How $2.8 billion NCAA settlement will impact college sports
CHARLOTTE, N.C. (QUEEN CITY NEWS) — Finding a sports fan who knows the basics of what’s going on with the name, image and likeness policy might be 50/50. Finding someone who knows there’s an antitrust lawsuit against the NCAA, and a potential settlement on the horizon? Slim to none.
NCAA, leagues back $2.8 billion settlement, setting stage for current, former athletes to be paid
“Yeah, it’s difficult to follow,” said sports fan Jody Edwards. “Sometimes when you’re talking about legal aspects of it, you don’t understand exactly what’s going on.”
A class-action lawsuit against the NCAA alleges the organization broke federal law by prohibiting college athletes from profiting off their own name, image and likeness and refusing to share broadcast revenue with those student-athletes.
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“The risk for the NCAA is if they lose, it could result in the association paying out over $4 billion, with a B, dollars in damages,” said Melinda Morris Zanoni, managing member of Apollo Sports & Entertainment Law Group.
This $2.8 billion settlement would force schools to retroactively pay athletes who were previously prohibited from profiting off of NIL, and structure a revenue sharing system that could pay athletes up to $20 million a year.
NIL, which took effect for college athletes in summer 2021, is not just opening the door for them. It’s creating opportunities for smaller companies who maybe can’t afford a big sponsorship during premiere events.
“What this NIL does is it opens the door to small brands,” Morris Zanoni said. “Where there’s chaos, there’s opportunity, I like to say. So, these small brands can align with individual athletes, and tap into a local market.”
So, where’s the negative? Smaller colleges and universities, the Cinderella stories, will have a hard time keeping up. NIL combined with a de-regulated transfer portal have created a free-for-all at the end of every sports season.
“It is impacting where these kids go to school,” Morris Zanoni said, “so, who’s got the advantage? Power Five.”
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“I think the NIL has some benefits to it,” said Edwards, “but I also think it has some negative aspects to it too when players are not loyal to their schools.”
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The lure of a bigger pay day for athletes has also turned other big names away from the game.
“College athletics, many argue, are hurting,” Morris Zanoni said. “You have legendary coaches retiring in recent years because of NIL, saying the athlete’s mindset toward winning; it’s different now.”
This settlement will save the NCAA from going to trial in 2025 and being on the hook for more than $4 billion. Those damages would have been divided up between the conferences, with the Power Five conferences paying the largest share. This settlement will be paid over the next 10 years. In the upcoming months, the NCAA and conferences will have to fine tune how the revenue sharing will look.
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