In a pivotal ruling poised to reshape the landscape of college sports, Judge Claudia Wilken of the U.S. District Court for the Northern District of California has granted final approval of the $2.576 billion settlement in House v. NCAA. The agreement resolves antitrust law claims that the NCAA unlawfully barred student-athletes from receiving compensation for the use of their names, images and likeness (“NIL”).
Settlement Overview
The settlement establishes a $2.576 billion fund – paid out over 10 years – to compensate student- athletes for NIL income they would have received but for the NCAA’s past restrictions. The NCAA and several Division I conferences will fund this amount through direct payments and withheld member distributions. Of the total, $2.3 billion will be distributed to football and men’s basketball players, averaging approximately $120,000 per athlete. The remaining $500 million will be shared among athletes in women’s basketball and Olympic sports.
Revenue Sharing Framework
In addition to backpay, the agreement established a 10-year revenue-sharing model beginning July 1, 2025. Participating schools may allocate up to approximately $20.5 million annually – roughly 22% of certain athletic revenues – to athletes. This cap is expected to grow gradually over the life of the settlement, potentially reaching $33 million by 2034 and can be divided among sports programs at each school’s discretion. Although revenue sharing is not mandatory, schools declining to do so may face competitive disadvantages in recruiting.
Expanded Scholarships and Roster Flexibility
The settlement eliminates scholarship limits, granting schools greater flexibility to financially support athletes. However, team-specific roster caps will remain, requiring schools to continue managing roster sizes carefully, particularly in high-profile sports. These changes are designed to broaden financial aid access for a greater number of student-athletes while still maintaining opportunities for walk-ons.
NIL Oversight and Enforcement
To monitor NIL activity, Deloitte will operate a new compliance mechanism known at NIL GO – a clearinghouse that will review non-school NIL deals exceeding $600. Deloitte will evaluate whether agreements reflect fair market value and may recommend rejection of deals that do not. Valuation disputes will be resolved through arbitration proceedings.
Complementing this effort, a new enforcement body, the College Sports Commission, has been established to oversee the process. It will be led by Bryan Seeley, a former Assistant U.S. Attorney and EVP of Legal and Operations for Major League Baseball.
Unresolved Legal Questions
While the House settlement marks a historic shift in college athletics, it leaves several significant legal questions unanswered. For example:
- The settlement does not address whether student-athletes should be classified as employees under federal or state labor laws. It also is silent on whether student-athletes have a right to organize or collectively bargain under the National Labor Relations Act. Litigation on both fronts is already ongoing.
- Female athletes have appealed the settlement’s approval, arguing that the backpay terms violate Title IX by disproportionately benefiting male athletes. While the appeal focuses on retroactive compensation, broader Title IX compliance questions – especially regarding future revenue-sharing models – are expected. Federal law requires equitable distribution of scholarships and aid across male and female athletes, a requirement not directly addressed in the agreement.
- Because the settlement applies exclusively to Division I athletics, questions remain as to whether (and in what manner) the NCAA will revise its rules for Divisions II and III athletics.
Overall, the House decision represents a fundamental shift in the business model of college athletics. Institutions must now prepare for a host of legal considerations related to the implementation of the settlement and any future revenue-sharing arrangements.
If you have questions about the settlement and how it may impact you or your organization, please reach out to Jill Waldman or your regular Lathrop GPM attorney.