College Athletes Can Get Paid by Schools in NCAA Accord (1)

The National Collegiate Athletics Association and its Power Five conferences have agreed to a settlement of nearly $2.8 billion to resolve antitrust litigation, following years of legal fights with student athletes demanding fair pay.

The proposed agreement is an “important step in the continuing reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics across all divisions for years to come,” NCAA President Charlie Baker said in a joint statement with conference commissioners.

NCAA’s settlement, which would pay more than $2.75 billion in damages to college athletes over a 10-year period, seeks to stave off future litigation after the organization was hit with multiple suits alleging the group exploits athletes and prohibits them from using money earned from their images, names, and likenesses.

The suit seeks to resolve three pending antitrust suits, including one brought by college athletes who won class status last year over claims the organization violated antitrust laws by not allowing them compensation for commercial use of their names and likeness. That case was set for trial in January 2025, with the athletes pursuing up to $4.5 billion in damages.

It also would eliminate NCAA and conference rules that prohibit direct payments from schools to athletes and allow schools to share revenues directly with college athletes through new payments and benefits, according to a statement from Hagens Berman and Winston & Strawn LLP, firms representing athlete plaintiffs.

“This 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,” said Steve W. Berman, Hagens Berman managing partner and co-founder. “Our clients are the bedrock of the NCAA’s multibillion-dollar business and finally can be compensated in an equitable and just manner for their extraordinary athletic talents.”

The association, which generates $600 million in annual revenue, has increasingly been the target of both private plaintiffs and federal authorities concerned over the NCAA’s restrictions on NIL and students’ freedom to transfer between schools.

The US Justice Department and several states also sued NCAA over a rule that restricts some student athletes from competing if they transfer between Division I schools.

The case is In re College Athlete NIL Litigation, N.D. Cal., No. 4:20-cv-03919.