In a significant development, the NCAA and power conferences have filed a comprehensive long-form agreement in the settlement of three antitrust lawsuits. The agreement marks a shift in the college sports landscape, introducing athlete revenue sharing, expanding scholarships, and implementing a new enforcement system overseen by the courts. These changes are set to take effect from the 2025-26 academic year.

The settlement, which addresses athlete compensation issues, includes provisions for distributing nearly $2.8 billion in back damages to former players over a ten-year period. Approximately 83% of this amount, equivalent to $2.3 billion, is expected to go to around 19,000 football and men's basketball players, primarily from power conferences. This translates to an average of approximately $120,000 per player over the ten-year period.

The agreement also lays out guidelines for revenue distribution going forward. The first back payments are scheduled to be made in the coming spring, pending approval from U.S. District Court Judge Claudia Wilken. The approval process is anticipated to continue into early next year.

One of the key elements of the settlement is the establishment of an enforcement mechanism to regulate third-party NIL (name, image, and likeness) entities that provide cash incentives disguised as endorsement deals. The agreement prohibits boosters and other third-party entities from entering into NIL agreements with athletes unless they can demonstrate that the deals are genuine and aligned with market rates for similarly situated individuals not associated with the athlete's school. It further requires all third-party NIL deals valued at $600 or above to be approved by a new clearinghouse, ensuring fairness and authenticity.

The settlement also addresses concerns about circumventing revenue-sharing caps. It grants the NCAA and conferences the authority to adopt rules preventing transactions aimed at defeating or circumventing these caps. Additionally, it clarifies that school funds used by outside entities to distribute to athletes will count against the revenue-sharing cap. However, a provision allows schools to act as marketers for their athletes' NIL by entering into exclusive or non-exclusive endorsement agreements, enabling them to share revenue beyond the cap.

Notably, a court-appointed "special master" will be responsible for resolving compliance disputes, while a neutral arbiter will preside over appeals related to rules violations under the new model. Plaintiff attorneys and their class of athletes will have a role in overseeing the enforcement process of the salary cap over the duration of the ten-year agreement.

The agreement also outlines the revenue-sharing cap, which will be set at 22% of an average of certain power school revenues. The exact cap figure for the 2025-26 academic year will be determined based on financial reports submitted by schools. The cap amount will increase with built-in escalators and recalculations throughout the ten-year period.

The settlement extends its reach to schools and conferences outside of the NCAA and power conferences. However, these entities are only bound by the roster limits, reporting system, and enforcement mechanism if they choose to share revenue with athletes.

Efforts are underway to codify the settlement agreement through congressional legislation. The plaintiffs and their attorneys will actively support these lobbying initiatives and maintain a neutral stance on employment issues in college sports.

The initial back-damage payment is expected to be made on May 15, 2025, or within 45 days of the settlement's finalization, which is projected for early 2025. Subsequent annual payments will be made on July 15.

Overall, this landmark settlement agreement represents a pivotal moment in college sports, aiming to address long-standing issues related to athlete compensation and revenue-sharing while establishing a framework for the years to come.