Judge OKs $2.8B NCAA Settlement, College Athletes Set for Payouts/ TezzBuzz/ WASHINGTON/ J. Mansour/ Morning Edition/ A federal judge has approved a $2.8 billion NCAA settlement, enabling colleges to start paying athletes as early as next month. The agreement marks a fundamental shift in college sports, dismantling the amateurism model. Athletes could earn up to $20.5 million per school in the first year, with billions more distributed over a decade.
In a landmark decision that could redefine college athletics forever, U.S. District Judge Claudia Wilken approved a $2.8 billion NCAA settlement Friday, clearing the way for schools to directly compensate student-athletes for the first time in history.
This judgment caps a five-year legal journey initiated by Arizona State swimmer Grant Housewhose class-action lawsuit challenged the NCAA’s longstanding restrictions on revenue sharing. The ruling tears down the final wall of the amateurism era, setting the stage for athletes to earn millions as the multi-billion-dollar college sports industry undergoes its most radical transformation to date.
Each NCAA Division I school can now distribute up to $20.5 million annually to athletes starting as soon as next month. Additionally, $2.7 billion in backpay will be spread across thousands of former athletes who were previously prohibited from receiving revenue.
The decision affects every aspect of college sports — from elite programs that generate TV billions to smaller schools already facing budget constraints.
Wilken’s latest ruling follows her 2014 decision in favor of And O’Bannonwhich cracked open the door for players to profit from their Name, Image, and Likeness (NIL). That led to the NCAA formally allowing NIL compensation in 2021, but this settlement goes far further — enabling schools themselves to pay athletes directly.
The NCAA’s top brass, including President Charlie Bakerwelcomed the development:
Still, it also shifts power away from the NCAA and into the hands of the major conferences — SEC, Big Ten, ACC, and Big 12 — who now take on a greater regulatory role.
Though initially approved last fall, the finalization of the agreement was delayed after concerns arose over new roster limits. Schools had started cutting walk-on and partial scholarship athletes to stay within proposed limits — leaving thousands of players in limbo.
Judge Wilken demanded a remedy, and parties agreed that any athlete cut from a team — termed a “Designated Student-Athlete” — must be given the option to return or transfer without penalty or counting against team caps.
Wilken ruled that the changes restored previous conditions, saying:
Winners: Star football and basketball players at major programs now stand to earn millions annually. For example, Michigan QB Bryce Underwood reportedly signed a NIL deal worth up to $12 million — a figure likely to rise as direct school payments begin.
Losers: Non-scholarship athletes and those in non-revenue sports — including Olympic hopefuls — may see fewer opportunities. Already financially fragile sports like wrestling, swimming, and gymnastics could be on the chopping block as schools reallocate funds.
In limbo: Rules vary by state regarding NIL dealswhich could trigger further lawsuits. NCAA leadership is lobbying for federal legislation to unify the regulatory framework and gain antitrust protections.
This settlement doesn’t just change athlete compensation — it may reshape recruiting, team-building, and university finances. Schools are already scrambling to balance new payment models with compliance, legal risk, and Title IX obligations.
Moreover, third-party oversight will be implemented via Deloittemarking a rare outsourcing of regulatory power in college athletics. Meanwhile, the College Football Playoffwhich operates independently from the NCAA, is now even more central to the revenue ecosystem.
North Carolina AD Bubba Cunningham expressed cautious optimism:
Still, financial pressures may force some schools to trim athletic offeringsparticularly as they divert resources toward athlete compensation and potential NIL booster collectives.
While the ruling ends one major battle, state-by-state NIL laws could still cause compliance nightmares. NCAA President Baker has long urged Congress to pass a uniform federal law to protect against further disruption.
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