In a groundbreaking shift for college athletics, schools will soon be allowed to pay athletes directly, following a federal judge’s approval of a multibillion-dollar settlement that reshapes the structure of amateur sports. The decision finalizes an agreement between the NCAA, major athletic conferences, and Division I athletes, bringing an end to years of legal battles over compensation.
The approved settlement resolves three antitrust lawsuits that challenged the NCAA’s long-standing restrictions on athlete pay. Under the terms, the NCAA will pay nearly \$2.8 billion in back damages over the next decade to athletes who competed from 2016 to the present. Beginning July 1, schools may begin issuing payments to current athletes, with an annual cap starting around \$20.5 million per school.
This change builds on the momentum from 2021, when athletes were first permitted to earn money from name, image, and likeness (NIL) deals. Unlike NIL compensation, which came from third parties, the new system enables schools to directly pay athletes, marking a significant departure from amateurism standards.
The NCAA and conferences must now rapidly implement the infrastructure for this new model. A new organization—the College Sports Commission—will oversee enforcement, assuming roles previously held by the NCAA’s central office. The commission recently appointed MLB executive Bryan Seeley as its chief executive officer.
Key rules are also being introduced to curb abuses of booster influence. Deals between boosters and athletes will now require a legitimate business justification. Additionally, schools must navigate new roster size regulations, although protections have been added to ensure athletes aren’t removed solely due to the new limits.
While this settlement resolves major disputes, legal uncertainty remains. Questions about whether college athletes should be considered employees are still unsettled, and leaders continue to press Congress for legislative intervention to stabilize the evolving system.
The first institutional payments are set to begin just weeks from now, marking a historic transformation in how college sports are operated.
Source: ESPN