NCAA, Power 5 agree to deal that will let schools pay players

The NCAA and its five power conferences have agreed to allow schools to directly pay players for the first time in the 100-plus-year history of college sports.

The NCAA and its leagues are moving forward with a multibillion-dollar agreement to settle three pending federal antitrust cases. The NCAA will pay more than $2.7 billion in damages over 10 years to past and current athletes, sources told ESPN. Sources said the parties also have agreed to a revenue-sharing plan allowing each school to share up to roughly $20 million per year with its athletes.

"The five autonomy conferences and the NCAA agreeing to settlement terms is an important step in the continuing reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics across all divisions for years to come," NCAA president Charlie Baker and the five power conference commissioners said in a joint statement Thursday evening.

"This settlement is also a road map for college sports leaders and Congress to ensure this uniquely American institution can continue to provide unmatched opportunity for millions of students. All of Division I made today's progress possible, and we all have work to do to implement the terms of the agreement as the legal process continues. We look forward to working with our various student-athlete leadership groups to write the next chapter of college sports."

All Division I athletes dating back to 2016 are eligible to receive a share as part of the settlement class. In exchange, athletes cannot sue the NCAA for other potential antitrust violations and must drop their complaints in three open cases: House v. NCAA, Hubbard v. NCAA and Carter v. NCAA.

The settlement terms must be approved by Judge Claudia Wilken, who is presiding over all three cases. That process is expected to take several months, and sources said schools likely will begin sharing revenue in fall 2025.

The NCAA's board of governors and leaders from the ACC, Big Ten, Big 12, SEC and Pac-12 voted to accept the general terms laid out in a 13-page document. Notre Dame also agreed to the settlement as a member of the ACC.

"The settlement, though undesirable in many respects and promising only temporary stability, is necessary to avoid what would be the bankruptcy of college athletics," Notre Dame president John I. Jenkins said in a statement. "To save the great American institution of college sports, Congress must pass legislation that will preempt the current patchwork of state laws; establish that our athletes are not employees, but students seeking college degrees; and provide protection from further antitrust lawsuits that will allow colleges to make and enforce rules that will protect our student-athletes and help ensure competitive equity among our teams."

The agreement does not resolve all the pending legal issues that have revolutionized the business of college sports and destabilized the multibillion-dollar industry. Athletes and their advocates are still fighting to become employees or find other ways to collectively bargain in the future, which could reshape a revenue-sharing agreement. This week's agreement, though, potentially decreases the NCAA's exposure to antitrust litigation, which has been the most powerful tool in pushing schools to provide more for athletes.

"We recognize that we're just on the front end of this entire process," said Illinois athletic director Josh Whitman, who recently took over as the chair of the NCAA's Division I Council. "There's a lot to be sorted out as we try to really wrap our arms around some of the details that we're putting in place now."

Steve Berman, co-lead counsel for the athletes alongside veteran antirust attorney Jeffrey Kessler, said this week's agreement feels like a "finish line" but that the cases won't be officially closed for several more months. Other antitrust attorneys told ESPN that the deal could unravel if athletes opt out to join a separate and pending antitrust case or if Wilken rejects the settlement terms. Berman said he remains confident their deal will hold.

"I'm hugely proud," Berman said. "This is a revolutionary change I never thought would happen when I started this. I'm thrilled for the student-athletes because this will be life-changing for all of them."

By the end of this week, the parties plan to alert Wilken -- who has presided over the most impactful antitrust cases of the past decade -- that they will submit final details to the court in the next 30 days.

If Wilken approves those details in a preliminary hearing, which is likely to occur in July, Berman said the plaintiffs' lawyers will publish a website and distribute a notice to all players explaining the potential benefits of remaining in the class and options for objecting or opting out.

Class members usually have a window of more than 30 days to raise objections or opt out of a settlement. If players opt out, they will give up any money they would receive from the damages but retain the right to sue the NCAA and its schools in the future for antitrust violations.

There is at least one other pending antitrust lawsuit not covered by this week's agreement. Former Colorado football player Alex Fontenot is suing the NCAA for restricting how it shares TV rights revenue with players. The NCAA and the attorneys in the House case argued that Fontenot's claims should be consolidated with the other lawsuits because they are very similar. However, a judge in Colorado denied that request Thursday morning.

Garrett Broshuis, Fontenot's attorney, who helped negotiate a major settlement on behalf of minor league baseball players in recent years, told ESPN that they are monitoring this week's agreement closely. They might consider opting out once they see the terms of the deal, which would make the peace the NCAA and its conferences hope they are buying very short-lived.

Berman said he believes the judge in Fontenot's case could change her opinion once the terms of the settlement are approved. He also said he thinks it's unlikely many athletes will pass up the potential settlement money and take on the risk of joining Fontenot's case.

"Some athletes could be getting tens of thousands or over a hundred thousand [dollars] in the settlement," Berman said. "They'd have to choose to see if they could do better on their own."

Berman told ESPN that a series of formulas devised by a sports economist will be used to decide how to split the $2.7 billion in damages among more than 10,000 former and current athletes. He said some money will be split evenly among all members, but other parts will be allocated based on the athlete's market value. Metrics such as career snap count or a player's star rating in recruiting might determine their payout, he said.

Gathering data to plug into that formula could be a complicated process, and Berman said he is hoping schools will provide "granular data" rather than requiring players to submit claims by themselves.

The settlement terms provide a 10-year window to fully pay out the $2.7 billion. Berman said each player in the class will get an annual check worth 10% of the money they are owed. He said Wilken will approve how much money will go toward attorneys' fees.

Several athletic directors told ESPN that they are hopeful the settlement lays the groundwork for a system in which success on the field is less dependent on which schools can spend the most money. Sources said some of the challenges to solve include figuring out how to distribute the revenue-sharing money in a way that meets market needs while complying with Title IX laws and whether schools can regain control of the marketplace for college athletes, which has been outsourced during the past three years to booster collectives, which pay athletes via name, image and likeness endorsement deals.

Berman said the settlement includes a "mechanism" that he believes will make it easier for schools to rein in the marketplace for third-party NIL deals. He declined to provide any further details. Several athletic directors told ESPN this week that they were optimistic but uncertain about whether the settlement would give them enough legal room to regain control.

"I think we have a chance right now to really reshape the model in the most meaningful way of any of our lifetimes, and maybe the most meaningful way there has ever been," said Whitman, the new Division I Council chair.

Asked whether he thought the settlement provided the tools the NCAA and its schools need to take back control of the market for college athletes and add stability to the new world for college sports, Whitman said: "We'll find out."

ESPN's Heather Dinich contributed to this report.