The NCAA agrees to pay athletes directly as the college-compensation battle rages on

Paid like a champion… Some student-athletes might soon be switching from ramen to ribeye. Colleges earn billions off their players, but they don't hand out paychecks. That could change: the NCAA and its five biggest athletic conferences agreed last week to an antitrust settlement that, if approved, would allow colleges to pay athletes directly. 14K+ current and former college athletes could receive a share of the $2.8B settlement (the lawsuit at the center of the case could’ve resulted in $20B in damages for the NCAA).

• Athletes could get up to $1.5B/year under the new model. Refresher: in 2021 the Supreme Court ruled that the NCAA couldn’t ban payments to college athletes.

• The playbook: Universities would be allowed (but not forced) to share up to 22% of their yearly sports revenue with athletes as early as fall 2025. FYI: pro league revenue splits are about 50-50.

• Student section: College sports stars have already earned millions from NIL (name, image, likeness) deals, including brand sponsorships. Like NIL, the new revenue-sharing model could become crucial for recruiting.

The pay game’s not over… Division I sports generated nearly $16B in revenue in 2019, and 18% of that went back to athletes through scholarships and medical treatments. But there’s been a push to compensate student-athletes more like employees. Dartmouth’s men’s-basketball team voted to unionize in March, and USC football and basketball players are embroiled in a legal battle over their employment status. Last year, the NCAA called for the creation of a new sports tier where cash-rich schools would have to pay at least half of their athletes a minimum of $30K/year.