OAKLAND, California – In a significant ruling on Friday, a federal judge approved a settlement that could change the landscape of college sports for years to come. U.S. District Judge Claudia Wilken gave the green light to a deal addressing three antitrust cases that will now allow NCAA member schools to directly compensate their athletes. This includes a whopping $2.8 billion damages pool, aimed at benefiting both current and former athletes.
Starting July 1, schools will be able to pay their athletes for the use of their name, image, and likeness (NIL). It’s estimated that this will result in an initial annual payout of about $20 million to $23 million per school. In her 76-page opinion, Judge Wilken concluded that recent adjustments made to the settlement sufficiently addressed concerns regarding roster limits, which had been one of the primary points of contention.
“We could not be more excited for the hundreds of thousands of athletes who will now get to enjoy the tens of billions of dollars in new compensation and benefits that the settlement will provide,” said Steve Berman, a lawyer representing the plaintiffs. He described it as a historic day for college sports and the rights of athletes.
The financial framework under this settlement will see schools limited to spending 22% of specific revenues from Power Five conferences on athlete NIL payments. Interestingly, payments are expected to grow yearly, with projections estimating a total of at least $19.4 billion over the next decade.
The agreement resolves multiple lawsuits involving the NCAA and the Power Five conferences, and includes provisions to compensate athletes who missed out on NIL contracts. Those athletes who began their college careers between 2016 and September 15, 2024 will be eligible for these compensations. The NCAA plans to fund this damages pool primarily through new revenue and cost savings.
NCAA President Charlie Baker emphasized that this settlement opens a pathway for stability in college sports. The announcement also revealed the creation of the College Sports Commission, a new entity that will enforce compliance with the settlement.Judge Wilken’s ruling came after her review of various objections to the agreement, many of which she ultimately overruled.
As part of this new framework, the prior system of team-by-team scholarship limits has been eliminated, which means schools can expand the number of scholarships they offer, although they may need to trim roster sizes in some sports.
With the aim of protecting current student-athletes, the settlement allows schools to designate certain athletes—referred to as Designated Student-Athletes—who could be exempted from these roster limits. However, this option does not mean that schools are obligated to keep all their current athletes.
As this new chapter in college athletics begins to unfold, there is already expected backlash, with some objectors set to appeal the ruling. An appeal must be lodged within 30 days of the decision, indicating that while progress has been made, the conversation surrounding the rights of college athletes is far from over.
