Grant House, the plaintiff in a now settled antitrust lawsuit against the NCAA, swam for Arizona State University.
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Federal district judge Claudia Wilken granted final approval to a multi-billion-dollar settlement in the yearslong House v. NCAA lawsuit late Friday evening, effectively transforming college sports: Starting July 1, institutions will be allowed to pay student athletes directly.
In accordance with the settlement, the National Collegiate Athletic Association and colleges in Division I conferences will distribute nearly $2.8 billion in back damages over the next 10 years to athletes who competed any time since 2016, as well as to their lawyers. The case also allows each college that opted in to pay their athletes collectively up to $20.5 million per year, in addition to scholarships. That figure will increase incrementally over time.
The ruling, which technically resolves three antitrust lawsuits against the NCAA, essentiallyturnsstudent-athletes from amateurs into professionals. But experts say this isn’t likely to end court battles over athletics. The creation of the revenue-sharing model (where schools distribute money earned from areas such as media rights or merchandise), combined with existing turmoil over the regulation of name, image and likeness (NIL) deals, will only invite more lawsuits, they say.
“The judge said, in essence, this is not a perfect settlement that solves everyone’s concerns, but it makes progress towards ‘righting the wrongs’ of higher education’s desire to maintain amateurism status for the players but no one else,” Karen Weaver, adjunct assistant professor in the graduate school of education at the University of Pennsylvania, wrote in an email to Inside Higher Ed.
Although many colleges began making changes to their programs in anticipation of the settlement’s approval, the timing of the ruling could present logistical challenges as they move to start revenue-sharing with students from the July 1 deadline set out in the suit.
Current and former athletes have celebrated the ruling.
“It’s historic,” former college basketball star Sedona Prince, a co-lead plaintiff in one of the lawsuits, told ESPN. “It seemed like this crazy, outlandish idea at the time of what college athletics could and should be like. It was a difficult process at times … but it’s going to change millions of lives for the better.”
Wild West Yet to be Tamed
Judge Wilken’s ruling comes nearly two months after both parties presented arguments in early April for approving the settlement, and nearly five years after the suit was first filed in 2020. But contentious debates over how to manage paying student athletes really erupted in 2021, when NIL deals were first legalized.
Since then, collectives made up of alumni and boosters have paid athletes millions of dollars to play at schools through unregulated NIL partnerships. Top football and basketball players have earned the most.
College leaders have argued that the collectives could give wealthier institutions an unfair recruiting advantage. The House settlement, which not only allows colleges to pay athletes directly but also gives conferences the power to regulate booster influence, could help solve that problem.
“For several years, Division I members crafted well-intentioned rules and systems to govern financial benefits from schools and name, image and likeness opportunities, but the NCAA could not easily enforce these for several reasons,” NCAA president Charlie Baker wrote ina statementFriday. “The result was a sense of chaos: instability for schools, confusion for student-athletes and too often litigation.”
“The settlement opens a pathway to begin stabilizing college sports,” Baker said. “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.”
The settlement alsoestablishes a new clearinghouse, run by Deloitte, that will vet any endorsement deal between a booster and an athlete worth more than $600, with the goal of ensuring it is for a “valid business purpose.”
Still, doubts remain about how the watchdog will work; one commenteron Xnoted that all it takes for boosters to create an NIL regulatory loophole is to pay athletes in multiple $599 payments rather than one mass sum
Despite the efforts to regulate NIL payments through the clearinghouse, Weaver said the settlement will create “a feeding frenzy of agents and dealmakers capitalizing on a few athletes wealth while schools scramble to lock down players who could bolt for a better offer at any moment.”
“I expect to see the first Title IX lawsuits, and requests for an immediate stay, filed as soon as this week,” she said. “It’s important for higher education leaders to understand the far-reaching impact on our industry—it’s only just begun.”
