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Antitrust Settlement Could Be Game Changer For College Athletes

The NCAA and the "Power 5" college sports conferences (ACC, Big 10, Big 12, Pac-12, and SEC) agreed to a $2.75 billion settlement of three antitrust cases challenging their limits on compensation and benefits for college athletes. Under the settlement, college athletes may receive payments directly from the colleges and universities they play for. For decades, NCAA rules have prohibited student-athletes from getting paid for playing sports.

Student-athletes have argued they should receive a part of the university revenues they generate. Twenty-two percent of the five conferences' average revenues will be shared the first year — equalling at least $20 million per school annually. Schools may opt into this revenue distribution model and decide which sports will get paid. The money cap will increase each year as revenues increase. These payments are in addition to "scholarships, third-party NIL payments, health care, and other benefits that college athletes already receive." The agreement eliminates scholarship caps and adds roster limits.

A federal judge must still approve the agreement, and the parties must finalize the settlement details. Smaller schools expressed concern about their financial burden under the settlement. Other issues reported in The Athletic include the lack of athlete input for the revenue sharing allotment, which is much lower than what professional athletes receive. These problems could carry over to unionizing efforts and whether student-athletes should be considered employees. The NCAA still hopes to get antitrust exemptions from Congress. Another suit remains pending against the NCAA, alleging the rules prohibiting "pay for play" compensation for students violate antitrust law.