The Wild West of name, image, and likeness: Pending settlement will allow schools to pay players

Part 5 in the series "The Wild West of name, image, and likeness."

Do you remember simpler times when collegiate athletes were amateurs who played purely “for the love of the game?"  Not even three years have passed since the landmark Alston case led to the NCAA allowing college student-athletes throughout the country to profit from their name, image, and likeness.  Now, another domino has fallen in the continued evolution of the business of college sports.

The NCAA and its Power Five conferences — the Atlantic Coast Conference, including Notre Dame, the Big Ten, the Big 12, the Southeastern Conference, and the Pac-12 — have agreed to allow member schools to pay players directly for the first time in college sports history.

More specifically, the NCAA and its conferences have agreed in principle to a multibillion-dollar settlement to resolve three pending federal antitrust cases. As part of the proposed settlement, pending court approval, the NCAA will pay more than $2.8 billion in damages over 10 years to past and current athletes. All Division I athletes dating back to 2016 are eligible to receive a share as part of the settlement class. Reportedly, a series of formulas devised by a sports economist will be used to determine how to split the $2.8 billion among more than 10,000 former and current athletes. Some money will be divided evenly among all members, while other portions will be allocated based on each athlete's assessed "market value."

In exchange, the college athletes must drop their complaints in three open cases: House v. NCAA, Hubbard v. NCAA and Carter v. NCAA; and agree not to sue the NCAA for other potential antitrust violations. In addition, the NCAA and its conferences have agreed to a revenue-sharing plan, allowing each school to share up to roughly $20 million per year with its athletes, starting in the fall of 2025. 

 Of course, the agreement does not resolve all pending legal issues that have destabilized the multibillion-dollar industry.  As outlined in Part 4 of this series, athletes are still fighting to be recognized as employees of their schools and find other ways to collectively bargain in the future, which could reshape any prospective revenue-sharing agreement.  Without collective bargaining, which the NCAA and major conferences will continue to resist, the NCAA and conferences will need Congress to act.

According to Notre Dame president, John I. Jenkins, "[t]o save the great American institution of college sports, Congress must pass legislation that will preempt the current patchwork of state laws; establish that our athletes are not employees, but students seeking college degrees; and provide protection from further antitrust lawsuits that will allow colleges to make and enforce rules that will protect our student-athletes and help ensure competitive equity among our teams."

The NCAA and conference leaders have made little progress during the past several years of lobbying politicians on Capitol Hill for a new law that would create a special status for college sports as an industry.

The two biggest questions pending for school officials gearing up for a new business model concern the roles that Title IX laws and collectives will play. Title IX regulations require schools to provide equal benefits and opportunities to men and women in varsity sports. The Department of Education, which oversees Title IX, has not commented on whether schools will have to split payments to athletes equally among men and women to remain compliant.  Collectives have served as a de facto payroll in some places as the NIL market has evolved in the past three years and it is unclear how their influence will change in the future.

As always, McDonald Hopkins will continue to provide updates on this topic as it unfolds.