U.S. Judge Greenlights $2.8 Billion Settlement, Allowing Colleges to Compensate Athletes Millions

A federal judge has recently approved a landmark change in college sports, allowing schools to pay athletes millions of dollars as early as next month. This decision marks a significant departure from the amateur model that has defined college athletics for over a century.

The ruling follows a lawsuit filed by Arizona State swimmer Grant House, which aimed to lift restrictions on revenue sharing. Judge Claudia Wilken’s approval of the final proposal paves the way for schools to share up to $20.5 million with athletes in the coming year, along with $2.7 billion to be disbursed over the next decade to former players who were previously denied this revenue.

This monumental shift will affect numerous colleges, as they come to terms with the reality that their players generate substantial revenue, primarily through football and basketball. The changes are already underway and will impact nearly all of the NCAA’s 1,100 member schools and their nearly 500,000 athletes.

Judge Wilken’s decision is a culmination of over a decade of legal battles for athletes seeking compensation for their name, image, and likeness (NIL). Wilken first challenged the NCAA’s amateurism ideals in a case involving former UCLA basketball player Ed O’Bannon.

After preliminary approval of the settlement last October, colleges rushed to devise strategies for regulating and managing new revenue sharing and NIL deals. The settlement, however, was initially stalled due to concerns regarding roster limits that threatened walk-on athletes’ opportunities.

The final agreement allows those cut from rosters to return or transfer without being counted against limits. While top football and basketball players are poised to benefit significantly from this ruling, many walk-ons and partial scholarship athletes may lose their spots.

Additionally, the future of Olympic sports athletes remains uncertain. Attorneys argue that the settlement is a crucial step towards enhancing player compensation, but it does not fully address the potential for further legal challenges, as state laws on NIL payments continue to differ.

NCAA President Charlie Baker emphasizes the need for federal legislation to unify regulations and protect this new model.