NCAA, leagues back $2.8 billion settlement, setting stage for dramatic change across college sports

The NCAA and the nation's five biggest conferences announced Thursday night that they have agreed to pay nearly $2.8 billion to settle a host of antitrust claims, a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester.

NCAA President Charlie Baker along with the commissioners of the Atlantic Coast Conference, Big Ten, Big 12, Pac-12 and Southeastern Conference released a joint statement saying they had agreed to settlement terms. They called the move "an important step in the continuing reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics across all divisions for years to come.”

The deal still must be approved by the federal judge overseeing the case and challenges could arise, but if the agreement stands it will mark the beginning of a new era in college sports where athletes are compensated more like professionals and schools can compete for talent using direct payments.

“There’s no question about it. It’s a huge quantum leap,” said Tom McMillen, the former Maryland basketball player and congressman who has led an association of collegiate athletic directors the past eight years.

Terms were not disclosed, though some details have emerged in the past few weeks. They signal the end of the NCAA’s bedrock amateurism model that dates to its founding in 1906. Indeed, the days of NCAA punishment for athletes driving booster-provided cars started vanishing three years ago when the organization lifted restrictions on endorsement deals backed by so-called name, image and likeness money.

Now it is not far-fetched to look ahead to seasons where a star quarterback or top prospect on a college basketball team are not only cashing in big-money NIL deals but have a $100,000 school payment in the bank to play.

“This landmark settlement will bring college sports into the 21st century, with college athletes finally able to receive a fair share of the billions of dollars of revenue that they generate for their schools,” said Steve Berman, one of the lead attorneys for the plaintiffs. “Our clients are the bedrock of the NCAA’s multibillion-dollar business and finally can be compensated in an equitable and just manner for their extraordinary athletic talents.”

There are a host of details still to be determined, but the agreement calls for the NCAA and the conferences to pay $2.77 billion over 10 years to more than 14,000 former and current college athletes who say now-defunct rules prevented them from earning money from endorsement and sponsorship deals dating to 2016.

“Even though it was only because of the overwhelming legal pressure, the NCAA, conferences and schools are agreeing that college athletes should be paid,” said Ramogi Huma, a former UCLA football player and longtime advocate for college athletes. “And there’s no going back from there. That’s truly groundbreaking.”

Some of the money will come from NCAA reserve funds and insurance but even though the lawsuit specifically targeted five conferences that are comprised of 69 schools (including Notre Dame), dozens of other NCAA member schools will see smaller distributions from the NCAA to cover the mammoth payout.

Schools in the Big Ten, Big 12, Atlantic Coast and Southeastern conferences will end up bearing the brunt of the settlement at a cost of about $300 million each over 10 years, the majority of which will be paid to athletes going forward.

The Pac-12 is also part of the settlement, with all 12 current schools sharing responsibility even though Washington State and Oregon State will be the only league members left by this fall after the other 10 schools leave.

In the new compensation model, each school will be permitted but not required to set aside up to $21 million in revenue to share with athletes per year, though as revenues rise so could the cap.

Athletes in all sports would be eligible for payments and schools would be given the freedom to decide how that money is divvied up among sports programs. Scholarship limits by sport will be replaced by roster restrictions.

Whether the new compensation model is subject to the Title IX gender equity law is unknown along with whether schools will be able to bring NIL activities in-house as they hope and squeeze out the booster-run collectives that have sprouted up in the last few years to pay athletes. Both topics could lead to more lawsuits.

The class-action federal lawsuit at the center of the settlement, House v. the NCAA, was set to go to trial in January. The complaint, brought by former Arizona State swimmer Grant House and Sedona Prince, a former Oregon and current TCU basketball player, said the NCAA, along with the five wealthiest conferences, improperly barred athletes from earning endorsement money.

The suit also argued that athletes were entitled to a piece of the billions of dollars the NCAA and those conferences earn from media rights agreements with television networks.

Amid political and public pressure, and facing the prospect of another court loss that some in college sports claimed could reach $20 billion in damages, NCAA and conference officials conceded on what has long been a core principal of the enterprise: That schools don't directly pay the athletes to play beyond a scholarship.

That principle has been dented numerous times over the last decade. Notably, the Supreme Court unanimously ruled against the NCAA in 2021 in a case related to education-related benefits.

The narrow focus of the Alston case didn't collapse the collegiate sports system, but the strong rebuke of the NCAA's model of amateurism flung the door open to more lawsuits. Justice Brett Kavanaugh, a former Yale athlete, put it bluntly: “The bottom line is that the NCAA and its member colleges are suppressing the pay of student athletes who collectively generate billions of dollars in revenues for colleges every year."

The settlement is expected to cover two other antitrust cases facing the NCAA and major conferences that challenge athlete compensation rules. Hubbard vs. the NCAA and Carter vs. the NCAA are also currently in front of judges in the Northern District of California.

A fourth case, Fontenot vs, NCAA, creates a potential complication as it remains in a Colorado court after a judge denied a request to combine it with Carter. Whether Fontenot becomes part of the settlement is unknown and it matters because the NCAA and its conferences don't want to be on the hook for more damages should they lose in court.

“We’re going to continue to litigate our case in Colorado and look forward to hearing about the terms of a settlement proposal once they’re actually released and put in front of a court,” said George Zelcs, a plaintiffs' attorney in Fontenot.

The solution agreed to in the settlement is landmark, but not surprising. College sports has been trending in this direction for years, with athletes receiving more and more monetary benefits and rights they say were long overdue.

In December, Baker, the former Massachusetts governor who has been on the job for 14 months, proposed creating a new tier of Division I athletics where the schools with the most resources would be required to pay at least half their athletes $30,000 per year. That suggestion, along with many other possibilities, remain under discussion.

The settlement does not make every issue facing college sports go away. There is still a question of whether athletes should be deemed employees of their schools, something Baker and other college sports leaders are fighting against.

Some type of federal legislation or antitrust exemption is likely still needed to codify the terms of the settlement, protect the NCAA from future litigation and pre-empt state laws that attempt to neuter the organization's authority. As it is, the NCAA is still facing lawsuits that challenge its ability to govern itself, including setting rules limiting multiple-time transfers.

“This settlement is also a road map for college sports leaders and Congress to ensure this uniquely American institution can continue to provide unmatched opportunity for millions of students,” the joint statement said. "All of Division I made today’s progress possible, and we all have work to do to implement the terms of the agreement as the legal process continues. We look forward to working with our various student-athlete leadership groups to write the next chapter of college sports.”

Federal lawmakers have indicated they would like to get something done, but while several bills have been introduced none have gone anywhere.

Despite the unanswered questions, one thing is clear: Major college athletics is about to become more like professional sports than ever before.

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FILE - Pac-12 Senior Associate Commissioner Teresa Gould speaks during the conference's basketball media day Oct. 12, 2021, in San Francisco. Gould later became commissioner of the conference. The NCAA and the nation's five biggest conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims,a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester.(AP Photo/Jeff Chiu, File)

FILE - Southeastern Conference Commissioner Greg Sankey speaks during SEC football media days, July 18, 2022, in Atlanta. The NCAA and the nation's five biggest conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims,a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester. (AP Photo/John Bazemore, File)

FILE - Southern California's McKenzie Forbes reacts after being presented the Pac-12 tournament Most Valuable Player trophy by Pac-12 Commissioner Teresa Gould after USC defeated Stanford in an NCAA college basketball game for the championship of the Pac-12 tournament March 10, 2024, in Las Vegas. The NCAA and the nation's five biggest conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims,a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester. (AP Photo/Ian Maule, File)

FILE - Arkansas players run past the Southeastern Conference logo during practice for the 2006 SEC men's basketball tournament March 8, 2006, in Nashville, Tenn. The NCAA and the nation's five biggest conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims,a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester. (AP Photo/Mark Humphrey, File)

FILE - An Atlantic Coast Conference sign is displayed by Florida State players after the team's win over Louisville in the ACC championship NCAA college football game Dec. 2, 2023, in Charlotte, N.C. The NCAA and the nation's five biggest conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims,a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester. (AP Photo/Erik Verduzco, File)

FILE - A network television camera is photographed before an NCAA college football game Oct. 22, 2022, in College Park, Md. The NCAA and the nation's five biggest conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims,a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester. (AP Photo/Gail Burton, File)

FILE - Baylor's Matt Ritchey stands by the Big 12 Conference logo on the field during the team's NCAA college football game against TCU in Waco, Texas, Oct. 13, 2012. The NCAA and the nation's five biggest conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims,a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester. (AP Photo/Tony Gutierrez, File)

FILE - Tony Petitti speaks to the media as he's introduced as the commissioner of the Big Ten, April 28, 2023, in Rosemont, Ill. The NCAA and the nation's five biggest conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims,a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester. (AP Photo/David Banks, File)

FILE - Miami practices before the start of the Atlantic Coast Conference basketball tournament March 11, 2024, in Washington. The NCAA and the nation's five biggest conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims,a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester.(AP Photo/Alex Brandon, File)

Big 12 commissioner Brett Yormark addresses the media during the NCAA college Big 12 women's basketball media day Tuesday, Oct. 17, 2023, in Kansas City, Mo. The NCAA and the nation's five biggest conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims,a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester.(AP Photo/Charlie Riedel, File)

FILE - The logo for the Big 12 Conference has been applied to the field for an NCAA college football game between Sam Houston State and BYU on Saturday, Sept. 2, 2023, in Provo, Utah. The NCAA and the nation's five biggest conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims,a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester. (AP Photo/Rick Bowmer, File)

FILE - Wisconsin's Traevon Jackson dribbles past the NCAA logo during practice at the NCAA men's college basketball tournament March 26, 2014, in Anaheim, Calif. The NCAA and the nation's five biggest conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims,a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester. (AP Photo/Jae C. Hong, File)

FILE - Signage is on the headquarters of the NCAA in Indianapolis, March 12, 2020. The NCAA and the nation's five biggest conferences have agreed to pay nearly $2.8 billion to settle a host of antitrust claims,a monumental decision that sets the stage for a groundbreaking revenue-sharing model that could start directing millions of dollars directly to athletes as soon as the 2025 fall semester. (AP Photo/Michael Conroy, File)

FILE - In this April 25, 2018, file photo, the NCAA headquarters is shown in Indianapolis. University presidents around the country are scheduled to meet this week in May 2024, to vote on whether to accept a proposed settlement of an antitrust lawsuit that would cost the NCAA nearly $3 billion in damages. (AP Photo/Darron Cummings, File)

FILE - Auburn quarterback Nick Marshall (14), left, takes the snap from Auburn center Reese Dismukes (50) as the Auburn offense operates against Missouri on the SEC logo during the first half of Auburn's 59-42 win over Missouri in the SEC Championship at the Georgia Dome, Saturday, Dec. 7, 2013, in Atlanta, Ga. Southeastern Conference and Pac-12 officials are expected to provide the final approval of a $2.8 billion plan that will settle antitrust claims and set the stage for college athletes to start sharing the billions of dollars flowing to their schools. (AP Photo/Atlanta Journal-Constitution, Jason Getz, File)

FILE - The Pac-12 logo is shown during the second half of an NCAA college football game between Arizona State and Kent State, in Tempe, Ariz., Aug. 29, 2019. Southeastern Conference and Pac-12 officials are expected to provide the final approval of a $2.8 billion plan that will settle antitrust claims and set the stage for college athletes to start sharing the billions of dollars flowing to their schools. (AP Photo/Ralph Freso, File)

NCAA, leagues sign off on $2.8 billion plan to set stage for dramatic change across college sports

FILE - Wisconsin's Traevon Jackson dribbles past the NCAA logo during practice at the NCAA men's college basketball tournament March 26, 2014, in Anaheim, Calif. University presidents around the country are scheduled to meet this week in May 2024, to vote on whether to accept a proposed settlement of an antitrust lawsuit that would cost the NCAA nearly $3 billion in damages. (AP Photo/Jae C. Hong, File)

NCAA, leagues sign off on $2.8 billion plan to set stage for dramatic change across college sports

The U.S. surgeon general has called on Congress to require warning labels on social media platforms similar to those now mandatory on cigarette boxes.

In a Monday opinion piece in the The New York Times, Dr. Vivek Murthy said that social media is a contributing factor in the mental health crisis among young people.

“It is time to require a surgeon general’s warning label on social media platforms, stating that social media is associated with significant mental health harms for adolescents. A surgeon general’s warning label, which requires congressional action, would regularly remind parents and adolescents that social media has not been proved safe,” Murthy said. “Evidence from tobacco studies show that warning labels can increase awareness and change behavior.”

Murthy said that the use of just a warning label wouldn't make social media safe for young people, but would be a part of the steps needed.

Social media use is prevalent among young people, with up to 95% of youth ages 13 to 17 saying that they use a social media platform, and more than a third saying that they use social media “almost constantly,” according to 2022 data from the Pew Research Center.

“Social media today is like tobacco decades ago: It’s a product whose business model depends on addicting kids. And as with cigarettes, a surgeon general’s warning label is a critical step toward mitigating the threat to children," Josh Golin, executive director at Fairplay, an organization that is dedicated to ending marketing to children, said in a statement.

Last year Murthy warned that there wasn't enough evidence to show that social media is safe for children and teens. He said at the time that policymakers needed to address the harms of social media the same way they regulate things like car seats, baby formula, medication and other products children use.

To comply with federal regulation, social media companies already ban kids under 13 from signing up for their platforms — but children have been shown to easily get around the bans, both with and without their parents’ consent.

Other measures social platforms have taken to address concerns about children’s mental health can also be easily circumvented. For instance, TikTok introduced a default 60-minute time limit for users under 18. But once the limit is reached, minors can simply enter a passcode to keep watching.

Murthy believes the impact of social media on young people should be a more pressing concern.

"Why is it that we have failed to respond to the harms of social media when they are no less urgent or widespread than those posed by unsafe cars, planes or food? These harms are not a failure of willpower and parenting; they are the consequence of unleashing powerful technology without adequate safety measures, transparency or accountability,” he wrote.

In January the CEOs of Meta, TikTok, X and other social media companies went before the Senate Judiciary Committee to testify as parents worry that they're not doing enough to protect young people. The executives touted existing safety tools on their platforms and the work they’ve done with nonprofits and law enforcement to protect minors.

Murthy said Monday that Congress needs to implement legislation that will protect young people from online harassment, abuse and exploitation and from exposure to extreme violence and sexual content.

“The measures should prevent platforms from collecting sensitive data from children and should restrict the use of features like push notifications, autoplay and infinite scroll, which prey on developing brains and contribute to excessive use,” Murthy wrote.

The surgeon general is also recommending that companies be required to share all their data on health effects with independent scientists and the public, which they currently don't do, and allow independent safety audits.

Murthy said schools and parents also need to participate in providing phone-free times and that doctors, nurses and other clinicians should help guide families toward safer practices.

While Murthy pushes for more to be done about social media in the United States, the European Union enacted groundbreaking new digital rules last year. The Digital Services Act is part of a suite of tech-focused regulations crafted by the 27-nation bloc — long a global leader in cracking down on tech giants.

The DSA is designed to keep users safe online and make it much harder to spread content that’s either illegal, like hate speech or child sexual abuse, or violates a platform’s terms of service. It also looks to protect citizens' fundamental rights such as privacy and free speech.

Officials have warned tech companies that violations could bring fines worth up to 6% of their global revenue — which could amount to billions — or even a ban from the EU.

FILE - Meta CEO Mark Zuckerberg, arrives to testify before a Senate Judiciary Committee hearing on Capitol Hill in Washington, Jan. 31, 2024, to discuss child safety. In a Monday, June 17, 2024, opinion piece for The New York Times, Dr. Vivek Murthy has called on Congress to require warning labels on social media platforms similar to those now mandatory on cigarette boxes. (AP Photo/Manuel Balce Ceneta, File)

FILE - Surgeon General Dr. Vivek Murthy speaks during an event on the White House complex in Washington, April 23, 2024. Murthy is asking Congress to require warning labels on social media platforms that are similar to those that appear on cigarette boxes. (AP Photo/Susan Walsh, File)

FILE - The U.S. Surgeon General's Warning appears on a pack of Camel cigarettes purchased at a Chicago area news stand on Nov. 30, 2012. In a Monday, June 17, 2024, opinion piece for The New York Times, Dr. Vivek Murthy has called on Congress to require warning labels on social media platforms similar to those now mandatory on cigarette boxes. (AP Photo/Charles Rex Arbogast, File)