A landmark agreement that reshapes the legal framework for student-athlete pay
The recent settlement in House v. NCAA marks a seismic shift in college athletics. By paving the way for schools to directly pay student-athletes, the agreement signals a formal departure from the NCAA’s amateurism model and ushers in a new era for Name, Image and Likeness (NIL) compensation.
Below is a summary of the settlement’s key provisions, along with practical implications for universities, student-athletes, collectives and conferences.
Background
The House litigation challenged NCAA rules that prevented student-athletes from profiting from their NIL. Plaintiffs argued that these restrictions violated antitrust law. In a global settlement, the NCAA and the five major conferences agreed to pay nearly $3 billion in back damages and implement new policies that permit direct revenue sharing.
This landmark deal effectively rewrites the financial model of college sports.
Key Provisions of the Settlement
The College Sports Commission
A body newly created by the major conferences will:
- Enforce settlement terms, including NIL and revenue-sharing rules.
- Assume certain NCAA responsibilities.
- Resolve disputes through mandatory expedited arbitration (details TBD).
Backpay for NIL Restrictions (2016–2024)
- Approximately $2.8 billion will be distributed to eligible Division I athletes who played between 2016 and 2024.
- Most of the payout will be allocated predominantly to athletes from football and basketball programs in the ACC, Big Ten, Big 12 and SEC.
Direct Revenue Sharing (Starting July 2025)
- Schools can begin sharing up to 22% of their qualifying athletics revenue — including media rights, ticket sales, and sponsorships — with student-athletes.
- The initial cap per school is estimated at $20.5 million for 2025–2026, with annual increases expected.
- Universities retain discretion over how to allocate funds across sports and athletes. Most funding is likely to go to high-revenue sports.
- Title IX compliance remains unresolved under this new framework and may be the subject of future litigation.
From Scholarship Limits to Roster Caps
The NCAA previously had sport-specific limitations on the number of scholarships a school could offer, but no limit on the roster size. The settlement abolished this concept in favor of sport-specific roster caps. Depending on each school’s choice of whether to fully fund scholarships for all roster spots, this change may alter available opportunities for walk-on student-athletes.
NIL Oversight Mechanism (NIL GO)
- The College Sports Commission has appointed Deloitte to review third-party NIL deals over $600.
- Reviews will assess fair market value and ensure the sponsoring entity has a legitimate business purpose for the proposal.
- Deals flagged as noncompliant can be revised, canceled, or appealed through arbitration.
- Collectives and “associated entities” will face increased scrutiny.
If a deal is not cleared, athletes can: revise and resubmit; cancel the deal; or appeal through neutral arbitration.
Practical Implications by Stakeholder
Universities and Athletic Departments
- Must restructure budgets to accommodate direct athlete compensation
- Recruiting advantages may shift to better-resourced programs
- Need for enhanced compliance and reporting systems
- Ongoing uncertainty about Title IX obligations
Student-Athletes (2016–Present)
- Access to retroactive compensation
- New opportunities for revenue sharing from their schools
- Stronger protections for NIL deals through NIL GO
Collectives
- Must demonstrate fair market value and business purpose for NIL arrangements
- Increased regulatory oversight of transactions
Conferences
- Gain greater authority and autonomy
- Further decentralization from NCAA control
What Comes Next
While the House Settlement answers some long-standing questions, it introduces new legal, operational and compliance challenges.
Institutions and other stakeholders should:
- Review internal policies to ensure compliance with revenue sharing and NIL oversight.
- Develop systems for NIL GO reporting.
- Prepare for potential Title IX challenges.
- Stay attuned to guidance from the NCAA, the College Sports Commission and conference leadership.
Importantly, while the House Settlement resolves major issues in NIL, it does not eliminate the risk of future legal action. Therefore, further litigation is not only possible, but likely. Expected areas of further litigation may include Title IX, state NIL statutes, labor and employment laws, and continued antitrust scrutiny.
In fact, the House Settlement has already been challenged twice regarding backpay for past NIL restrictions, particularly how those funds are allocated to women athletes from 2016 to 2024.
Our Team Can Help
Our team is closely monitoring developments and is available to advise institutions, collectives, and student-athletes navigating the volatile post-House NIL landscape.
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