NCAA Member Schools will be able to compensate players in all sports starting July 1, according to approval issued by US District Judge Claudia Wilken.
Latest NCAA settlements to allow university athletes to share revenue
USA Today Sports ‘Steve Berkowitz discusses the latest on the refusal of judges who refused to approve an NCAA settlement that allows university athletes to share revenues
Sports Pulse
The federal judge gave final approval to settle three antitrust cases addressing compensation for university athletes on Friday, ending prolonged legal debate, leading to an extraordinary era that allows NCAA member schools to pay athletes directly and provide a $2.8 billion loss pool for former and current athletes.
According to approval issued by District Judge Claudia Wilken of Oakland, California, schools can compensate athletes for the use of all sports names, images and likeness throughout the expected annual annual allocation. The changes are set to take effect on July 1st.
In his 76-page opinion, Wilken determined that the recent changes the principal made in including roster restrictions were sufficient. And, continuing to do what she said a few weeks ago, she dismissed other wide range of objections raised to the settlement, including those related to Title IX and future athlete rights over the 10-year run of the settlement agreement.
“We couldn’t be more excited for the hundreds of thousands of athletes who will be able to enjoy billions of dollars in the new compensation and benefits the settlement offers,” Steve Berman, the plaintiff’s lawyer, told USA Today Sports. “It’s a historic day for university sports and athlete rights.”
The total allocation of total payments to school athletes is derived by a 22% cap on the total total of a specific revenue for the Power Five Conference School. The dollar amount is set to increase each year, and plaintiffs’ economic expert Dan Rusher estimated that these payments totaled at least $19.4 billion in a 10-year settlement.
The agreement resolves lawsuits involving the NCAA, the NCAA of Power Five Conferences and Lawyers for Plaintiffs. This offers transactions that include damage pools as well. Athletes who have started their college careers between 2016 and 15 September 2024 are eligible for compensation.
Damages will come from the NCAA. This comes from the association’s central office through new revenue, cost savings and reserves. The rest comes from a reduction in the NCAA distribution to Division I members, with about a quarter of the Power Five Conferences members receiving them.
“When the NCAA approves the contract reached, the settlement’s defendants’ meeting and student-athletes pave the way for stabilizing university sports,” NCAA President Charlie Baker said in a statement. “This new framework that will allow schools to provide direct financial benefits to student-athletes and establish clear and specific rules for regulating third-party NIL contracts represents a major step forward for university sports.”
Less than two hours after Wilken announced her ruling, the meeting announced the creation of an entity called the College Sports Commission, which is responsible for school implementation, supervision and compliance with integration. “The committee will investigate potential violations of these rules, make decisions regarding potential violations of these rules and penalties, provide notice and opportunity, participate in the arbitration process and ultimately manage penalties for violations of these rules,” the announcement said.
Brian Seeley has been appointed chief executive of the committee. He recently served as executive vice president of Law & Operations in Major League Baseball. Seely was also an assistant US lawyer in Washington, DC.
During the process of confirming the settlement, Wilken challenged widely in person and in writing. It is expected that there will be some opponents who are pleading for her approval. An appeal must be made within 30 days of the decision.
Another deep shift in college sports, for schools that chose to pay NIL athletes, the settlement is implementing roster caps in NCAA sports, eliminating the current system of per-team scholarship restrictions. This gives schools the opportunity to expand the total number of scholarships they can offer, but could force some sports to size traditional rosters.
Citing Rasher’s estimate, Wilken writes that the elimination of scholarship restrictions could make more than 115,000 additional scholarships available to Division I athletes.
Including roster restrictions was the target of several opponents of the contract, citing the possibility that thousands of walk-on athletes and current high school recruits would lose their position on the Division I team. Wilken delayed final approval of the settlement on April 23rd due to concerns about how it would affect those people.
The principal revised the settlement in early May to address the issue. They wrote that they had the option of exempting athletes who were on the roster from 2024-25 and agreed to a setup that depended on whether they were removed from 2025-26 due to restrictions on the rest of their college career. The school will also be able to accommodate the “employed or guaranteed” high school seniors who are listed on the roster of the Division I schools for grades 2025-26. These athletes should be identified as “designated student-athletes” by the school.
However, this did not remove the roster limit from the settlement. And this did not require the school to keep all their current athletes on their roster – or at any point they would require them to exceed the roster limits. If they carried “specified student-athletes,” they gave them the option to do so.
Opponents argued that this did not resolve the issue raised by Wilken. He writes the group represented by Chicago-based lawyer Steve Moro.
However, Wilken eventually sided along with the principal.
In her ruling, she wrote an amendment. “The roster limits have been voidable any harm that could have been caused to (athletes), and the immediate implementation of the roster limits allowed or was affected to qualify for a roster without a roster limit that would result in obstacles.”
She added, “The amendments to exempt student-athletes designated from the roster limit are more valuable to the team as they are more valuable to the team than to other teams, allowing them to join the team without violating the roster limit.”
Moro and Laura Lusafold, another lawyer who expressed objections relating to the list restrictions, could not immediately comment.