Federal judge approves $2.8 billion settlement, paving way for US colleges to pay athletes millions

A federal judge signed off on arguably the biggest change in the history of college sports on Friday, June 6, clearing the way for schools to begin paying their athletes millions of dollars as soon as next month as the multibillion-dollar industry shreds the last vestiges of the amateur model that defined it for more than a century.Nearly five years after Arizona State swimmer Grant House sued the NCAA and its five biggest conferences to lift restrictions on revenue sharing, US Judge Claudia Wilken approved the final proposal that had been hung up on roster limits, just one of many changes ahead amid concerns that thousands of walk-on athletes will lose their chance to play college sports.
The sweeping terms of the so-called House settlement include approval for each school to share up to $20.5 million with athletes over the next year and $2.7 billion that will be paid over the next decade to thousands of former players who were barred from that revenue for years.
The agreement brings a seismic shift to hundreds of schools that were forced to reckon with the reality that their players are the ones producing the billions in TV and other revenue, mostly through football and basketball, that keep this machine humming.The scope of the changes — some have already begun — is difficult to overstate. The professionalization of college athletics will be seen in the high-stakes and expensive recruitment of stars on their way to the NFL and NBA, and they will be felt by athletes whose schools have decided to pare their programs. The agreement will resonate in nearly every one of the NCAA’s 1,100 member schools boasting nearly 500,000 athletes.

The road to a settlement: Wilken’s ruling comes 11 years after she dealt the first significant blow to the NCAA ideal of amateurism when she ruled in favor of former UCLA basketball player Ed O’Bannon and others who were seeking a way to earn money from the use of their name, image and likeness (NIL) — a term that is now as common in college sports as “March Madness” or “Roll Tide.” It was just four years ago that the NCAA cleared the way for NIL money to start flowing, but the changes coming are even bigger.

Wilken granted preliminary approval to the settlement last October. That sent colleges scurrying to determine not only how they were going to afford the payments, but how to regulate an industry that also allows players to cut deals with third parties so long as they are deemed compliant by a newly formed enforcement group that will be run by auditors at Deloitte.

The agreement takes a big chunk of oversight away from the NCAA and puts it in the hands of the four biggest conferences. The ACC, Big Ten, Big 12 and SEC hold most of the power and decision-making heft, especially when it comes to the College Football Playoff, which is the most significant financial driver in the industry and is not under the NCAA umbrella like the March Madness tournaments are.