NCAA settlement may pressure schools to pay out millions to top athletes. Will Pitt keep up?

Each year, football and basketball players at the University of Pittsburgh perform for thousands of ticket-holding fans and television viewers. They strain their bodies and generate millions of dollars for their university — but Pitt doesn’t pay them.

That could soon change. In late May, the NCAA announced it had agreed to settle a roughly $2.8 billion class-action antitrust lawsuit. If approved by a judge — a process that could take months — the landmark settlement would create a system where Pitt and other top sports schools could begin paying their athletes, regardless of sport, as soon as August 2025.

For decades, the NCAA has considered college athletes “amateurs,” only recently allowing them to make external deals for their name, image and likeness. The proposed payments under the settlement would be different, coming directly from Pitt instead.

Under the settlement’s proposed revenue-sharing agreement, Pitt and the other universities in the Power 5 conferences could distribute about $20 million, at most, to their athletes each year. Though the universities may not be required to participate, the pressure to keep their top players could push them to pay up.

The settlement “ushers in a new era of paying athletes for their performance on the field,” said Karen Weaver, a former NCAA Division I head coach and adjunct assistant professor at the University of Pennsylvania. The NCAA is acknowledging that athletes are “performing a product on the field that millions of people want to watch,” she said.

The details of the settlement are not public, and the full extent to which it would change college athletics remains unclear. The deal has been described as closing “ one Pandora’s box and [opening] four or five others, ” and experts said it raises questions about gender equity, the employment status of athletes and the financial feasibility of it all.

The settlement could lead schools “to only offer two to three sports that can generate revenue,” said Gil Fried, a professor at the University of West Florida who specializes in sports law and finance.

Here’s a breakdown of some of the pressing questions surrounding the settlement and its implications for Pitt.

How will Pitt find the money to pay its athletes?

The maximum annual payment would likely strain Pitt’s athletic department. The department has broken even in the five most recent years for which the university reported data to the federal government. The department had roughly $137 million in revenue and expenses between July 2022 and June 2023, the latest period for which data is available.

Pitt spends that money on scholarships for athletes, salaries for coaches, recruiting efforts and other “game-day expenses,” according to a federal government website .

Like the other universities in the Power Five conferences, Pitt would need to decide which players to pay, and how much to pay them. These universities may have limited options for covering the added expense, Weaver said.

“They can’t afford to charge full tuition to everybody,” she said. “Students are sensitive to being asked to pay student fees that will subsidize the athletics department. Benefits and salaries are going up; the cost of real estate is going up. So, there’s really no logical place to pull this from.”

Pitt spokesperson Jared Stonesifer did not respond to emailed questions asking him to detail how the university intends to come up with a $20 million annual payment, the extent to which such a payment would strain the athletic department and whether the university believes cuts or changes within the department would be needed.

He instead linked to a joint statement from the NCAA president and the commissioners of the Power 5 conferences, which states that “agreeing to settlement terms is an important step in the continuing reform of college sports that will provide benefits to student-athletes and provide clarity in college athletics across all divisions for years to come.”

“… we all have work to do to implement the terms of the agreement as the legal process continues,” the statement reads.

Some experts told PublicSource that universities may seek out private equity firms to invest in their teams, a practice that has become increasingly common in professional sports. Some also speculate that the settlement could lead to lower salaries for at least some coaches. Pitt paid its 82 head and assistant coaches about $30 million, collectively, in the 2022-2023 reporting year.

Schools outside the Power Five conferences may be able to opt-in to the revenue-sharing agreement. But the payments may harm smaller schools more, some experts said, with Fried saying they could “bankrupt” at least some. Opting out, though, could “open a competitive gulf” between teams with paid and unpaid athletes, NPR reported .

Duquesne University, a Division I school outside the Power Five conferences whose men’s basketball team made it to March Madness this year, did not make its athletic director available for a requested interview.

What will the settlement mean for Title IX?

The settlement also poses significant questions about gender equity in athletics. Title IX, a federal civil rights law, requires that universities treat their male and female athletes equally, including in scholarships, publicity efforts and travel allowances. If Pitt pays its athletes, will it need to split the money equally between men and women?

The annual payment would be pulled from sponsorships, ticket sales and television revenue — but men’s football and basketball tend to generate much more than other men’s sports, and women’s teams altogether. At Pitt, the men’s teams raised almost $80 million in the 2022-2023 reporting year, with football bringing in about $55 million, federal data shows.

Combined, the women’s teams generated about $20 million in revenue.

Patrick Rishe, director of the sports business program at Washington University in St. Louis, said the Title IX implications are “the biggest challenge” regarding the settlement. But he envisioned a hybrid model working, where half of the annual payment is split evenly among players and the rest is allocated based on performance, television ratings and other criteria.

“A lot of things are going to have to be considered when they try to figure out how to allocate these resources. I think it can be done. You’re not going to please everybody with whatever system you come up with,” Rishe said.

What if student athletes are considered employees?

Though the settlement may lead to schools like Pitt paying athletes directly, the NCAA maintains that athletes aren’t employees and, therefore, aren’t able to unionize. That could change, as the University of Southern California, the Pac-12 Conference and the NCAA face an unfair labor practice charge that, once litigated, could allow athletes to organize.

Some observers believe the May settlement could bolster support for classifying athletes as employees and could even “ radically alter the equation. ” However, Fried said the move could have far-reaching legal and financial consequences. He raised several scenarios, including:

• If a school doesn’t recruit a player, can it be sued for discrimination?
• Will it need to pay tens of thousands of dollars, per athlete, in insurance premiums for workers compensation?
• Will it need to provide unemployment compensation to terminated players?
• Will federal workplace regulators impose penalties if players are injured at practice?

These possible costs would be in addition to any annual payments made under the proposed revenue-sharing agreement.

“People might be celebrating right now and saying, ‘Wow, this is great. We’ve got a settlement; we’re going to get paid.’ Well, what does that mean in the long term?” Fried asked. “Celebrations are very short-lived when reality comes into play.”

Emma Folts c overs higher education at PublicSource, in partnership with Open Campus. She can be reached at emma@publicsource.org .

This story was fact-checked by Jamie Wiggan.

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