Photo: Getty Images
By Darryl Jacobs
ESPN & CBS Sports Networks
After spending a few days at the recent NACDA (National Association of Collegiate Directors of Athletics) conference in Orlando, Florida, the energy in the rooms was unmistakable. College athletics is in the middle of its most profound transformation in over a century. While administrators discussed NIL reforms, athlete well-being, and the evolution of conference affiliations, the buzz that couldn’t be ignored was around the pending antitrust case facing the NCAA. Now, that anticipation must be turned into action.
The NCAA has agreed to a landmark $2.8 billion settlement to resolve a class-action antitrust lawsuit brought by former college athletes who competed between 2016 and 2024. It’s a decision that not only provides compensation for past athletes but also redefines the financial relationship between student-athletes and the institutions they represent.
This case, ruled on by Judge Claudia Wilken in the Ninth Circuit, challenges the very foundation of amateurism in college sports. The fallout? We’re entering a new era where athletes will participate in revenue sharing, sign contracts, and perhaps even bargain collectively — a scenario that was previously unthinkable just five years ago.
A Historic Payout
At the heart of the settlement is a long-standing grievance: that college athletes generated billions of dollars in revenue for the NCAA, schools, and conferences — while receiving no direct share of that income. The settlement addresses this by offering a $2.8 billion pool to compensate those who played during the specified window and opted into the case.
These are not small numbers. Thousands of former athletes — in sports ranging from football and basketball to volleyball and track — will now be eligible for back pay. For many, this is not just about money but about validation. The settlement acknowledges that their labor had real value. But the settlement is more than retroactive justice. It introduces a new framework that may define the future of college sports.
The Birth of a Revenue-Sharing Era
As part of the agreement, NCAA member institutions that choose to participate will be permitted to share revenue directly with current student athletes. Specifically, schools can allocate up to 22% of their revenue from television contracts, ticket sales, and corporate sponsorships toward athlete compensation.
For schools in the Power Five conferences — the financial heavyweights of college athletics — this amounts to an estimated $20.5 million per institution annually. That’s a dramatic shift from the traditional scholarship-based model.
It’s important to note that this is a cap, not a requirement. Schools are not obligated to pay the full amount, but the cap sets the maximum they can offer under the revenue-sharing plan. There’s
also a 4% escalator clause built in for the first two years, meaning the cap could reach 30% or more within a few seasons, depending on the financial health of the athletic departments.
When combined with the traditional scholarship package — tuition, housing, meals, and cost-of-attendance stipends — the NCAA estimates that athletes could now receive compensation representing nearly 50% of the revenue they help generate. While not equivalent to professional salaries, it means a significant leap toward fair compensation.
Contracts and Buyouts: A New Business Model
With this new structure, schools will also have the ability to issue contracts to student-athletes. These agreements could include buyout clauses, length-of-commitment terms, and performance conditions — similar to contracts in professional sports leagues. This formalization of athlete agreements could pave the way for collective bargaining, a significant step towards empowering student-athletes. Suppose future legal rulings or congressional action classify student-athletes as employees. In that case, this shift will enable athletes to negotiate collectively on issues such as healthcare, working conditions, and guaranteed compensation, ushering in a new era of optimism for athlete rights.
For now, employment status remains a legal gray area, but the presence of contracts brings college athletics one step closer to a labor model than a purely educational one.
Oversight and Transparency: New Governance Structures
To ensure that this new financial model doesn’t spiral out of control, the NCAA has agreed to establish a College Sports Commission to oversee the implementation and enforcement of the revenue-sharing system. This independent body will help manage compliance, verify payment structures, and create accountability for programs across all divisions. Additionally, the accounting and auditing giant Deloitte will play a critical role by operating a national NIL clearinghouse. Under the new guidelines, any Name, Image, and Likeness (NIL) deals valued over $600 must be submitted for review, bringing a new level of oversight and transparency to college athletics.
This vetting process aims to ensure that deals are based on fair market value and not being used as recruiting tools or illegal pay-for-play schemes. Third-party collectives — which have played a central role in many NIL operations to date — will still be allowed, but their activity will be subject to similar scrutiny.
The hope is that Deloitte’s involvement will bring standardization and transparency to a space that, until now, has been chaotic, inconsistent, and largely unregulated.
Pressure Builds for Congressional Intervention
One of the biggest questions on everyone’s mind following this settlement is whether Congress will finally step in and make it a law. Lawmakers on both sides of the aisle have criticized the NCAA’s inability to govern its evolving system proactively, and this settlement may provide the push needed for legislative action.
Federal intervention could help resolve lingering questions about:
· The employee status of athletes
· The legality of third-party collectives
· National NIL enforcement standards
· Title IX implications of direct athlete compensation
By acting now, Congress could help create a uniform playing field for all schools — whether they’re in the SEC or the Ivy League — and prevent a patchwork of conflicting state laws from further complicating the landscape.
Challenges Ahead: Enforcement and Equity
While the settlement represents a massive step forward, serious challenges remain. Chief among them: enforcement. The NCAA has struggled to apply consistent discipline across its member institutions, and skeptics wonder whether the new commission and Deloitte will have the authority to crack down on abuses — especially at schools with deep pockets and intense competitive pressure.
There are also equity concerns. Will non-revenue sports receive a fair share of compensation? Will women’s sports benefit equally from this model? Will mid-major schools be able to keep up, or will this accelerate the gap between the haves and have-nots?
These are questions with no easy answers. However, what is clear is that the status quo is gone.
A New Chapter in College Athletics
As I left the NACDA conference and reflected on what’s ahead, it was clear to me that college sports are entering a new chapter — one defined by the inspiring empowerment of athletes, institutional accountability, and the promising clarity of the law.
The $2.8 billion settlement isn’t just a check — it’s a declaration of accountability. It tells athletes, fans, and institutions alike that college sports can no longer profit from unpaid labor while claiming to protect “amateurism.” That term is now outdated.
College athletics has always been about passion, pride, and performance. Now, it’s also about fairness. And for the thousands of athletes who gave everything without ever cashing a check, this moment is long overdue.
Darryl Jacobs is an ESPN & CBS Sports Network Commentator/Analyst, former successful college head coach, athletic administrator, and professional sports executive with over two decades of experience in collegiate athletics and professional sports.
