College sports will never be the same.
A California judge on Friday evening approved the NCAA’s landmark settlement of three antitrust cases collectively known as the “House settlement,”, ushering in a new era.
“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,” said Tony Petitti, Commissioner of the Big Ten Conference.
The key components of the settlement have been well understood for months, and schools like Indiana have been preparing for this day.
Here are the underpinnings of the settlement:
— Athletes will be paid directly by the schools. Each school is permitted but not required to share up to a defined amount of revenue annually with their athletes. Per the settlement agreement, the cap is computed by taking 22% of the average of certain defined power school revenues, including ticket sales, television money and sponsorships.
In year one of the settlement — July 2025 through June 2026 — the cap amount is projected to be $20.5 million. That amount will increase in subsequent years. Schools can allocate those funds across specific sports and athletes as they desire. Most schools are planning to allocate the vast majority to the top revenue-producing sports — football and men’s basketball.
Athletes can still get NIL deals with third-parties above and beyond this school-funded revenue sharing.
— A new enforcement entity, the College Sports Commission, will be operated mostly by the power conferences, and immediately takes effect. Any new contract between an athlete and a third-party entity, such as a business, booster or collective, is now subject to a new Deloitte-run NIL clearinghouse.
The clearinghouse, called “NIL Go,” will evaluate NIL deals between athletes and third parties to determine if they are legitimate arms-length arrangements. Contracts signed before the settlement approval and paid out before July 1 were not subject to the clearinghouse.
— All sports will have roster limits rather than scholarship limits. Football’s roster limit will be 105 players. Men’s and women’s basketball will be 15. While most schools exceed those limits now when including walk-ons, current athletes are grandfathered in.
Under this new model, schools will have the option to offer partial or full scholarships to every student-athlete on a team’s roster, as long as the total number of student athletes stays within the sport’s specific roster limit. If schools choose to create new scholarships beyond the historic scholarship limits, that cost is expected to count against the revenue-sharing cap, at least in the short-term.
— The House settlement will pay thousands of former athletes (who played from 2016-2024) $2.8 billion in backpay from lost name, image and likeness (NIL) compensation.
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