College athletes are one step closer to pocketing millions of dollars

U.S. District Judge Claudia Wilken issued an order setting a deadline for a settlement that would put millions of dollars in the pockets of college athletes, who can begin seeking payment on Oct. 18.

A final hearing is set for April 7, 2025, the day one of college sports’ biggest moneymakers, March Madness, ends with college basketball’s national title game. If finalized, the deal would allow the largest schools to set up a fund of about $21.5 million in the first year to distribute money to athletes through a revenue-sharing plan. Athletes could still enter into name, image and likeness deals with outside groups.

Former college athletes from 2016 could apply for their share of the $2.576 billion set aside to help them recoup money they might have earned from NIL deals that weren’t allowed until 2021.

“We are excited to be one step closer to a revolutionary change in college athletics that will allow billions in revenue sharing,” said plaintiff attorney Steve Berman.

The judge’s approval comes 11 days after attorneys amended wording in the original settlement agreement to address Wilken’s concerns. The main change involved removing the word “boosters” and replacing it with a more defined description whose potential NIL trades would be subject to oversight by a neutral arbitrator once the trade is completed.

That, however, did not strike at the heart of the agreement, which establishes a revenue-sharing arrangement between schools and athletes who for decades played for scholarships, a few expenses and little else, while coaches and athletic departments brought millions. . The $21.5 million figure comes from 22 percent of the average revenue Electric Conference schools generate through media rights, tickets and other sources. It will be recalculated periodically during the 10-year period covered by the agreement.

Not every school will fully chip. Those rushing to find ways to replace what they will pay athletes. They worry it could impact their overall sports programs, especially the “non-revenue” sports that play a huge role in populating U.S. Olympic rosters.

“We are pleased with Judge Wilken’s decision to grant preliminary approval to the landmark settlement, which will help bring stability and sustainability to college athletics while providing increased benefits to student-athletes for years to come,” said NCAA President Charlie Baker. “Today’s progress is a significant step in writing the next chapter for the future of college sports.”

In addition to creating a payment system, the agreement establishes a framework to regulate future NIL transactions and replaces scholarship caps with “roster caps,” which will rise to 105 for football, the largest sport at most major universities, and also , the sport that brings in the most money while incurring the most expenses.

How those new roster limits and everything else will affect is yet to be seen. Plaintiffs’ attorneys estimated that about 90 percent of the money would go to football and men’s basketball players, whose sports bring in the lion’s share of the revenue. Critics of the settlement suggested it could be a violation of Title IX.

That settlement resolves three major antitrust lawsuits filed against the NCAA, including one brought by Grant House, a former Arizona State swimmer. Berman’s law firm says the value of the new payments and benefits to college athletes is expected to exceed $20 billion over 10 years.

The $21 million the biggest schools will dole out isn’t even 10 percent of the NFL salary cap, but it’s considered a big step forward for college sports, which are undergoing a revolution with an expanded football playoff ( with its $7.8 billion TV deal) and a move related to mega-conferences; The Southeastern and Big Ten conferences now have 34 teams between them.

“For far too long, these athletes have been deprived of their economic rights in an unjust system that will now finally be fundamentally reformed,” plaintiff attorney Jeffrey Kessler said in a press release that was part of court files.

It is not yet known how long the terms of this transaction will last. Disputes over players’ rights to unionize and be considered employees remain unresolved. Meanwhile, the NCAA is pushing for federal legislation to improve a streamlined NIL policy, which is currently governed by a myriad of state laws, statutory regulations and NCAA rules.