Impact on College Athletes Without NIL Valuation as Power 5 Conferences Accept $2.7 Billion NCAA Settlement

One of the hottest news on the internet right now is the NCAA’s new settlement along with the Power Five conferences (the Big Ten, SEC, Pac-12, Big 12, and ACC). The agreement is that the organization will “allow schools to pay their athletes.” The NCAA also received a time frame of the next 10 years to “pay over $2.7 Billion in damages to past and current athletes.” Is this move a wise or a foolish one?

This is the first time college sports has witnessed such a thing as paying a student to play. Along with the NCAA and the Power Five conferences, law firm Hagens Berman and Winston & Strawn LLP announced that it’s a “landmark antitrust class-action settlement” that will give “billion of dollars in backpay damages and tens of billions of dollars in future revenue-sharing to college athletes.” This settlement aims to allow each school to share up to around $20 million per year with athletes. But how does this impact college athletes without NIL valuations?

How NCAA’s settlement could impact some college students

According to what Berman told ESPN, the number of former and current athletes stands at over 10,000. They’re the ones to benefit from the $2.7 billion that the NCAA has to pay in damages. But to counter the potential negative results that could creep up from players without NIL valuations, a “series of formulas” will determine how the money is divided. 

Currently, NIL and the transfer portal are the best free assets in college football. So athletic directors voiced their wishes on ESPN saying that they’re “hopeful the settlement lays the groundwork for a system where success on the field is less dependent on which schools can spend the most money.” As Illinois AD and NCAA’s Division I Council chairman Josh Whitman said, “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.” But how is it going to affect the college sports scene?

The impact of NCAA’s new settlement on college sports

 Regarding scholarships, the NCAA is in consideration of whether or not to remove the cap on guaranteed scholarships across sports. But could there be a possible change in roster size? For instance, a football team has 120 players with 85 limited scholarships. This scenario has the possibility of turning to 100 players with scholarships in the future. 

As for the NIL department, the NCAA is hopeful that the new settlement will boost NIL guardrails which is why some schools are already hiring specific staffers to deal with NIL. But all in all, this settlement is going to change college sports as the relationship between players and schools transforms with direct payment for participation.