A California district judge gave the NCAA and power conferences preliminary approval to settle the antitrust case in the House, another step in a long process toward the era of athletic revenue sharing.

Judge Claudia Wilken of the U.S. District Court for the Northern District of California issued her ruling Monday without further hearing and after plaintiffs and defendants in the case clarified the language of the agreement 10 days ago.

The two-part settlement requires schools to pay about $2.8 billion to former athletes in damages for the loss of names, images and likenesses, but, perhaps more importantly, it allows – rather than requires – schools to do so them – to share millions of dollars with their athletes. The settlement’s new revenue sharing model is expected to take effect on July 1.

Wilken’s ruling in this landmark case is the latest step toward a settlement that, while it won’t solve all of college athletics’ problems, pushes the industry toward a modernized structure and releases claims from some — but not all — future lawsuits. The NCAA and the power leagues reached an agreement in May with attorneys representing plaintiffs in a case involving lost NIL payments. Thousands of athletes, most of whom played between 2017 and the present, face thousands of dollars in back pay coming from NCAA headquarters and schools’ revenue distribution (much of it coming from the NCAA men’s basketball tournament).

The most important element, however, is an athlete revenue sharing concept, which is examined here. Schools are allowed to share up to $23 million per year directly with their athletes in a limited system. The cap, a floating number that changes annually, will rise as school revenue increases. The exact number for the first year of implementation is uncertain.

The agreement also includes the implementation of new roster boundaries, examined in this story, that will allow programs to offer scholarships across their entire roster.

While the settlement doesn’t solve all of the industry’s problems, it is expected to move college sports closer to a more professional model – a move to fend off court rulings and state laws that continue to pressure college administrators to share a larger share of their revenue with athletes split.

However, the agreement does not completely eliminate some future legal challenges, does not prevent athletes from being considered employees and may still require congressional support. NCAA and college leaders continue to advocate for greater protections on Capitol Hill, as they have done for five years.

No school is required to share revenue with athletes, and schools can opt out of the agreement. Commissioners of several basketball-only conferences and members of the FCS say they do not expect many or any of their schools to join the agreement. Several programs in the Group of Five are not expected to share much, if any, revenue with athletes because many of these schools are financially strapped and use tuition and state tax dollars to run their athletic departments.

The comparison also targets the revenue-generating football schools in the power conferences. For months, Power League administrators have been working to strategize around the upcoming revenue-sharing concept, create contract templates with athletes, reorganize their booster collectives and add staff for contract negotiations.

At the center of the agreement are collectives, groups of supporters who pool money to distribute to athletes under the guise of advertising contracts.

The settlement agreement, filed in July, provides protection for the NCAA and power leagues in enforcing their refresher pay rules. The provision in the settlement was the focus of a hearing last month in which Wilken refused to grant preliminary approval until the wording was clarified or changed.

Plaintiff and defendant filed a brief on September 26 that adjusted the wording but did not change the provision. The power conferences are leading the effort to create a new non-NCAA enforcement agency with a clearinghouse responsible for approving certain non-college-related compensation for athletes.

Final approval of the settlement is still many months away, but in her preliminary approval Monday, Wilken made clear that she believes the agreement is fair and reasonable. A final approval hearing is scheduled for April 7, the day of the NCAA men’s basketball tournament championship game.

Over the next few months, lawyers will notify the former players who are entitled to part of the back payments, and those who object to the settlement can file those objections with the court.