SI:AM | What to Know About the Historic NCAA Settlement

College sports are going to look drastically different.

The NCAA's settlement will fundamentally change the college sports model. / Joel Angel Juarez/The Republic / USA

Good morning, I’m Dan Gartland. I really hope college athletic departments don’t fall into the private equity trap. 

In today’s SI:AM: 

🤝Major NCAA news

☘️ Jaylen Brown goes off
📺 Manfred on MLB broadcasts

Plenty of unanswered questions remain

The NCAA and its Power 5 conferences reached an agreement Thursday on a historic settlement that will fundamentally alter the college sports model. 

The settlement has many layers, but the top line is this: It will put an end to the NCAA’s amateurism era by allowing schools to pay players directly for the first time. It’s as major a change to the fabric of college sports as we have ever seen, and it’s going to raise plenty of questions about what the future of the industry will look like. Let’s break down the most important aspects of the agreement. 

What were the lawsuits the NCAA settled?

The settlement will resolve three open antitrust suits: House v. NCAA, Hubbard v. NCAA and Carter v. NCAA. The three cases each raised different challenges to the NCAA model but they shared a common theme: that athletes were being denied ways to maximize their earning potential. But the NCAA is also facing another similar lawsuit—Fontenot v. NCAA—that is not expected to be included in the settlement. The same legal team handled the House, Hubbard and Carter cases, but the Fontenot case is being handled by a different firm. Attorneys on the Fontenot case made a legal filing on Tuesday asserting that they do not want their case consolidated with the other three, according to Yahoo Sports. 

What will the plaintiffs receive in the settlement and who’s paying for it? 

The NCAA and its conferences will pay $2.75 billion in damages over 10 years to the various athletes who joined the three class-action suits. That may sound like an astronomical sum, but it’s a bargain compared to what the NCAA was prepared to pay if the cases had been allowed to go to trial. It was reportedly expecting to pay as much as $20 billion if it lost in court. 

The bill will be split by the NCAA and its member schools. Yahoo Sports previously reported that the NCAA will cover 41% of the costs of the settlement ($1.1 billion), while the schools will cover 60% ($1.65 billion). Of that $1.65 billion, the five power conferences will pay $664 million, while the other 27 non-power Division I conferences will pay $990 million. 

How does this change college sports moving forward?

The biggest change is that NCAA member schools will now be allowed to pay athletes directly through revenue sharing. The agreement establishes a sort of salary cap where schools will be able to pay a maximum of roughly $20 million per year to athletes. (That number was arrived at by taking about 20% of a power conference school’s annual revenue.) The NCAA is expected to replace the current restrictions on the number of scholarships offered with limits on roster size. The settlement will also aim to crack down on the pay-for-play deals from third-party NIL collectives. 

What’s left to be figured out?

Lots. Perhaps the biggest question is how the NCAA and its member schools will square this new model with the requirements of Title IX. 

“If the universities are going to end up exerting control over the revenue sharing,” New York civil rights attorney Iliana Konidaris told the Associated Press, “you’re going to need to address pay equity very head-on.”

The prospect of revenue sharing should also place an increased emphasis on the possibility of college athletes unionizing, since forming a union would allow athletes to negotiate over the percentage of revenue that they receive. 

Another issue the schools will have to resolve is where they’re going to get the money to pay athletes. Schools have grown accustomed to having a free labor force generating millions of dollars for them and funneled those revenues into things like exorbitant coaching salaries and palatial facilities. If they’re instead expected to pay $20 million per year to the athletes who previously received nothing, they’re going to have to change the way they operate. That’s why the private equity vultures are already circling, offering investments to help schools offset these new costs.

Brown led the Celtics to a Game 2 win over the Pacers, scoring 40 points. / David Butler II-USA TODAY Sports

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The top five…

… things I saw last night: 

5. Sabrina Ionescu’s really tough shot. 
4. JJ Bleday’s game-tying home run for the Oakland A’s in the 11th inning. They entered the inning down 9–5 and won 10–9 on a walk-off walk. 
3. The terrible interference call on an infield fly that ended the Orioles–White Sox game. 
2. Jake Oettinger’s stick save to deny Connor McDavid in the first overtime. 
1. McDavid’s game-winning goal less than a minute into the second OT.