College athletics has reached a turning point, when on Friday, June 6, a federal judge approved an unprecedented $2.8 billion settlement that will, for the first time, enable U.S. colleges to compensate student-athletes directly, putting an end to the amateur system that has dominated college athletics for over 100 years.
For centuries, NCAA rules banned universities from paying athletes anything except for scholarships that would cover tuition, room and board. Players were kept from receiving direct financial benefit from their schools for decades, even as they contributed to an industry worth billions of dollars in ticket sales, TV rights, and more.
The ruling comes as a result of three separate lawsuits, with the plaintiff being a class of some 39,000 former and current college athletes, and the defendant being the NCAA and five of its conferences. The approved settlement, which took over a year to negotiate, paves the way for schools to begin paying current players as early as next month. And it includes provisions for backpay for former players who had been left out of the old system.
Though the NCAA had relaxed its rules on name, image, and likeness (NIL) previously as well, this deal goes much beyond that. It is the first time schools can give their players direct compensation, and it marks the end of the era of strict amateurism for the NCAA.
Although the ruling is being hailed as a victory for student-athletes, it also presents new challenges to college programs. Under this new system, colleges will need to work their payroll systems, sort out recruiting inequalities, and budget long-term.
MLB Veteran to Lead New College Sports Watchdog
As a response to this change, an entirely new body, the College Sports Commission CSC, has been established to regulate and manage athlete compensation and NIL enforcement. Bryan Seeley, a veteran federal prosecutor and senior executive with Major League Baseball, has been appointed as the Commission’s first CEO.
Seeley’s legal and sports business experience make him a prime candidate to ride these revolutionary times. The Commission will preside over the writing of new rules of compliance, monitoring financial dealings, and levying recruitment regulations to ensure fair play across college programs.
Big Win, Big Payday: NCAA Lawyers to Share $475M
The lawyers who worked on the case will also receive a considerable share of the payout. They will be paid some $475 million in legal fees, which could increase to $725 million in the next ten years, depending on future developments in the case.
The payment reflects the lawsuit’s stakes and complexity, breaks a long-established system, and sets a legal precedent that will forever shift the paradigm of sports at the collegiate level.