Key takeaways
- On May 23, 2024, the NCAA and the Power 5 conferences released a joint statement announcing a $2.8 billion settlement that was reached in the class action lawsuits House v. NCAA, Hubbard v. NCAA, and Carter v. NCAA.
- These cases brought antitrust challenges against the NCAA concerning compensation and benefits limits and NIL regarding student-athletes.
- The settlement eliminates prior NCAA rules banning direct payment to athletes from schools, and more.
- The settlement will have immediate impacts on recruiting, collectives, Title IX compliance, state laws, sports programming, and wealthier schools being able to recruit better talent.
On May 23, 2024, the NCAA and the Power 5 conferences (the ACC, Big Ten, Big 12, Pac-12 and SEC) released a joint statement announcing a $2.8 billion settlement that was reached in the class action lawsuits House v. NCAA, Hubbard v. NCAA, and Carter v. NCAA. These cases brought antitrust challenges against the NCAA for its limits on compensation and benefits that student-athletes receive, including the monetization of their right of publicity (i.e., their name, image, and likeness (NIL)).
Under the reported settlement terms, student-athletes will receive $2.8 billion in back-pay damages over the course of ten years. The NCAA plans to cover this cost by reducing distributions to schools, tapping into reserve funds, and seeking coverage from its insurance carriers. Universities are currently evaluating the implications of the ruling, including how they will manage their budgets, and future payments to student-athletes.
The NCAA’s long-standing business model prevented universities from sharing revenue with their student-athletes. This settlement, however, eliminates the NCAA’s prior rules banning direct payment to athletes from schools. It also allows, but does not require, revenue sharing between universities and current student-athletes. If approved by the United States District Court for the Northern District of California, the settlement would allow universities within the Power 5 to share up to 22% of their revenue with student-athletes, which is tens of millions of dollars per school, per year. The settlement also eliminates the NCAA rules capping student-athlete scholarships.