The NCAA agrees to pay out $2.7 billion to settle claims from former student-athletes

The NCAA has agreed tentatively to pay out $2.7 billion to settle three anti-trust lawsuits claiming that the college and university members formed an illegal trust to deny thousands of student athletes just compensation over the course of decades.

After decades of claiming that the athletes were "amateurs" and "student-athletes," the NCAA has agreed to rule changes that will allow the "schools" to pay the players. This is to resolve the three pending federal anti-trust lawsuits. The current and former college athletes will be paid the $2.7 billion over the course of 10 years.

The proposed settlement has been approved by the NCAA, the Power Five conferences and lawyers for the plaintiffs.

The NCAA, member schools, and the conferences have already spent millions of dollars on attorney fees as they have dragged this process out in the courts for years.

According to media reports, the conferences will begin paying their players directly. Reportedly the players' salaries will be capped at 22% of conference revenues – in the Southeastern Conference shared revenues are approximately $100 million per team under the new media rights contracts. The dollar amount of the cap is expected to rise annually as streaming and pay per view deals increasingly replace the old legacy free TV broadcasts.

Players would also potentially get a share of the ticket revenues – that revenue is not shared between the member institutions. The plan will go into effect in the 2025 football season.

The schools would get to decide internally how they distribute the money among their athletes and sports. If female student athletes are less well compensated than their male contemporaries there likely will be additional litigation under Title IX.

24% of the $2.8 billion ($672 million) will come from the Power Five members (the would include Auburn University and the University of Alabama). 10% ($280 million) from Group of Five members (the would include UAB, South Alabama, and Troy). 13% ($356 million) from the Football Championship Subdivision members (this would include Jacksonville State, Alabama A&M, Alabama State, Samford, and North Alabama). 12% ($336 million) would come from NCAA members that don't participate in football. The rest would come from the NCAA itself – mostly out of future revenues.

College athletic departments will be raising ticket prices and downsizing staffs to pay their portion of the settlement. Some schools may cut some sports as part of this expected belt tightening.

Former athletes going back to at least 2016 are expected to be eligible for compensation from this settlement.

ESPN commentator and long-time NCAA critic Stephen A. Smith said that this has been a longtime coming.

"This is long overdue," Smith said on his podcast. "The NCAA and these representative in institutions under the umbrella have been taking advantage of student-athletes for ages"¦ If you're the NCAA, you should be ashamed of yourself. You've been exploiting these kids for years."

This is a developing story and a lot of details have to be finalized on what players will be paid, how much, how this affects the NIL collectives, if there is a salary cap would boosters and advertisers be allowed to "sweeten the pot" for their favorite schools above and beyond the salary cap and will the group of five schools agree to these terms.

Another more vexing issue for college administrators is: if players are employees; then don't they have the right to unionize? If so, and if they do, then any agreement on revenuce sharing and salaries have to be negotiated with the union,

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