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No Offseason for the NCAA

 |  June 21, 2024

By: Julian D. Perlman & Sydney W. Park (BakerHostetler Antitrust Advocate)

As students leave their college campuses for summer break, the NCAA faces ongoing challenges. Recently, the NCAA addressed issues related to backpay for Name, Image, and Likeness (NIL) use and transfer eligibility. These decisions, while victories for some, also raise further questions about compliance and the status of athletes as employees.

First, the NCAA reached a historic settlement with athletes who competed before the Supreme Court’s ruling on athlete compensation in NCAA v. Alston. Former student-athletes in several consolidated classes argued they were owed years of prohibited NIL revenue. These classes were certified in September and November 2023, with estimated total damages in the billions.

While the exact terms of the settlement were not disclosed, it is believed to be over $2 billion. Approximately half will come from the NCAA’s reserves, with the remainder raised by withholding revenue distributions to conferences and schools over the next decade. This settlement marks the beginning of a new era of revenue-sharing between schools and athletes. Starting in 2025, schools will be allowed to distribute up to $20 million of their revenue directly to athletes each year. This revenue-sharing model will require safeguards to ensure compliance with Title IX obligations. Additionally, the $20 million cap may pose challenges for smaller programs in recruiting and retention.

The settlement may also lead to increased collective bargaining efforts, with student-athletes potentially being classified as employees. This raises further employment issues and additional responsibilities for universities and their requirements…