NCAA reaches historic $2.8 billion settlement with athletes 

The impacts of the NCAA settlement create a new playing field for the Trojans. 

Freshman guard JuJu Watkins already has NIL deals with Nike, Taco Bell and other big name brands. With the new $2.8 billion NCAA settlement, it will be interesting to see how much she will be paid by USC next season. (Ethan Thai / Daily Trojan)

In a monumental decision poised to reshape college athletics, the NCAA and its Power Five conferences have agreed to a $2.8 billion settlement with former athletes. The agreement also includes introducing a revenue-sharing model that allows for the compensation of collegiate athletes.

First, the settlement is set to back pay for damages to athletes over a 10-year stretch, which includes grievances regarding the use of their name, image and likeness in media broadcasts and any other media without compensation. 

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The most transformative aspect of the settlement is the implementation of a new revenue-sharing model. This means that starting in the 2025-2026 academic year, student-athletes at schools in the Power Five conferences will receive a share of revenue generated by their athletic departments. The income of the athletic departments includes but is not limited to television contracts, ticket sales and sponsorship deals. An estimated 22% of athletic departments’ revenue may be permitted to be distributed to athletes. 

Additionally, a provision that eliminates scholarship caps and new roster limits will be introduced. This would eliminate the NCAA’s set scholarship cap for each team, allowing schools to offer scholarships based on their financial ability and the needs of their athletic programs. However, the NCAA also implemented roster limits to ensure a proper competitive balance and development of student-athletes. 

To USC athletics, this drastically changes the landscape of recruiting and how the athletic department balances its newly allocated budget to pay its current athletes.

It is safe to say the times of recruiting to develop players for the next level have gone with the wind. Players now want assurance they’ll be paid. This new reality of college athletics means that financial considerations are becoming increasingly important in the recruiting process. Athletes in today’s game are no longer solely focused on their athletic development or academic opportunities, but more on how college athletic programs can provide immediate financial benefits. 

Powerhouse athletic programs such as USC benefit greatly from this settlement. According to 247Sports, USC ranks as the 13th-ranked athletic program nationally and fourth in the Big Ten Conference in terms of gross revenue, earning $146 million. 

The new revenue-sharing model increases the financial incentives the University is able to provide for its student-athletes. 

The settlement’s impact on USC’s recruiting power is expected to be deep, not just in Southern California but across the nation. With the removal of scholarship caps and the introduction of the revenue-sharing model, USC can now leverage its financial resources to its advantage. This is a significant edge in the competitive world of college athletics and definitely a weapon in the arsenal of recruiting. 

It also allows the Trojans to offer more scholarships while managing their roster sizes. With more financial incentives available to athletic programs, this helps them retain top talent, reducing the likelihood of athletes transferring to other programs. 

Additionally, it will allow the current players to be paid. The 22% estimation from USC’s $146 million in revenue gives the University roughly $32,120,000 to use to pay its college athletes. As one of the nation’s top athletic programs by gross revenue, USC can become a more attractive destination for top recruits. 

The terms of the settlement still require approval from a federal judge and plaintiffs, but if ratified, it would become a landmark settlement that changes the whole landscape of college athletics. Student-athletes will be recognized and compensated for their contributions both on and off the field.

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