[co-author: Elizabeth Bulat]*
A week after the approval of the $2.5 billion class action settlement of House v. NCAA (settlement), the NCAA and defendant conferences (i.e., Atlantic Coast Conference, Big Ten Conference, Big 12 Conference, Pac-12 Conference, and Southeastern Conference) released a question and answer document (Q&A Guidance) providing guidance on the settlement’s implementation. This post covers insights from some of the Q&A Guidance for Division I membership to consider on the eve of radical collegiate athletic change.
Obligations of Institutions That Opt Into the Settlement (Q&A Nos. A1 and A10)
Institutions that opt into the settlement may directly provide name, image, and likeness (NIL) payments to student-athletes. Any Division I institution may opt-in (participating institutions) and would owe duties to the defendant conferences and their members, including ensuring that additional payments or benefits provided to student-athletes comply with the settlement agreement’s benefits cap and cap-related rules, policies, and procedures.
By opting in, participating institutions also incur reporting obligations to the cap management reporting system (CAPS). Participating institutions must report: (1) all NIL licenses between the participating institution and its student-athletes; (2) any payments or benefits provided to student-athletes beyond what was permitted as of October 7, 2024, when the court preliminary approved the settlement; and (3) all additional benefits that count against the benefits cap. All participating institutions also must adhere to the roster limits established by the settlement and consent to the College Sports Commission’s authority to enforce NCAA bylaws adopted in connection with the settlement.
Declaring Designated Student-Athletes (Q&A No. C15)
Designated student-athletes are athletes who were or would have been removed from a 2025-2026 roster due to the implementation of the settlement’s roster limits. These designated student-athletes — who must have been certified as eligible to practice or compete in the 2024-25 academic year prior to April 7, 2025, (the date of the final approval hearing), or recruited prior to April 7, 2025, to be, or were assured to be, on a roster for the 2025-26 academic year — are exempt from any roster limits imposed as a result of a participating institution opting into the settlement. Participating institutions must declare their designated student-athletes by preparing and submitting lists of these athletes to CAPS by July 6, 2025 — 30 days after the final approval hearing. A participating institution cannot supplement or revise its list after July 6. Further, a participating institution that does not opt into the settlement agreement during the 2025-26 year but does opt into it in the future (Question No. A9), may not later identify designated student-athletes. Therefore, any institution that seeks to declare designated student-athletes, now or in the future, must submit its list by July 6.
Benefits Cap and Multiyear Agreements (Q&A Nos. D2 and D20)
The benefits cap is the maximum dollar value of additional payments or benefits provided by a participating institution to its student-athletes during an academic year. Multiyear agreements that promise these payments or benefits complicate the calculation of a participating institution’s compliance with the benefits cap. According to the Q&A Guidance, these multiyear agreements count against the participating institution’s benefits cap in the year that the payment or benefit is provided to the student-athlete.
Any additional payments or benefits provided to a student-athlete (articulated in Q&A No. D7) count against a participating institution’s benefits cap allowance in the years the payments may be made. However, if a payment is not made by the end of the academic year — for example, because the student-athlete failed to achieve a specific benchmark — then the amount will be removed from the institution’s annual benefits cap allowance.
The Q&A Guidance provides several examples (unachieved incentive[i] and transfer[ii]) of additional payments promised in multiyear agreements and the way in which these payments are counted against a participating institution’s benefits cap in the year the payments and/or benefits are provided.
NIL Go and Third-Party NIL (Q&A Nos. E1-E2, E11-E12, and E16)
Student-athletes must report all noninstitutional NIL deals worth at least $600 to NIL Go, a software platform designed to provide oversight related to third-party NIL deals. For purposes of NIL Go, third parties are individuals and entities not associated with the institution a respective student-athlete attends. When a student-athlete submits an NIL contract or payment to NIL Go, the noninstitutional party must certify that the student-athlete’s disclosure is accurate and complete.
To ensure compliance, NIL Go disclosures go through a series of reviews. NIL Go third-party payments must be entirely funded by the third-party. A noninstitutional party that pays an NIL deal must attest whether it meets the definition of an “associated entity or individual,” whether an institution directed it to enter the NIL deal with the student-athlete, and whether it self-funded the payments to the student-athlete. Additionally, the College Sports Commission, with Deloitte’s help, will determine whether a noninstitutional party meets the definition of an “associated entity or individual” (i.e., whether a third-party is sufficiently independent from a student-athlete’s institution). If the entity cannot be verified as an associated entity or individual, the burden shifts to the institution to make this determination.
Arbitration (Q&A Nos. F3-F4, and F8-F10)
Student-athletes and institutions may contest decisions made by the College Sports Commission concerning NIL deals using a neutral arbitration process. The neutral arbitrator has the authority to call witnesses and order the production of documents and evidence necessary for the fair adjudication of the dispute. Student-athletes who use the neutral arbitration process may be represented by counsel of their choice, and an institution is permitted to pay the attorney’s fees and costs for the student-athlete. However, if an institution elects to do so, then it is also responsible for the arbitrator’s reasonable fees and expenses. Although witnesses have the right to be represented by counsel, it is at their own expense.
[i] Unachieved incentive (example No. 3 of Question No. D20): Assume that a student-athlete signs a two-year agreement that offers a $50,000 signing incentive payment, $100,000 on January 1 of year one, and $100,000 on January 1 of year two. In this case, $150,000 would count against the Participating Institution’s benefits cap in year one and $100,000 would count in year two.
[ii] Transfer (example No. 2 of Question No. D20): within the transfer context, installment and buyout payments make this calculation more cumbersome. Assume a student-athlete receives an annual payment of $100,000 for competing at Institution A, with $50,000 disbursed at the beginning of the academic year, and $50,000 at the end of the academic year if the student-athlete remains at Institution A. However, if the student-athlete transfers, she must pay a $100,000 buyout. In such a situation, when the student-athlete transfers to Institution B between the $50,000 payments, and Institution B is willing to pay the $100,000 buyout, the $100,000 buyout will count against Institution B’s benefits cap. Meanwhile, the unearned second $50,000 payment will be added back to Institution A’s benefits cap. Although Institution A received a $100,000 buyout from Institution B, that amount does not increase its benefits cap.
*Summer Associate
