House v. NCAA settlement approved: Landmark decision opens door for revenue sharing in college athletics

The NCAA's 119-year amateurism model died Friday with a judge's pen as the landmark House v. NCAA antitrust settlement received final approval, opening the door for millions of dollars to be shared between schools and players for the first time.

U.S. District Judge Claudia Wilken gave final approval of the landmark settlement after five years of litigation, ending with nearly one year of discussions and tweaks after the NCAA and power conferences initially voted to settle the suit in 2024. The $2.8 billion, 10-year settlement will pay past players for missed name, image and likeness opportunities and allow colleges to pay current players directly starting July 1.

NCAA president Charlie Baker penned a letter in response to the landmark settlement. 

"Approving the agreement reached by the NCAA, the defendant conferences and student-athletes in the settlement opens a pathway to begin stabilizing college sports," Baker wrote. "This new framework that enables schools to provide direct financial benefits to student-athletes and establishes clear and specific rules to regulate third-party NIL agreements marks a huge step forward for college sports." 

Schools can share as much as $20.5 million of their revenues with players during the upcoming academic year. The settlement also includes $2.8 billion in back payments for athletes who competed between 2016 and 2024. The new revenue-sharing cap will increase by at least 4% each year during the 10-year agreement. 

The House settlement's final approval was twice delayed in April after the judge echoed objectors' concerns over imposing roster limits on current players, one of the pillars of the settlement. Schools were cutting players from rosters in the spring, even though the settlement had yet to be approved, complicating discussions during settlement hearings. The judge asked attorneys to craft a plan to allow current players to be "grandfathered in" with the new roster limits. The NCAA, power conferences and the plaintiffs in the lawsuit instead offered a compromise: schools have the option to keep current players on their rosters and temporarily exceed new limits until their eligibility expires.

The new roster limits were expected to lead to the cutting of nearly 5,000 athletes from teams across the NCAA's 43 sponsored sports. Some sports will increase roster limits compared to previous years, but many will be trimmed despite offering unlimited scholarships within those new thresholds. Football rosters will shrink to 105 players, resulting in schools cutting more than 20 players, though most schools are expected to exceed those limits by grandfathering in current athletes.

The House v. NCAA class-action antitrust lawsuit was filed in 2020 by Arizona State swimmer Grant House and women's college basketball player Sedona Prince seeking an injunction against the NCAA and Power Five conferences. It sought to lift restrictions on revenue sharing of media rights revenues. Powerful antitrust attorneys Steve Berman and Jeffrey Kessler represented the plaintiffs.

The settlement resolved three antitrust suits: Carter v. NCAA, House v. NCAA and Hubbard v. NCAA.

NCAA rules have long prohibited players from cashing in on their NIL, but that changed July 1, 2021 when the organization began allowing players to earn money from third parties and collectives. The House settlement will enable schools, for the first time, to pay players directly.

How schools plan to divvy up to $20.5 million among their sports has been a point of contention, with no legal framework to follow. Most schools are expected to mirror the back-payment formula outlined in the $2.8 billion settlement. That means roughly 75% of future revenue will be shared with football players, 15% to men's basketball, 5% to women's basketball and 5% to all remaining sports. Some schools have opted to mirror the gross revenue each sport averages, which could lead to more than 85% of the salary pool being set aside for football players.

How revenue-sharing will affect skyrocketing NIL deals among third parties is unknown. Still, those deals with third parties and collectives outside the revenue-sharing plan will soon face intense scrutiny from a new enforcement entity starting July 1. Experts believe it will help curb "pay-for-play" schemes between boosters and players far beyond perceived market values. Many multi-million dollar deals with high-profile players were struck in the months before the House settlement's approval so that those deals would not be scrutinized by the enforcement entity, which does not have authority until July 1.

The power conferences are expected to soon announce the College Sports Commission, an organization tasked to oversee the settlement's terms and enforce new rules. The power conferences hired Deloitte and LBI, major players in revenue management for professional sports, to develop software to dissect NIL deals and track players' revenue-sharing contracts. The CSC will police NIL deals over $600 with a new clearinghouse called "NIL Go," sources told CBS Sports. Deloitte will use data from past endorsement deals with athletes to review boosters' NIL deals and determine whether an agreement exceeds an athlete's fair market value.

Schools' revenue-sharing payouts will be monitored by an enforcement arm called "CAP," sources said. 

NIL deals under scrutiny will be subject to an arbitration process, which could speed up decisions on eligibility and penalties under the new system. The NCAA, which had become toothless in NIL enforcement as it was challenged legally state to state, will not be directly involved in enforcing NIL deals.

"I certainly think that's something we'll have to work with on a coordinated basis, but on some level … that could be a really nice way – and it has an arbitration process, and it can do fact finding," NCAA president Charlie Baker said last week. "There's a lot to like about that."

Schools are expected to pay Deloitte as little as $5,000 or as much as $500,000 for the software, according to documents shared with athletic departments last week.

Power conference commissioners react

The newly-formed CSC released a statement shortly after the settlement was finalized with remarks from every power conference commisioner.

"This is a significant moment for college athletics that will provide unparalleled opportunities for student-athletes," ACC commisioner Jim Phillips said. "We look forward to implementing this new system which offers much-needed transparency and structure to create a more sustainable model for the long-term future of college athletics." 

"We look forward to implementing this historic settlement designed to bring stability, integrity and competitive balance to college athletics while increasing both scholarship and revenue opportunities for student-athletes in all sports," Big Ten commisioner Tony Petitti said.

"As we enter this new era of college athletics, it is crucial we do so with structure, transparency, and the success of student-athletes in mind — this settlement and new model will ensure that happens,"  Big 12 commissioner Brett Yormark said. "I look forward to working alongside my colleagues to implement this new system that prioritizes fairness and opportunity for all student-athletes and institutions."

"It's a new day in collegiate athletics," Pac-12 commissioner Teresa Gould said.  "This historic moment allows us to maintain what makes college sports special, the development of young individuals through sport, while also evolving to meet today's student-athletes where they are with new opportunities in a manner that provides long-term stability for collegiate athletics. I am proud to work alongside my colleagues as we implement and introduce the future of college sports."

"The approval of the House settlement agreement represents a significant milestone for the meaningful support of our student-athletes and a pivotal step toward establishing long-term sustainability for college sports, two of the Southeastern Conference's top priorities," SEC commisioner Greg Sankey said. "As the journey to modernize collegiate sports continues, we remain focused on identifying and implementing innovative opportunities for our student-athletes across all sports while maintaining the core values that make collegiate athletics uniquely meaningful."