Judge Claudia Wilken granted final approval to the settlement of House v. NCAA on Friday night, permitting colleges to directly compensate players through revenue sharing for the first time. This approval, expected for some time, signifies the end of the NCAA’s longstanding model of amateurism, which prohibited athletes from earning money while in school.
Effective July 1, schools can distribute up to $20.5 million of their revenues to athletes, with this cap set to increase by a minimum of 4 percent annually over the next decade. Those exceeding the $20.5 million threshold will face penalties from the College Sports Commission, a newly established enforcement body introduced post-settlement. The CSC, formed by the Power Four conferences, aims to transfer control and oversight of college sports away from the NCAA to the power conferences.
The settlement also designates $2.8 billion for retroactive payments to athletes who missed out on earning opportunities between 2016 and 2024, with former power-conference football and men’s basketball players anticipated to benefit most. The resolution resolves three separate antitrust lawsuits against the NCAA, notably initiated by Grant House and Sedona Prince.
Furthermore, this development builds upon the precedent set by the NCAA v. Alston Supreme Court case four years ago, which permitted academic expenses to be covered for athletes. Subsequently, the NCAA eliminated restrictions on college athletes capitalizing on their names, images, and likenesses (NIL).
Although NIL arrangements have been prone to misuse by boosters for paying star players, they will persist under the House v. NCAA settlement. An NIL clearinghouse managed by Deloitte will be introduced to monitor athletes’ deals and ensure they comply with fair market value standards.
The CSC will be responsible for overseeing and enforcing the regulations surrounding the new revenue-sharing system, including the NIL clearinghouse. Bryan Seeley, a former MLB executive with extensive investigative experience, is reportedly the leading candidate to serve as the CEO of the CSC.
As the $10 million threshold for men’s basketball rosters next season and substantial NIL payments to Ohio State’s football team demonstrate, the CSC will face significant challenges in managing NIL transactions. Additionally, schools can pursue their own NIL agreements, subject to scrutiny by the clearinghouse for deals exceeding $600 to assess their legitimacy and fair market value.
In April, the NCAA’s Division I Board of Directors ratified various proposals awaiting settlement approval. Notably, 153 rules from the organization’s handbook, encompassing NIL compensation and regulation, were rescinded in favor of roster limits and eligibility standards.
