House Settlement
A little late, but a nice summary:
The NCAA House settlement agreement has been the subject of significant discussion and controversy, with multiple hearings reflecting the magnitude of its implications. However, on Friday, June 6, Judge Claudia Wilken granted final approval of the settlement, marking what is considered the most transformative shift in the history of college sports. Before the settlement, student-athletes could only receive compensation via third parties for their Name, Image, and Likeness (NIL). However, following the settlement, athletic departments at colleges and universities across the country can now directly compensate their student-athletes. The major components of the settlement are outlined below:
1. Back Pay
A central provision of the settlement is the allocation of approximately $2.8 billion in back pay to current and former student-athletes who participated in college athletics between June 15, 2016, and September 15, 2024. Eligibility and payment amounts will vary based on each student-athlete’s sport, institution, and duration of participation. Additionally, these payments will be distributed over a 10-year period and will be administered under the oversight of a newly formed College Sports Commission. The Commission is also tasked with enforcing settlement terms, including the regulation of third-party NIL deals exceeding $600.
2. Revenue Sharing
Beginning in the 2025–2026 academic year, the settlement permits institutions to share up to 22% of certain revenue, which excludes earnings from media rights, ticket sales, and scholarships, with student-athletes. Participation in this revenue-sharing model is mandatory for Power Five conference schools but is optional for non–Power Five Division I institutions. The 22% cap excludes earnings from third-party NIL agreements or sponsorships secured independently by student-athletes. Institutions are responsible for determining their own allocation and distribution processes if they participate in revenue sharing. Additionally, the settlement also imposes annual financial reporting requirements, and the College Sports Commission will oversee compliance with the terms of the settlement.
3. Roster Limits and Scholarships
The settlement eliminates previous scholarship limits, allowing Division I schools to award athletic aid to all athletes on a team’s roster. However, it introduces sport-specific roster caps, which apply only to institutions participating in the new revenue-sharing model. A grandfathering provision ensures that current student-athletes already on rosters will not count toward these new limits. The revised model will take effect on July 1, 2025.
4. College Sports Commission
Although not included within the settlement, on the same day the settlement was approved, the SEC, Big Ten, ACC, and Pac-12 launched the website for the College Sports Commission, an independent regulatory body responsible for overseeing student-athlete compensation in the new era of collegiate athletics and student-athlete compensation. The College Sports Commission will be led by Bryan Seeley (a Major League Baseball executive) as its CEO.
Implications and Considerations
Looking forward, institutions will need to strategically budget to permit student-athlete compensation and must adapt to an evolving regulatory and financial environment. Some athletic departments have already taken such steps in anticipation of the settlement, including establishing their athletic departments as separate for-profit organizations that are not bound by the charitable restrictions of the institutions to which they are attached. Taking such action will help them raise capital and manage the portfolio of payments to student-athletes. Additionally, the settlement almost certainly will widen the competitive and financial gap between Power Five schools and smaller Division I programs, considering disparities in resources and required revenue-sharing participation.
Replies to: House Settlement
Not so fast my friend. A Title IX appeal might throw a monkey wrench into the discriminatory scheme
The losers here are WOMEN, whose athletes will see a reduction in "scholarships."
Regardless, this will tie up the funds indefinitely.
Link: https://www.msn.com/en-us/sports/nba/female-athletes-appeal-landmark-ncaa-settlement-saying-it-violates-federal-antidiscrimination-law/ar-AA1GyBDl?ocid=entnewsntp&pc=U531&cvid=cb18a80599e64274bed580d4768127e6&ei=81
Could the current Supreme Court upend title IX?
i'm thinking they could say that since Football and Basketball generate the revenue it would be unfair to them to share half of the 20 million
I don't think so. Non-Revenue men's sports may be more at risk at some schools.
Universities aren't going to be stupid here. The women's sports and scholarships will remain in place. I think it's much more likely that schools which try to maintain a reasonably competitive football team without as much revenue as the blue bloods would make cuts to the men's programs that don't pay for themselves (cross country, wrestling, crew, etc.).
!00% I can't imagine a legal argument for finding it unconstitutional.
It's not about the revenue... it's about having the same number athletic opportunities for men and women.
The settlement would seriously undercut that goal on a de facto basis.
That CSC thing seems an awful lot like price fixing. The athletes need a union.
Which I hate to say, as much as I dislike unions.
Think that is coming as well...
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One result - the NCAA is effectively dead
Not a surprise, but this is the proverbial nail in the coffin.
Everybody is waiting for the CSC to stand up and apply some guardrails to NIL While the conferences all said the right things about wanting guidelines, they were happy to eat like pigs at the NIL trough, for fear of falling behind. A complete failure of leadership by both the NCAA and the conferences.
One byproduct of all this - with this settlement, the NCAA is expected to soon grant all scholarship athletes five years of eligibility. The redshirt will be dead, with no more need to limit players to four games in fear of burning a year.
Personally, I love NIL. Shane Gillis said the quiet part out loud - now that everyone can pay their players, the SEC will no longer dominate.
It sure seems like the facade of the student athlete is dead as well.
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Right...so why are these minor league teams affiliated with college names again?
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I can see why the Feds and some states want to de-fund higher ed. When you have $18 B and manage a
pro sports team, doesn't really seem like your main objective is educating students.
Are they not required to be enrolled in classes potentially leading to college degrees?
And isn't there a limit on how many years they can play college football?
IF these were purely minor leagues they would never even sign up for classes and could remain on the team indefinitely.
Fine distinctions are falling by the wayside daily. We'll see how some of those shake out...
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Thanks Mark. What authority will the CSC have?
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From what I can tell, it's just another version of the NCAA
From its website:
The College Sports Commission has been established to ensure compliance with the new rules around roster limits, revenue sharing and student-athlete third-party NIL deals. Over time, the Commission's role may expand to include enforcement of additional related rules as well. The organization will investigate any potential violations of these rules, make determinations regarding potential rules violations and penalties, provide notice and opportunity to be heard, participate in the arbitration process and ultimately administer penalties for violations of these rules.
Sounds toothless to me. The whole thing looks like a major win for Texas schools with big donors.