NCAA Board Approves Settlement Terms Ending Amateurism
The NCAA’s board of governors voted Wednesday evening to accept the settlement term sheet that—if it becomes a finalized agreement approved by U.S. District Judge Claudia Wilken, and if it withstands potential legal challenges—would resolve antitrust litigations in which college athletes argue they are owed compensation for money they could have earned in video games and broadcasts, and through their name, image and likeness.
The ACC, Big 12 and Big Ten voted to approve the settlement term sheet earlier in the week. Still left are the SEC and the Pac-12, which are expected to vote and approve it as soon as Thursday.
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As Sportico detailed, the settlement’s value is about $2.7 billion and contemplates athletes receiving varying levels of compensation. Going forward, conferences will be able to share revenue with athletes. Many details of the settlement will need to be worked out in the months ahead before it gains judicial approval.
The vote of the board, which is the NCAA’s highest governance body, has both symbolic and legal significance.
Symbolically, this shows the NCAA has approved an arrangement that ends any semblance of “amateurism,” which has broadly referred to NCAA rules that distinguish college athletes as amateurs by denying them opportunities for compensation. If the settlement is ultimately finalized, judicially approved and implemented, some college athletes will be paid. To the extent “amateur” means “an athlete who is not paid,” that’s ending in college sports.
It will be a dramatic change for the NCAA, which decades ago adopted amateurism rules and the “student-athlete” moniker in part to defeat litigation in which athletes sought pay, including through workers’ compensation insurance. In its manual, the NCAA has insisted that college athletes’ participation “should be motivated primarily by education and by the physical, mental and social benefits to be derived” and that colleges must safeguard those athletes “from exploitation by professional and commercial enterprises.”
The NCAA is also accepting this fundamental change 40 years after U.S. Supreme Court Justice John Paul Stevens wrote in NCAA v. Board of Regents “the NCAA plays a critical role in the maintenance of a revered tradition of amateurism in college sports.” He added, “There can be no question but that [the NCAA] needs ample latitude to play that role.”
The NCAA later relied on that “latitude” to its detriment.
When former UCLA basketball star Ed O’Bannon sued over likenesses of basketball players appearing in video games without those players’ consent and without paying them, the NCAA insisted there was no wrongdoing due to amateurism. Federal district and appellate courts disagreed, setting the table for lawmakers to pursue and adopt name, image and likeness statutes guaranteeing that college athletes can use a legal right they already have as Americans—the right of publicity—without running afoul of NCAA rules.
When former West Virginia running back Shawne Alston sued over NCAA caps on colleges reimbursing athletes for education-related expenses, the NCAA once again invoked amateurism as a defense. And, once again, the NCAA lost, setting the table for recent antitrust challenges to NCAA rules on NIL collectives and the transfer portal.
Instead of potentially losing again in court, the NCAA is now cutting a deal—but with the deal comes the end of an era. For coaches earning millions of dollars a year and for other beneficiaries of the multibillion-dollar industry, college sports has already gone pro. Now athletes, some of whom benefit from athletic scholarships, will gain a more direct stake.
For NCAA president Charlie Baker, who took the job last year, the settlement will likely be the defining moment of his young tenure. As a popular Republican governor of a Democratic-leaning Massachusetts, Baker was regarded as pragmatic and non-partisan. The settlement is thematically similar: Baker is making a calculus that settling and changing rules is less risky than litigating unpopular restraints in court. As Sportico explained Wednesday, the NCAA might have prevailed in the antitrust litigation, but Baker is not taking the chance in a case where the NCAA believes potential damages could exceed $4 billion.
The board’s vote, which ESPN reported was not unanimous, could also take on legal significance. Member schools and conferences that object to a new world order for college sports, including one where they’ll foot some of the bill, could sue the NCAA and seek restraining orders to block the settlement. They could argue the voting process for the settlement had not been negotiated, was rushed and haphazard, denied dissenters a credible chance to weigh in and falls outside of board rules. Now that the board has voted, the legal controversy would be ripe. The NCAA would counter that its members contractually accept the association’s authority to make legal decisions.
The board’s vote could also resurface in potential litigation brought by athletes. Because the settlement terms have not been negotiated with a union, new NCAA rules that cap athlete compensation (like a de facto salary cap) are vulnerable to potential antitrust scrutiny. Athletes might also challenge new rules as violating Title IX if they lead to colleges paying male athletes more than female athletes. While conferences have not been found liable under Title IX, the mechanics of athlete pay will be scrutinized.
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