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The National Collegiate Athletic Association and the five most prominent athletic conferences agreed to a $2.77 billion settlement of a class-action lawsuit on Thursday, ushering in a new era of college sports in which schools can pay athletes directly, The Wall Street Journal reports.
The move breaks the NCAA’s century-old stance that college athletes are amateurs and are not due any of the money they generate for their universities.
The settlement resolves a lawsuit filed in 2020, which sought back pay for athletes who were barred from earning compensation from endorsements as well as a cut of future broadcast revenues.
As part of the settlement, the NCAA will allow schools to pay athletes a portion of the revenue they help generate—though there has been concern regarding the variance in total athletics revenue between top-end schools such as Texas and Ohio State that rake in more than $250 million a year and smaller schools such as Washington State, which collects $80 million.
As Daily Report previously reported, LSU collected nearly $200.4 million for the 2023 fiscal year.
To offset the discrepancy, the settlement agreement calls for schools to pay athletes 22% of the average annual athletic department revenue among schools in the top conferences. According to people familiar with the matter, that figure is roughly $20 million per school.
