A U.S. District Judge, Claudia Wilken, granted preliminary approval for a transformative $2.78 billion legal settlement that will allow college sports programs to pay athletes directly.

As part of the settlement, the NCAA has agreed to pay approximately $2.8 billion in damages to current and former college athletes.

Under the agreement, major colleges will establish a revenue-sharing pool of approximately $21.5 million in the first year for athletes, while still allowing them to negotiate separate name, image, and likeness (NIL) deals.

This settlement addresses issues related to the NCAA's treatment of college athletes and their ability to earn money, particularly through NIL deals.

Athletes will retain the ability to negotiate NIL deals with external entities, which have become a significant source of income.

The settlement includes restrictions on third-party boosters and NIL deals, which have raised concerns among various groups.

Plaintiffs' attorney Steve Berman expressed optimism about the settlement, stating it significantly improves oversight by limiting NCAA control over NIL agreements.

The settlement was modified to address the judge's concerns, particularly regarding the terminology used to describe NIL deals and the role of neutral arbitration.

Concerns have been raised about the distribution of the settlement funds, with estimates suggesting that a significant portion may favor football and men's basketball players, potentially violating Title IX regulations.

Athletes will be able to start applying for compensation from the settlement on October 18, 2024.

Despite these advancements, unresolved issues remain regarding athletes' rights to unionize and their potential classification as employees.

NCAA President Charlie Baker hailed the decision as a significant step towards enhancing benefits for student-athletes and stabilizing college athletics.