A federal judge has provided preliminary approval for a slightly modified version of a multi-billion dollar settlement related to three antitrust cases concerning athlete compensation against the NCAA and the Power Five conferences.

This ruling brings the NCAA and the conferences closer to establishing a $2.8 billion fund aimed at compensating current and former athletes over the next 10 years. It also paves the way for a significant shift in college athletics, allowing Division I schools to directly pay athletes for the use of their name, image, and likeness (NIL), with a cap on payments that will increase over time.

However, the settlement process is far from complete.

Notifications to current and former athletes regarding the settlement terms and claims procedures will commence on October 18. Those eligible under the agreement can voice objections or choose to opt out by January 31, 2025. A final approval hearing is scheduled for April 7, 2025.

Legal appeals could still arise. In a previous college sports compensation case, a former player and his attorney prolonged a settlement process by taking it to the 9th U.S. Circuit Court of Appeals. While their attempt ultimately failed, it delayed the resolution by around two years.

This journey has also faced challenges.

Lawyers from three different groups of athletes previously expressed opposition to the initial approval. During a hearing on September 5, U.S. District Judge Claudia Wilken indicated that she could not approve the original settlement proposal for reasons distinct from those raised in the oppositions.

Following this, on September 26, the attorneys who developed the initial settlement submitted a revised agreement. This update responded to Wilken’s apprehensions regarding how the original settlement defined entities whose current NIL agreements with athletes would receive heightened scrutiny under a new regulatory framework that the NCAA and the conferences insisted upon in exchange for the transformative deal.

Nevertheless, last week, this revised proposal faced objections from another group of athletes led by attorney Michael Hausfeld, who previously represented former UCLA basketball player Ed O’Bannon in a notable antitrust win against the NCAA.

Wilken’s Monday order did not provide specific reasoning for her preliminary approval but included standard language indicating her intent to “likely approve the Settlement as fair, reasonable and adequate subject to further consideration” at the final hearing.

“This is a significant advancement for NCAA athletes,” stated Steve Berman, a leading attorney for the plaintiffs, in an email to YSL News Sports.

NCAA President Charlie Baker expressed excitement over Judge Wilken’s preliminary approval, stating: “We are thrilled with the decision which will fortify stability and sustainability in college sports and provide greater benefits to student-athletes for years to come. Today marks a crucial step in shaping the future of college sports. We are eager to collaborate with Division I and student-athlete leadership groups to navigate this historic change.”

According to the settlement terms, schools may begin compensating athletes in the academic year following final approval and the resolution of any appeals. In theory, athletes could start receiving payments during the 2025-26 school year. Berman noted that current and former athletes might receive compensation from the damages fund as early as fall 2025, if not sooner.

Plaintiff attorneys estimate that nearly 400,000 athletes will be eligible for some form of compensation for damages dating back to 2016, with football and men’s basketball players likely receiving the highest amounts. Notably, there is an instance reported of an athlete from another sport projected to claim over $1.85 million.

This is all part of a broader transformation of college athletics under the proposed settlement.

Some potential changes include:

▶ NCAA leaders will aim to revise rules, eliminating the longstanding scholarship limits by sport and replacing these with new roster-size caps. For football, for instance, the roster limit would increase to 105 for the academic year following the settlement’s final approval.

▶ Athletes will still have the ability to make NIL deals with parties outside their schools, but the settlement allows the NCAA to create rules providing greater oversight of these agreements.

The development of these rules was the primary source of concern noted by Wilken during the September 5 hearing.

As it stands, athletes will need to report payments exceeding $600 to a newly established clearinghouse. Additionally, agreements will undergo review, focusing on preventing pay-for-play scenarios and ensuring compensation is market value based.

This raises potential questions regarding the future of collectives, which are donor groups allocated to provide NIL payments. Currently, these payments often lack a strong link to the actual value of an athlete’s NIL rights or their promotional engagements.

Under the settlement terms, athletes who have queries regarding their agreements’ compliance can seek guidance from a regulatory body. If the governing body attempts to penalize an athlete due to a deal, the athlete has the option to escalate the matter to an arbitrator.