NCAA Agrees to Settle Lawsuit and Pay Billion to Student Athletes

A federal judge has signed off on an agreement between the NCAA and three separate lawsuits at the heart of compensating student athletes.

NCAA Pays Billions

After striking a deal about a year ago, the agreement needed the blessing of a federal judge to make it legal, and the parties got just that last week. Judge Claudia Wilken put her pen to paper and signed off on a $2.8 billion settlement over 10 years that will cover student athletes who competed in college athletics beginning from 2016 through the present.

New Salary Cap and Oversight Body

As an offshoot of the deal, each college will have a $20.5 million salary cap that will increase each year for 10 years. There is also a governing body being established called the College Sports Commission (CSC) that will be tasked with providing regulation and enforcement of the new rules, and the department will be headed by Bryan Seeley, a senior MLB executive and former federal prosecutor.

“It’s historic,” former college basketball star Sedona Prince, one of the co-lead plaintiffs in one of the lawsuits, stated. “It seemed like this crazy, outlandish idea at the time of what college athletics could and should be like. It was a difficult process at times … but it’s going to change millions of lives for the better.”

Competitive Landscape

The agreement is primarily focused on athletes who toiled for the Power 5 conferences, now Power 4. The Ivy League, for instance, has opted out of the salary cap stipulation, as can any college that sees fit. However, in the highly competitive world of top-tier football and basketball, schools will need to pay for talent if they are to compete.

The school’s salary to their athletes is expected to mitigate some of the booster’s influence that has been linked with shady backroom deals that pay money to athletes for ostensibly business purposes, but the only business is playing ball for the booster’s school.

Baker the Pragmatist

Charlie Baker, the NCAA president, has been a realist regarding the way big-time college athletics are changing. He has vowed to change right along with the times, whether that’s protecting the student-athletes from harassment of disgruntled bettors or negotiating a deal for $2.8 billion as back pay for student athletes who made beaucoup money for the school without earning any direct salary of their own.

Baker’s Rationale

Last year, Baker expressed his rationale for accepting the deal with a reporter and stated, “I think the status quo has created over the years, maybe even over decades, a lack of stability and predictability for just about everybody who’s involved in college sports, at least at the highest level.

“And I think for us, finding a way out of that status quo and creating what I would describe as some predictability—especially for Division I and for the schools—and also a better way, in our view, to support student athletes by establishing this kind of a legal framework that can be monitored and enforced, it basically gives the NCAA and its membership 10 years to pay off the back damages. And also, to some extent, it binds us all together over that 10-year period to work together, to follow through on it,” he said.