College sports has undergone a seismic shift in recent years, reshaped by court losses that have changed the NCAA’s definition of amateurism. A new settlement in another case will deliver even bigger changes.
A federal judge in California gave final approval Friday to a $2.8 billion settlement in a class-action antitrust lawsuit that would usher in a new era of direct revenue sharing of millions of dollars between schools and college athletes.
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"Approving the agreement reached by the NCAA, the defendant conferences and student-athletes in the settlement opens a pathway to begin stabilizing college sports," NCAA President Charlie Baker wrote in a letter Friday after the settlement was approved.
The lawsuit was brought against the NCAA and its biggest-revenue conferences by former collegiate athletes, who were not allowed to accept money for the use of their name, image and likeness dating back to 2016.
The NCAA and its member schools, stung by a string of courtroom losses — including a 9-0 decision at the U.S. Supreme Court — agreed to settle House v. NCAA, seeing it as a chance to stop the litigation and bring long-sought stability to college athletics. The settlement could go into effect in a few months.
“We’re all hopeful that this will work,” North Carolina athletics director Bubba Cunningham said.
The $2.8 billion will be paid by the NCAA over a 10-year period and financed by a reduction in payments to conferences and, as a result, schools themselves. All Division I schools, even from tiny conferences, will see some reduction in their NCAA distributions to pay the back damages.
NC State athletics director Boo Corrigan, the athletics director at NC State, said it was time for the NCAA and its member schools to stop fighting — and often losing – and seek a different strategy..
“A good settlement means both sides are a little upset,” he said. “No one walks out of a settlement [saying] we got everything we wanted.”
The settlement was approved by the parties last year and the judge gave initial approval in October, but is still awaiting final approval. The settlement will reshape the relationships between schools and athletes and schools and the NCAA. It will result in fewer athletes on college sports teams, but more of them will be on scholarship.
But few fans are well versed on all the changes that awat and the significance of them.
“I would say that 99.5% of our constituents have never heard of perhaps the most significant thing in higher education — higher education — and college athletics in at least 50 years,” Wake Forest athletics director John Currie said.
What is the House settlement?
Grant House, a former Arizona State swimmer, is one of the lead plaintiffs in the lawsuit against the NCAA and its major conferences (ACC, Big Ten, Big 12, Pac-12 and SEC). His lawsuit and two other similar complaints were combined in court.
The athletes argued that they deserved damages for not being allowed to monetize their name, image and likeness (NIL) as the NCAA has allowed since 2021. They also wanted, moving forward, for broadcast revenue to be classified as NIL, opening the door to potential revenue sharing. The major conferences and the NCAA make the majority of their revenue through selling broadcast rights for football and men’s basketball.
After several years, the dispute wound up with a proposed settlement.
The settlement has three major components: back payments to former athletes since 2016, new roster management within each collegiate sport and, perhaps the biggest change, revenue sharing with current and future athletes.
Senior U.S. District Judge Claudia Wilken — who has become one of the most powerful figures in college sports history, is presiding over the case. Wilken also ruled against the NCAA in the 2014 O’Bannon case and has been handling antitrust cases involving the NCAA since.
How much money can schools share?
Under the settlement, each school would be allowed to share up to $20.5 million with their athletes in the first year, a figure that will rise by 4% annually. Schools in the four best-resourced conferences (ACC, Big Ten, Big 12 and SEC) are expected to share at or near the full amount.
But many schools compete in Division I conferences that don’t generate nearly as much revenue from their television contracts or fill massive stadiums to add to their bottom lines. Despite the gap in resources, they’re competing against schools in the larger conferences on the field.
For some smaller schools in NCAA Division I, $20.5 million is more than their entire annual athletic budget – and they won’t be able to spend to the upper limits, adding to concerns about competitive balance across all sports.
“East Carolina does not have the revenue like an ACC school, so we’ll be sharing at a much lower number with our student athletes,” ECU athletics director Jon Gilbert said.
He added: “Once you leave the SEC and the Big Ten, every conference below that, you’re going to see tiers. You’re going to see schools at the very high end of the spectrum sharing the full $20.5 [million] and then you’re going to see a school in that same league sharing a number that is much less than that.”
How quickly will this be implemented? Are schools ready?
If the settlement is approved, the changes would take effect July 1 and be implemented for the 2025-26 academic year. Schools have had more than a year to plan for the changes, but that doesn’t mean everyone is ready for the impact.
“We are evolving,” Gilbert said. “We’ve operated under the same model for a very long time. This is all happening very quickly.”
How quickly?
“We’ve got about 45 days that 70 schools can give $20 million to teenagers,” Cunningham said. “So it’s $1.4 billion by July 1. Okay, here you go. Yeah, we’re not prepared for it.”
Once the House settlement is approved, other massive changes to college athletics – including agreement on a new College Football Playoff system, the appointment of someone to run the College – are expected to quickly follow.
How did the conferences reach that revenue-sharing amount?
The $20.5 million figure didn’t come out of nowhere. Athletic department revenue mostly comes from ticket sales, television rights and sponsorships. The 70 schools in the five conferences named in the lawsuit averaged their revenue and then divided by 22%.
Schools already pay for scholarships — and other aspects of college and sports (nutrition, training) — for their college athletes. When you combine those expenses with the 22% in revenue sharing, the average power conference school will be spending about 50% of revenue on athletes.
“It approximates what the pros are doing,” Cunningham said.
Players and owners in the NBA and NFL split sport-related income about evenly. In the NHL, players get a slightly larger percentage of revenue. The revenue splits in those leagues are the result of collective bargaining agreements between the players’ unions and owners.
In college athletics, there is no collective bargaining.
How will schools raise the money?
Athletic departments have generally spent whatever money they have earned or raised through donations, part of their nonprofit status. Few have a spare $20.5 million sitting around. So schools have been aggressive in looking for new sources of revenue to cover the new costs.
“The bottom line costs $20.5 million more next year than it did this year,” Currie said.
NC State proposed an athletics budget of $133.9 million for the fiscal year beginning July 1. If revenue sharing goes into effect, the budget will bump up to $147.4 million with additional institutional support.
NC State is considering selling corporate naming rights to Carter-Finley Stadium. The school will hold a Chris Brown concert at the stadium during the football season. NC State rolled out a new pricing plan for football season tickets, parking and donations last year.
“It’d be great if we could find someone to, I don’t know, give us $100 million, but I think you just got to work at it every day, just got to chip away,” Corrigan said.
Cunningham said UNC, which has an athletics budget of about $140 million, has been “fairly conservative” in the past in tapping potential sources of revenue, such as scoreboard advertising or permanent signage, though he explained a more aggressive approach last year. UNC, likewise, is seeking a naming rights sponsor for Kenan Stadium.
The school only recently began selling beer at football and men’s basketball games.
“Do you go to hard liquor? Do you do more signs? Do you do more naming rights? Are we going to get to jersey patches? Can we create digital content or any other kind of content that we can monetize and sell to fans? There’s things that we haven’t done in the past; it’s just we didn’t feel like we needed to do,” he said.
“As a not-for-profit, if you will, we’ve always spent what we created. So now we have another expense category. We have to think about how do we cover that category with what we can create. Are there other expenses that we have that we don’t need anymore? Or should we limit what we do?”
UNC sponsors 28 sports, a high number compared to most other universities. And the school is nationally competitive in many of them, including women’s sports such as soccer, tennis, field hockey and lacrosse. Cunningham said the university sees value in offering a broad variety of sports. UNC Chancellor Lee Roberts said the school intends to continue all its current sports.
NC State and UNC are likely to get help from the state before the end of the year as state lawmakers have proposed distributing revenue from sports betting taxes to the schools with the Senate offering a much larger chunk for the two ACC members in its budget. Even under the House of Representatives’ less generous plan, the schools would receive an estimated $14 million in the next fiscal year.
At Wake Forest, which sponsors 18 sports, the university may help to bridge the gap for one of the smallest undergraduate enrollment schools playing at the highest level of college athletics.
“Ultimately, it comes down to an institutional decision about how does athletics and the sports enterprise, if you will, fit into your institutional strategy,” Currie said. “Now, more than ever, institutions have to make a decision. It's no longer, athletics is an auxiliary. It's something that's nice to do, but it needs to pay for itself and all that kind of stuff that was a fantasy from the beginning. At Wake Forest, athletics is one of the pillars of our institutional strategy.”
How will the money be split?
There is a formula for splitting the $2.8 billion in back damages that the NCAA and the conferences have agreed to pay. Roughly 75% of the damages will go to football players, 15% to men’s basketball players, 5% to women’s basketball players and 5% to athletes in all other sports.
That generally tracks with how revenue is generated by athletic departments — and how schools plan to distribute revenue sharing to current and future athletes.
“I think you’ll see that applied loosely based on the revenue and how the revenue comes in,” Gilbert said.
Football and men’s basketball generate almost all of the revenue for college athletic departments. That money has been used for decades to prop up other sports.
“A big part of why we're trying to be more aggressive when it comes to sponsorships and marketing is to fund these other sports,” UNC Chancellor Lee Roberts said. “Football and men's basketball can pay for themselves, but it's getting harder for them to pay for all the other sports as well, and that means finding new revenue opportunities.”
It will be up to athletic departments and, especially coaches or general managers in each sport, to decide who gets what.
“Distribution of the revenue, $20.5 million for each school, is the decision of the school going forward,” Cunningham said. “So the [athletics director] can make the decision, but what we’re doing — and most ADs are going to do – is allocate some of that money to each sport and then allow the coach to make the decision of how to allocate it within the team.”
How will the money be split among the players?
With coaches or program-specific general managers handling the distribution, some players will be paid more — lots more — than their teammates. Starters will make more than backups. Players at premium positions will make more than teammates at less important spots.
“The quarterback and the left tackle are going to make more money than the punter,” Gilbert said. “That’s just how it’s going to be.”
That’s how it is in professional sports. The power-hitting right fielder makes more than the last man on the bench. The quarterback gets paid more than the center, who makes more than the backup safety.
But it’s a sea change for college sports.
“Five years ago, everybody got exactly the same thing,” Currie said. “You had 85 football players on scholarship. Number one, number 85, got exactly the same thing. And so they’ve gone from exactly the same thing to market overnight.”
The payments are meant to be for licensing of the players’ name, image and likeness. The athletes won’t be employees of the university.
What about roster limits?
The settlement would sharply limit roster size for most teams, but would eliminate any scholarship limits for them — a move made to keep some competitive balance and with an eye toward heading off potential litigation.
Since rosters are limited, schools with larger budgets can’t stockpile all the talent.
In football, for example, teams have routinely carried 120 to 125 players but can only award 85 scholarships. Under the agreement, teams would be limited to 105 players, but could award scholarships to all of them. Schools can still take walk-ons, that is players without a scholarship, but they will count toward the 105-player limit.
Other sports will be impacted, too. In college baseball, teams have shared 11.7 scholarships across a roster that often has between 40 and 50 players. With the settlement, baseball rosters will be limited to 34 players but no restrictions on scholarships. That’ll be great for players who have only received partial scholarships in the past, but it will reduce the overall number of players on the team, cutting opportunities.
Each sport has a limit. Women’s basketball is the only one that won’t increase the number of allowable scholarships, remaining at its current 15.
Schools have already moved to reduce the size of their rosters, in advance of the settlement being approved by Wilken, letting go of walk-ons or canceling spots for incoming players.
Those moves have become the last sticking point in the settlement with Wilken indicating that she would scuttle the entire agreement if schools didn’t agree to allow players to remain on rosters or accept spots on teams – without regard to the new limits.
At most schools, the number of total student-athletes will fall, but the number of scholarship athletes is likely to rise.
UNC had 850 athletes during the 2023-24 school year, a number that will shrink to 735 with the limits on roster spots in 2025, Cunningham told the UNC Board of Trustees. But the Tar Heels only have 320 full scholarships and that number could grow all the way to 735 to match the roster spots.
“I don't think we'll get there,” Cunningham said. “We certainly won't get there quickly, but that gives you a lot of space to build your roster in a different way, other than rev share.”
NC State reported that it had 571 athletes and 286 full scholarship equivalents in the 2023-24 academic year.
ACC rival Clemson and many SEC schools are expected to fund all of the additional scholarships. Those schools don’t sponsor as may sports as UNC.
Additional scholarship costs would reduce a team’s revenue share cap, the $20.5 million figure, by the same amount. That could lead schools to not increase the number of scholarships at this time. But Cunningham said he expects that provision to change quickly, perhaps by the second or third year.
Will a true marketplace develop?
LBi Software, a New York technology company, will develop a cap management and reporting platform, the NCAA said, to ensure tracking, reporting and enforcement of direct payments to athletes.
The hope among schools is that they’ll have a true sense of what the market is for players in various sports and conferences. The information won’t be identifiable by individual athletes.
“We should get some market data over the next couple of years or what are the standards within college athletics,” Cunningham said. “We’re in a transition period, and we’re probably in a period of uncertainty for another two or three years before the market really can demonstrate what is the right range of compensation for student-athletes by sport, by position.”
He added: “Hopefully, we’ll say, OK, an average quarterback in the ACC is paid this, a running back that. You get some sense of what is the marketplace for those particular positions.”
Who is going to monitor the payments?
Nobody in college athletics seems to trust that their rival school is going to follow the rules. It’s one reason the NCAA rulebook ballooned in size over the previous decades. But schools have also gotten better at fighting the NCAA, and violations cases have dragged on and on.
Instead, a new College Sports Commission run by Deloitte, one of the nation’s biggest auditing firms, will monitor schools’ compliance with the new rules. The Commission launched its website hours after the final certification and named MLB executive Brian Seeley as its top officer. The website spelled out the new rules.
“They're going to be the enforcement agency on all of that,” Cunningham said. “So we have a reporting requirement that we all have. It's by school, it's by individual student-athlete. So they're the they're going to be the ones. They also have the investigator group, and if you can't agree with their ruling, then you can go to then you go to arbitration, and arbitration is going to give them some limited subpoena power to do it, and they are telling us that these things will be adjudicated within 45 days. So the process should be a lot quicker. It'll be interesting to see. It's a brand new system. We'll see if it works.”
The ACC, Big Ten, Big 12 and SEC are pushing for schools to sign a document binding them to the enforcement policies, even if it violates state law, according to Yahoo Sports.
What about NIL?
The NCAA has allowed athletes to receive payments for their name, image and likeness since July 1, 2021. NIL was originally envisioned as a way for athletes to endorse products in commercials or through social media, receive money for signing autographs or be paid for their participation in a video game.
But collectives quickly sprung up at many schools, collecting money from boosters or fans and then funnelling money to athletes for, basically, attending their school. Players are signing multi-million deals with school collectives, which require nominal work or appearances.
Third-party NIL deals will still be allowed – think Duke basketball star Cooper Flagg, who signed endorsement deals with New Balance and Gatorade. Deloitte will track all deals valued at $600 or more to see if they are consistent with market value. These payments would be in addition to any revenue-sharing monies paid to athletes directly from the school.
Deloitte will be responsible for making that determination through its “NIL Go” clearinghouse. Deloitte told ACC athletic directors and coaches that 70% of past deals from collectives would have been denied while 90% of past deals from public companies would have been approved, Yahoo Sports reported.
“The new enforcement entity will use the system to help it evaluate whether these deals are within a reasonable range of compensation and made with the purpose of using a student-athlete's NIL to advance a valid business purpose, as outlined in the proposed settlement,” the NCAA said.
Once the House settlement is approved, other massive changes to college athletics – including agreement on a new College Football Playoff system – are expected to quickly follow.
Key dates ahead
June 6, 2025: Settlement approved; settlement-related NCAA rules go into effort, as adopted by the NCAA Division I Board on April 21, 2025
June 11, 2025: NIL Go portal launches
June 15, 2025: Opt-in deadline for non-defendant schools to fully commit to revenue sharing
June 2025: Opt-in schools must “designate” student-athletes permitted by the settlement to remain above roster limits
July 1, 2025: First date for direct institutional revenue sharing payments to student-athletes
July 6, 2025: Opt-in schools must “designate” student-athletes permitted by the settlement to remain above roster limits
Start of 2025-26 academic year: With the exception of “designated” student-athletes, Fall sports must be at or below roster limits by their first day of competition
December 1, 2025: With the exception of “designated” student-athletes, Winter and Spring sports must be at or below roster limits by their first day of competition or December 1, whichever is earlier