NCAA reaches historic agreement to pay billions to US college athletes | Sports

U.S. college sports are extremely popular and generate billions of dollars in revenue. Until now, however, athletes have only received a fraction of the revenue that comes from full stadiums and arenas and huge television audiences. On Thursday, the NCAA, the governing body of college sports, and its partners in the major leagues signed a historic agreement that will pay athletes billions, the parties announced.

The settlement, which still needs to be approved by a federal judge, ends a series of class action lawsuits filed by athletes seeking retroactive compensation for their services and accusing the NCAA of abusive monopoly power. It also provides for revenue sharing for players, paving the way for a degree of professionalization in college sports, particularly in American football and basketball, the two sports with the most fans.

According to the law firms Hagens Berman and Winston & Strawn LLP, which represent the plaintiffs, the settlement will radically change the economic model of college sports and provide college athletes with billions of dollars in damages and tens of billions in future profit sharing.

The out-of-court settlement was reached between the plaintiffs, the NCAA and the five major college sports associations (Big Ten, SEC, Pac-12, Big 12 and ACC, known as the Power 5, which includes 69 prominent universities). The settlement ends three pending antitrust litigation (House of Representatives vs. NCAA, Hubbard vs. NCAA And Carter vs. NCAA), which challenged the NCAA's caps on the compensation and benefits that college athletes can receive for their athletic performance and for the rights to their name and likeness.

The college sports organizations have agreed to pay more than $2.75 billion in damages to approximately 14,000 former and current college athletes over a 10-year period. In addition, the settlement eliminates certain NCAA and conference rules that prohibit direct payments from universities to athletes. The agreement also allows schools to share revenue directly with college athletes.

Although the exact details have not yet been announced, each university will be eligible to receive 22% of the average Power 5 university's revenue in the first year of the agreement, currently estimated at well over $20 million per year per university. These new payments and benefits are in addition to the scholarships, third-party image payments, health care and other benefits college athletes already receive. Universities can apply the new payments and benefits to athletes in any sport. The agreement also removes the NCAA's scholarship caps to open the door to more opportunities in all sports.

The value of the new benefits and payments that can be provided to college athletes under the agreement will increase each year in line with rising revenues from college sports. Attorneys estimate that the total value of new payments and benefits for college athletes over the 10-year term of the agreement will exceed $20 billion, making it one of the largest collective antitrust settlements in history, according to Hagens Berman and Winston & Strawn LLP.

U.S. college sports already attract talent from around the world through scholarship programs and benefits, as well as a gateway to professional competition, but this windfall could further increase the appeal for young college athletes from around the world to compete in the NCAA.

The debate over college profit sharing even reached the U.S. Supreme Court, which rebuked the existing system in a case involving educational benefits. “The bottom line is that the NCAA and its member colleges are depressing the salaries of student athletes who together generate billions of dollars in revenue for colleges each year,” said Justice Brett Kavanaugh.

“This groundbreaking agreement will bring college sports into the 21st century. College athletes will finally receive a fair share of the billions in revenue they generate for their schools,” said Steve W. Berman, managing partner and co-founder of Hagens Berman.

Representatives of the NCAA and the five major leagues issued a joint statement. “The five autonomy conferences and the NCAA's agreement to the terms of the settlement are an important step in the ongoing reform of college sports that will benefit student-athletes and provide clarity in college sports across all divisions for years to come,” it said. “This settlement also provides a roadmap for college sports leaders and Congress to ensure that this unique American institution can continue to provide unmatched opportunities to millions of students.”

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