NCAA settlement tees up big compensation changes

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College sports are entering a new era—again. On Friday, a federal judge approved a multibillion-dollar settlement that brings an end to a five-year legal journey launched by former student athletes to recover lost revenue opportunities. As of July 1, the way is clear for colleges to share revenue with student athletes directly. The landmark deal, which settles three lawsuits filed against the NCAA and its five biggest conferences, establishes a new compensation framework that aims to give Division I student athletes a bigger piece of the pie they helped bake. NCAA President Charlie Baker calls it a “new beginning” for college sports. A long time coming: The NCAA spent decades protecting its amateur model, but in recent years—as legal challenges piled up—it loosened regulations to allow athletes to benefit from their name, image, and likeness (NIL). This settlement, however, introduces many new terms of engagement between the NCAA and its athletes: Each participating DI school will get a salary cap for student athletes. It’s set at $20.5 million for the upcoming academic year and will increase over time. The deal doesn’t specify how much each sport should get. Nearly $2.8 billion will be paid out to athletes who played in the pre-NIL era and lost earnings opportunities as a result. Schools will have roster limits for each sport, rather than scholarship limits. That leaves little room for walk-ons. Sorry, Rudy. The full court press continues: The new NCAA payment framework clears up a lot of questions, but the potential for legal drama isn’t over. It’s unclear whether the money will have to be distributed evenly among male and female athletes, which could draw Title IX scrutiny.—BC