NCAA Agrees to Payout, Redefining College Athlete Compensation

A $2.8 billion deal that ends an antitrust case against the National Collegiate Athletic Association and the country's five largest conferences will compensate thousands of student-athletes, both current and former. Now, the difficult part will be deciding how much each participant receives and why.

Former Arizona State swimmer Grant House and current Texas Christian University basketball player Sedona Prince filed a complaint in Northern California in 2020, accusing the NCAA and the five wealthiest conferences of unfairly preventing athletes from receiving endorsement money based on their name, image, and likenesses, or NILs.

The NCAA's agreement, which is still pending approval, calls for the league and conferences to pay $2.77 billion over a ten-year period to over 14,000 current and former college athletes who assert that they were denied payment from endorsement and sponsorship deals as early as 2016.

The federal judge presiding over the case must still accept the agreement, and objections may be raised. However, if the agreement holds up, collegiate sports will enter a new age when players receive money more akin to that of pros and colleges can use direct payments to compete for talent.

According to Tim Derdenger, a professor of sports marketing at Carnegie Mellon University, the NCAA has two options: either distribute a portion of the money to universities around the country and have someone on campus decide how much to pay out, or hire a third party to handle the logistics. In the latter scenario, the NCAA will have to determine if all of the players should earn the same amount of money or if some should receive more than others due to their superior performance, says analysts.

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Distribution of Settlement Funds in College Sports

College football and basketball players will probably receive the majority of the settlement if award levels are decided by other metrics. This is due to the fact that university sports departments often make the most money from basketball and football games. According to Derdenger, in such case, starting point guards or quarterbacks with the highest salary would benefit the most.

The golf, field hockey, lacrosse, soccer, and volleyball teams at a school will also receive rewards, but Derdenger said that since these sports don't bring in much money, the payouts probably won't be in the six digits.

Patrick Rishe, a sports management professor at Washington University in St. Louis, said that the NCAA should implement a payout system that rewards athletes equally and recognizes those who play the most popular sports, taking a cue from European soccer.

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