of the five conferences named as co-defendants in the lawsuit. “We look forward to working with our various student-athlete leadership groups to write the next chapter of college sports.”

Former Arizona State University swimmer Grant House and others had challenged all NCAA restrictions on players earning money from the use of their likeness—including through a share of television revenue—in federal court in California in 2020. He named the NCAA as well as the five richest athletic conferences—the Atlantic Coast, Big 12, Big Ten, Pac-12 and Southeastern Conferences—as co-defendants. The boards of those six entities voted this week in favor of proceeding with a settlement that will likely end his case, along with two other antitrust lawsuits brought by the same legal team, one of them taking aim at the association’s limits on education-related benefits, the other at its ability to restrict compensation at all.

The settlement doesn’t solve all of the NCAA’s most pressing problems, however. The association faces other antitrust cases, and still has three legal challenges looming over whether athletes should be classed as employees. There are also ongoing questions about the NCAA’s ability to maintain competitive balance, as it is regularly sued over its rules, and state laws in about half the country have overridden it on athletes’ ability to profit from their name, image and likeness.

Lawyers for the plaintiffs had been publicly goading the NCAA to settle, saying it was the only way it could avoid enormous damages at trial and a complete loss of control over the future of college sports. By agreeing to resolve one of the biggest antitrust cases it has ever faced ahead of going to trial, the NCAA is overturning more than a century of tradition while avoiding a potentially ruinous financial outcome.

“It’s long overdue and a long time coming,” said Jeffrey Kessler, one of the lawyers representing the plaintiffs. “It’s finally getting really close to a system that, for the first time, will treat the athletes the way they should be treated.”

Some university leaders were less pleased with the outcome. “The settlement, though undesirable in many respects and promising only temporary stability, is necessary to avoid what would be the bankruptcy of college athletics,” said Notre Dame president Rev. John Jenkins in a statement.

The settlement comes with major financial ramifications for all of the NCAA’s members—both the richest conferences that were named as co-defendants in the class action lawsuit and the smallest leagues that rely on disbursements from the NCAA to help fund their athletic programs.

According to people familiar with the matter, there are two components to the tentative agreement. First, the NCAA has agreed to pay $2.77 billion in damages over a 10-year period. It is not clear how this sum will be distributed, though most is expected to go to football and men’s basketball players from the top five conferences.

The NCAA is funding the damages through two mechanisms. The association will fund approximately $1.2 billion of the damages from new revenue sources and savings accrued across the length of the settlement, according to a person familiar with the matter. To cover the balance, roughly $160 million per year, the NCAA will reduce its member disbursements on a proportional basis.

This has become a sticking point for many of the smaller conferences, many of which don’t sponsor big time football, and rely on the NCAA distributions to fund a larger portion of their athletic departments than powerhouse Division I schools. Several conference commissioners believe it is unfair that they have to bankroll damages that will mostly go toward former athletes from more lucrative conferences.

Second, the NCAA will allow schools to pay athletes a portion of the revenue they help generate. Among the schools that compete in the most deep-pocketed conferences, there exists large variance in total athletics revenue. At the top end, schools like Ohio State and Texas pull in north of $250 million per year; on the flip side, Washington State generates roughly $80 million, according to Education Department data.

To account for this discrepancy, the settlement agreement calls for schools to pay athletes 22% of the average annual athletic department revenue among schools in the top conferences. According to people familiar with the matter, that figure is roughly $20 million per school.

The settlement doesn’t lay out how schools should distribute this money to their athletes. It is possible that the teams that generate the most revenue—football and men’s and women’s basketball—would receive the most. However, several legal experts have suggested that such a model might violate Title IX, the federal statute that calls for schools to provide equitable opportunities, scholarships and benefits to male and female athletes.

The revenue sharing model proposed in the settlement agreement differs from that of professional sports leagues in an important way: it is unilateral. In major American sports, there are players’ associations that collectively bargain with league owners to determine what goes into the pool of revenue and how that money is split up. There is no parallel body in college athletics to represent the interests of athletes.

It is not clear if athletes could collectively bargain with the NCAA if they don’t first become employees, a designation the association adamantly opposes.

Several steps remain before the settlement could be certified by U.S. District Judge Claudia Wilken. People familiar with the matter predicted that the soonest it could take effect would be the 2025-26 academic year.

NCAA Agrees to Share Revenue with Athletes in Landmark $2.8 Billion Settlement - WSJ

So if you are in a P4 school you will be spending a lot of money with more revenue on the horizon.

Everyone else…I guess they can start looking to repurpose their athletic facilities.


A variety of reactions to this:

  • teenage athletes making more money than many of the fans will be hard to go down. But they’re only employees for a short time, like temps.
  • if Wazzu was pulling in $80M, with Ohio State at $250M, Utah is somewhere in between, maybe $140M. We’ve always recruited players with a chip on their shoulders, so we probably stay around where we’ve been.
  • This may put public pressure on the non-revenue sports if Title IX forces women’s cross country athletes to be on par with FB players and gymnasts. Are challenges to Title IX over the horizon?
  • Because athletics is a giant marketing engine for universities… they really are like employees.
  • Since the U has been smartly run, our ability to offer salaries over our weight should help,
  • NIL has created inequalities within teams that complicate team morale. Salaries would soften some of that.
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Thinking through this mess, I believe it is fair to say when intercollegiate athletics dies this case will be cited as the watershed point.

Many of the institutions didn’t think this settlement through very well. Unless there is an act of Congress approved to shield and maintain the deductible tax exempt status of CC and other like sub organizations of the university, fund raising just became impossible.

Donating money to pay paid athletes (employees) to perform? Add to it the fact many of these athletes will be making more than the fans watching them and you’ve got a BIG problem. A REALLY BIG PROBLEM.

Using student fees to fund the now professional athletics program? If I were a student, I would gladly join a class action to eliminate the fee.

Foreign Athletes will need to get green cards to participate and receive their employee benefits. Unless INS is able to get congress to pass a special classification for these student athletes, there is no way the system will be able to find a way to support this brave new world. How screwed up hard is this? Ask the MLB, MLS, NBA, NFL, and NHL. At least with NIL the kid could sign an agreement with a company in their home country and get paid.


Great thoughtful responses so far in this thread. Billions of dollars have been made on the backs of these young people for the last several decades and they deserve to be compensated, but as the article says, this destroys any vestige of “amatuer” sports. No more, “they’re just kids”, they are paid employees.

Considering our current Supreme Court, it wouldn’t surprise me to see Title IX overturned, destroying women sports. I agree that if I was still a student I would be really mad about athletic fees.

I haven’t watched professional sports in years because of the money and attitudes involved. I love the U of U and Utah Football, but all these changes (NIL, destruction of PAC12, etc) because of money are really having a negative effect on my fandom.


+1 to this


The Josh Pate interview from a month or two ago addressed this, sort of.

There’s nothing to prevent other parties from pummeling the NCAA and schools with additional lawsuits. To address this, the NCAA and schools need to approach Congress to get some sort of anti-trust protection.

Considering the have & have-less nature of the current P4 conferences, Pate believed what we’re seeing now may accompany additional realignment into a smaller number of super-conferences.

Broaden the club, including revenue sharing within the top conferences. But why is Arkansas in the club when Utah, Arizona and Colorado are not?

My thought - to get anything through congress, they’ll need a larger geographic footprint in this realignment to get agreement from more US Senators. Nothing will get through Congress considering just the current P2 conference footprints.

The entire Mountain Time Zone as a flyover section of the highest level of CFB? Not conducive to getting something through Congress.

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How is it manifesting?

Should this be a concern of the federal government?

To get some kind of protection to block endless lawsuits, yes.

Pate’s speculation was after 1-2 years of getting things better settled, the conferences would approach Congress: “We got our act together, now we need your help to stabilize this”.

My hunch / hope is the parties at the highest level of CFB would need to expand the club to get enough support in Congress.

I am not someone who would ever initiate a lawsuit, nor do I support the legal system, in general.
Nonetheless, why do you feel that the federal government should spend time helping a sports program avoid paying people what they deserve?

For me, it isn’t about the paying as much as how Universities have structured all sorts of charitable donation fund to cover the costs of athletes scholarships and other expenses. At a minimum, there has been a psychological “wall” in place that facilitated and promoted donations to these funds. The wall was amateur athletics in pursuit of higher education. Once these kids are getting paid as University Employees, it will be damned hard to make a case that any donation to Crimson Club or the Crimson Collective is “Charitable” and still tax deductible.

If scholarships are still given, how will they be treated to tax purposes? The tuition, fees, and books component is probably still shielded from being counted as income. Meals and housing might pose a problem - triggering a need to pay taxes on the receipt of those (it also depends on how the University monetizes those pieces). Non-money “Stuff” received through NIL is likely tax problematic, too.

The employee compensation package is easy for the University and the Athlete to manage; but NIL is a totally different horse (as some kids out there are getting a rude awakening on right now). Depending on how an Athlete sets up an NIL deal, it is likely they will be responsible to pay self-employment tax on monies they receive from the deal. Those who are “tax smart” will be able to navigate through this with their parents. Those who are using agents should be able to deal with it, too; but will be paying the agent to do it for them. Some will make the mistake of not paying the tax and will get into a lot of trouble. Yes, it’s not any different than what happens in the real world, but falling into this trap when the ink on your high school diploma hasn’t even dried yet…and who ends up being responsible for this happening? (Yes the “Blame Game” will play out here)

Again, it’s a big step from a student visa to a Green Card. Will Congress up the cap on Green Cards to cover the increase? Given the current course of public opinion, it is unlikely.

I firmly believe the NCAA and P4 “thought” they were resolving this on the “cheap.” I am afraid it might turn out to be far more expensive and messy than any of them could’ve conceived in their calculations.

It may be the cheapest new expense the U has will be flying to Morgantown or Orlando. Some of these other issues may irreparably damage revenues - even if we start making B1G / SEC type money.

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I am very excited about games in Morgantown.
The Big 12 is going to be enjoyable, kids.

Is this the case now? Is a gift to the alumni association a charitable donation?
If so, do you get extra charity tax points if you provide a donation to an agency serving those in need?

I’m certainly not an immigration expert, but we have a lot of J-visa students who have jobs at the university. There are sometimes restrictions on hours and pay, it’s certainly not the H1-B that is so coveted - and politically toxic - but there is some leeway, I believe.

For that matter, H1-Bs are more restrictive than many people realize - they’re employer sponsored. If the company folds or there is a RIF, that person has a short amount of time to find a new sponsor / employer, otherwise they have to leave. I have a coworker whose spouse got caught in that squeeze, they were looking at moving back to India, or do the split-location marriage thing for a while… which is surprisingly common.

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An excellent point. Along those same lines, I wonder what will happen to graduation rates?


My inner cynic is skeptical. Will the senators and congressional reps from Alabama, Ohio, Texas, Florida, Kansas, Oregon, Washington, North Carolina–well, any state that is home to the power basketball schools, or is in the Big10 and SEC footprint–support anything like that?

If it gets to the point where Congress gets involved, maybe graduate rates could be a stipulation, a compliance point?

That would be a decent outcome. That might help restore just a little faith in college athletics.


The only thing interesting about going to Morgantown is that Fallingwater is not too far away. That is it. Big 12 destinations are mostly a total snoozefest otherwise.