Since its founding, the NCAA has operated with a business model that defined the college athlete as an amateur. Over the years, as college sports evolved into a mega-enterprise, lawsuits and labor actions chipped away at that model, which came to be increasingly seen as exploitative in big-money sports like football and men’s basketball.
But the NCAA’s $2.8 billion settlement on Thursday night in a class-action antitrust lawsuit represents the heaviest blow — and perhaps a decisive one — to that system.
If approved by a U.S. district judge in California, the settlement would allow for the creation of the first revenue-sharing plan for college athletics, a landmark shift in which schools would directly pay their athletes for playing.
This sea change, though, also carries its own questions, according to critics. Those include whether women would be compensated fairly, whether smaller conferences would bear a disproportionate burden of the settlement and whether this framework would do anything to limit the power of collectives — the booster-funded groups that entice players with payments to hopscotch from school to school.
“It’s both a historic and deeply flawed agreement,” said Michael H. LeRoy, a law professor at the University of Illinois. “The idea that schools are paying millions of dollars to the people who are selling the TV contracts and filling the seats — that’s good. But it closes one Pandora’s box and opens four or five others.”
In recent years, college athletes had already made significant strides in gaining the right to make money for their performances. Three years ago, they were allowed for the first time to individually market their name, image and likeness legally. And in March, the men’s basketball team at Dartmouth voted to form a union after a federal official ruled that players were employees of the school. Thursday’s settlement in the case of House v. NCAA was seen by many college administrators as an inevitable conclusion.
The suit is named for former Arizona State swimmer Grant House, a plaintiff.
In settling the case, the NCAA sought to avoid a catastrophic judgment and ward off the steady drumbeat of antitrust lawsuits that have hampered the organization’s ability to make even the most basic of rules.
Had the suit gone to trial, the NCAA and the major conferences that were named as co-defendants — the Big Ten, Southeastern, Atlantic Coast, Big 12 and Pac-12 — would have feared a potential price tag exceeding $4 billion.
By settling, the NCAA is also sending a signal to Congress — which has been reluctant to intervene in the organization’s governance — that the association’s request for an antitrust exemption is necessary assistance, not a bailout.
“The settlement, though undesirable in many respects and promising only temporary stability, is necessary to avoid what would be the bankruptcy of college athletics,” the Rev. John I. Jenkins, president of the University of Notre Dame, said in a statement. He called on Congress to preempt a patchwork of state laws, to establish that athletes are not employees and, with an antitrust exemption, to allow schools a freer hand to make rules.
But the uncertainty of antitrust protection was underscored Thursday when a judge in Colorado denied the NCAA’s request to move another antitrust case, Fontenot v. NCAA, to the same court as the one that will decide on the Thursday settlement.
“The fact that a settlement is a good thing is not lost on me,” said Julie Roe Lach, commissioner of the Horizon League; its men’s basketball champion, Oakland, upset Kentucky in the NCAA Tournament. “We needed some level of stability, but it doesn’t put everything to bed. In my view, this was a rushed process, and it was not inclusive, which is concerning when you’re talking about a multibillion-dollar decision.”
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