The Short-Term Future of College Athletics

As Becky Sullivan reported for National Public Radio last week, a judge has now approved a $2.7 billion settlement in a class action, House v. NCAA. The class was certified back in 2023. The settlement provides that colleges and universities can now pay student athletes directly, subject to a salary cap of $20.5 million, rising to $33 million by 2035. The settlement also creates of a pool of $2.75 billion to be distributed among former college athletes who played before 2021 and could not be paid under then-existing rules. With 390,000 members in the class, the median payout would be just over $7000. 

Many questions remain. So many questions. The parties (or some parties) were apparently dissatisfied with the current regime for establishing Name, Image, and Likeness (NIL) deals with college athletes, which led to some athletes (almost exclusively male) earning millions of dollars to play mostly football and basketball. The new settlement is supposed to create a clearinghouse that will review licensing agreements to test whether they represent “fair market value.” What a concept! I have no idea how it would work, but why wouldn’t the price of the contract represent the fair market value? And as to the $2.75 billion, there is no information in the reporting I have seen that indicates how the money is to be allocated. Is a professional football player, who was drafted in the fourth round  bus has since has earned millions over a professional career entitled to more money than a star women’s soccer player who now gets paid $80,000 to coach a college team? 

The other question that lingers in my mind is what becomes of the collectives, about which we have written here and here and here? The settlement caps what colleges and universities can pay directly to students. Does it limit what the collectives can pay? We have been in terra incognita since 2021. I suspect there will be more bumps in the road. Colleges and universities are facing perhaps unprecedented financial challenges. Can they continue to support very expensive athletics programs while being forced to cut academic programs? Time will tell.