NCAA Settlement on Hold

As well, objections have been raised regarding how the back payments would be shared among athletes. Almost 90 percent will likely be designated to football and men’s basketball players, as per the settlement terms. But there is disagreement over the money each sport generated through television contracts, which should be considered when determining who deserved the biggest portion of the payout.

What the Settlement Means

The settlement includes payments to current and former Division I athletes, revenue sharing, roster limits, and a new enforcement entity responsible for ensuring schools and athletes comply with NIL rules (the rights of college athletes to control and profit from their name, image and likeness.)

The settlement will provide the following:

• Pay out $2.8 billion in damages over a 10-year period to qualified D-I athletes who played at some point from 2016.
• Compensate athletes for lost NIL, video game and broadcasting opportunities resulting from past NCAA eligibility rules. 
• Convert intercollegiate athletics into a system that’s much closer to professional sports.  
• Allow participating colleges to directly pay athletes a share of up to 22% of the average power conference athletic media, ticket and sponsorship revenue, with $20.5 million expected as the initial annual cap. Those payments will be in addition to athletic scholarships, which cover tuition, housing, health resources and other benefits, as well as NIL deals athletes sign with third parties. 
• Establish roster limits while making everyone eligible for scholarships
• Cap the number of athletic scholarships a school can provide while adding roster limits.
• A neutral review of NIL deals that are worth more than $600. NIL Go will review deals to ensure they reflect fair market value.

Roster Limits

The Settlement removes scholarship limits but it imposes roster limits. Objectors say these latest revisions still don’t adequately deal with the harm caused by new roster limits, which could cost athletes thousands of roster spots nationwide as schools find ways to cut expenses to absorb higher costs. Currently, schools must follow scholarship limits but have no roster limits, allowing walk-ons and partial scholarship recipients to participate, according to ESPN. The new settlement would establish roster limits while making everyone eligible for scholarships.

The NCSA says new roster limits will match or exceed current scholarship restrictions for each sport. With scholarship caps gone, most programs will be able to offer more scholarships. However, they must follow the new NCAA roster limits for each sport. For example, NCAA football scholarship limits will have a roster cap of 105 players, up from 85.

Title IX Law

Title IX requires schools to provide equal academic opportunities to men and women on their campuses. During the law’s 50 years, colleges were required to provide roster spots and scholarship dollars to men and women equally. However, Department of Education leaders during the past few years have disagreed on whether new revenue share payments between schools and athletes should also be considered a benefit that is related to education.

If colleges share more revenue with male athletes than female athletes, they would be in violation of Title IX. Unequal sharing would be problematic for some schools, and it could get complicated. Counterarguments include revenue-sharing that is based on the use of the athletes’ right of publicity, which is ordinarily tied to the athlete’s unique identity, and thus arguably outside the scope of Title IX.

In an appeal to Judge Claudia Wilken at a preliminary hearing for the settlement in September 2024 and again in April at the final approval, Wilken wrote that the application of Title IX law was outside the scope of the settlement. Sportico predicts that there will no doubt be litigation on this topic.  One attorney said that complying with Title IX was a problem in this settlement, so it was ignored. Title IX defense attorneys say colleges are preparing for a potential wave of gender-equity lawsuits from athletes, especially challenges over how that revenue is distributed.