The House v. NCAA Settlement and its Effects on Higher Ed Athletics

A landmark settlement in a class-action lawsuit brought by college athletes allows for direct revenue sharing and establishes new oversight mechanisms for name, image, and likeness (NIL) payments and athlete compensation.

The June 6, 2025, settlement agreement in House v. NCAA only directly applies to institutions that were a part of the lawsuit. But the agreements that were made to allow future revenue sharing are available to, and will affect, all institutions offering Division I (DI) sports.

Below is a breakdown of the settlement’s key aspects and its broader impact on college athletics.

Revenue Sharing

The settlement’s revenue sharing component lets the NCAA and its members modify existing NCAA rules and enact new rules that govern student-athlete compensation and rosters over a 10-year period. These new rules will apply to any DI school that elects to opt into the new structure agreed to in the settlement.

Starting July 1, 2025, colleges and universities included in the settlement (the power conference members that are defendants in this lawsuit and any additional DI institutions that elect to opt into the new revenue-sharing structure) can make direct revenue sharing payments to student-athletes. This structure is limited to DI institutions.

Schools participating in the new revenue sharing structure can provide DI student-athletes with additional direct benefits and compensation worth up to 22% of the Power Five schools’ average athletic revenue each year, subject to specified yearly increases. This pool likely will start around $20 million per school in the 2025-26 school year and grow to $32.9 million per school in 2034-35.

NIL

The NCAA will let third parties make NIL payments. However, it can continue prohibiting NIL from highly affiliated third parties (Associated Entities and Individuals) if the payments are not for a valid business purpose or provide unfair compensation:

• Associated Entities — Groups closely affiliated with the member school for the purpose of promoting the school’s athletics program or its student-athletes
• Individuals — A person who is a member of an Associated Entity or who has contributed more than $50,000 over their lifetime to a particular NCAA member school or Associated Entity, to promote their athletics programs

A new regulatory body called the College Sports Commission will oversee NIL and revenue sharing. Students must report any non-institution NIL payments over $600 to NIL Go, a new oversight entity run by Deloitte. If NIL Go contests a payment, the dispute can first go to a neutral arbiter and then get appealed to the College Sports Commission.

NIL Settlement Fund

The settlement funds provide damages for DI athletes at a power conference member (including Notre Dame) who were initially eligible for competition in DI at any time from June 15, 2016, through Sept. 15, 2024.

The $1.976-billion NIL Settlement Fund will have the following distributions:

1. Approximately $1.8 billion to members of the football and men’s basketball and women’s basketball classes related to lost NIL revenue from broadcasting profits
2. Approximately $71 million to members of the Football and Men’s Basketball classes and any other athletes who played football or basketball to compensate them for lost NIL opportunities related to their likeness being used in video games
3. Almost $90 million to athletes in all classes who received third-party NIL payments after July 2021 (the date they became eligible for NIL due to NCAA rule changes) as lost opportunity damages for not being able to take advantage of NIL sooner

Additional Compensation Settlement Fund

The defendants also will create a $600 million fund, the Additional Compensation Claims Settlement Amount, with these distributions:

1. 95% allocated to the power conference football and basketball portion, which will be distributed 75%/15%/5% to athletes across football, men’s basketball, and women’s basketball.
2. 5% allocated to additional sports claimants who received a partial or full grant in aid (GIA) scholarship from the 2019-20 school year through the end of the class period.

Scholarships

After the NCAA modifies its scholarship limits, schools can add award scholarships to DI athletes above the number permitted under current rules, subject to roster limits.

Roster Limits

The NCAA is allowed to adopt new roster limits for DI sports.

Note: Athletes whose roster spots were taken away or would have been taken away because of the immediate implementation of the settlement agreement are exempt from roster limits at any DI school for the duration of their college athletics careers. These athletes will not count toward any school’s roster limit for the remainder of their DI eligibility.

Arbitration

All disputes out of NCAA members’ enforcement of the third-party NIL restrictions permissible under the settlement must be resolved via neutral arbitration, rather than via the NCAA.

Appeal

Female athletes filed an appeal June 11 alleging the proposed distribution of settlement funds (which would result in 90% of the funds going to male athletes) violates Title IX.

The appeal does not challenge the forward-looking parts of the settlement, so implementation of the settlement’s revenue sharing, roster limits, and reporting of NIL deals components will start July 1, 2025, while the appeal progresses. However, distribution of the settlement funds (NIL Settlement Fund and Additional Compensation Settlement Fund) will pause until the appeal is resolved.

What Should You Do?

As you review these developments and the potential impacts on your campus, consider taking these risk management actions:

• Consult legal counsel. Whether your school participated in the settlement or not, higher education athletics and related rules will continue to change. Consult with legal counsel to determine the effects of the settlement, federal and state law (such as the proposed federal Student-Athlete Protections and Opportunities through Rights, Transparency, and Safety Act (College SPORTS Act)), and NCAA regulations. Also, continue discussing Title IX compliance requirements and employee characterization with legal counsel. Although this settlement did not make direct changes to Title IX compliance, and athletes still are not characterized as employees, these are important issues that require continued conversation.
• Watch for changes to NCAA rules. The House settlement and additional ongoing lawsuits may result in more NCAA changes in the coming months and years.
• Train athletes, athletics staff, and coaches. If your legal counsel approves, offer training for athletes and staff identifying what it means to be an athlete at your institution, NIL allowances and prohibitions, and, if relevant, revenue sharing policies at your institution.

More From UE

Understanding the Changing Landscape of College Athletics and NIL

Additional Resources

NCAA: Question and Answer — Implementation of the House Settlement