Welcome to a new era: House v. NCAA gets final approval

Breaking down the biggest Friday news dump in college athletics history

Collegiate basketball bearing the NCAA logo. Credit: Ben Hershey on Unsplash

April 7 marked two momentous occasions for the NCAA. First, the Men’s Basketball Championship is scheduled to tip off tonight. Second, and perhaps more importantly, Judge Claudia Wilken presided over the final hearing of the long-discussed House v. NCAA settlement.

There were some hiccups in that hearing that led to a delay, but no longer. Late on Friday, June 6, Judge Wilken gave the settlement her final approval.

To see the settlement’s importance, you only have to look at the seating arrangements, which will take up approximately two entire courtrooms. It’s easy to say that just about everyone with skin in the NCAA game is interested in what happened.

It wasn’t really a question on if Judge Wilken would give her approval to the House settlement - which also includes settling similar antitrust cases against the NCAA in Hubbard v. NCAA and Carter v. NCAA - it was a matter of when. And that when was today.

So, what do you need to know about the settlement and how it’s going to affect the college sports landscape going forward? Consider this your one-stop shop.

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Recap of the House saga:

The case that can kill amateurism - and the NCAA

NCAA enters into a new era with House settlement

House v. NCAA settlement gets preliminary approval

Judge Wilken puts House v. NCAA settlement on hold

U.S. Dept. of Education releases guidance on proposed House settlement

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What is the House settlement?

At this point, if you’re not up on the case and settlement, I’d really recommend reading through some earlier pieces to get the full nuances of what’s on the table. If you don’t have the time for that or just need a quick refresher, I’ve got you here.

Essentially, the settlement will:

• Force the NCAA to back-pay $2.8 billion in NIL-related damages to athletes on TV that were not eligible to get paid;

• Allow schools to opt-into direct revenue sharing of TV rights with student-athletes, capped at 22 percent of the average Power Four department’s overall revenue, leaving us a roughly $20.5 million revenue sharing cap;

• Establish an outside enforcement agency to monitor revenue sharing violations;

• Establish a third-party clearinghouse operated by Deloitte to monitor and track the value of all third-party NIL deals over $600; and

• Eliminate sport-specific scholarship caps and instead instating roster size caps. For football, that would be 105 players, up from the previous 85 player FBS scholarship cap.

That’s a whole lot of change. But let’s dig a little deeper into what comes next.

When is this going into affect?

Believe it or not, the House settlement’s terms are slated to be implemented fully by the start of the Fall 2025 semester. More precisely, the start of the new academic year on July 1, 2025. That means revenue sharing is coming this football season and teams don’t have much time to reckon with the changes coming from the court.

Luckily, athletic departments have been heavily planning for this, so there shouldn’t be anyone caught by surprise.

Where is the money for those damages coming from?

$2.8 billion is a massive amount of money, so it’s fair to ask where that money is coming from.

The damages, according to Yahoo! Sports’s Ross Dellenger, is set to be paid out over the course of 10 years in $280 million installments to athletes. If an athlete believes they are eligible for payment of damages, they would have needed to submit a claim via the Settlement Administrator by January 31, 2025.

But that doesn’t answer where the money is coming from, only how it’s going to be given to the athletes. The Associated Press’s Eddie Pells reported that the NCAA itself is going to cover $1.2 billion of the total price tag, leaving $1.6 billion to the member schools.

The portion covered by the schools is covered in witholdings from the NCAA, most of which will come from NCAA Championship media deals like March Madness and the FCS Playoffs. According to The Athletic’s Nicole Aurebach and Justin Williams, 24 percent of the total bill will be covered by the Power Five conference - about $672 million or $134.4 million per conference. 10 percent will come from Group of Five conferences - $280 million in total or $56 million per conference. 13 percent, or $364 million, will come from FCS schools, breaking down to about $28 million per conference. Finally, the remaining 12 percent or $336 million will be paid by non-football Division I schools.

How are schools accounting for this?

Between that and revenue sharing opt-ins, schools are having to be creative in finding new revenue streams.

The most publicized one is Tennessee’s “talent fee surcharge,” where a 10 percent fee is being added onto all season ticket sales at Rocky Top to be distributed directly to student-athletes. While Tennessee is the only publicized one so far, other major schools like Ohio State have considered adding talent fees of their own.

In the mid-major area of Group of Five or FCS programs, perhaps new revenue boosts like Coastal Carolina’s free concessions may take over. After all, the Chanticleers have required donations of a custom amount on all season ticket sales.

I would expect to see prices for tickets, parking and merchandise to rise some in the face of the House settlement to account for the multi-million dollar amounts each school will likely have to pay. I would hope most schools would keep any price hikes reasonable, but that’s yet to seen.

What about revenue sharing? How will that work?

That’s something we don’t really know yet.

What we do know is that schools that opt-into the House settlement will be able to share up to $20.5 million of revenue with their athletes directly. For most, this will likely come off of media deals and TV contracts.

In terms of practicality, we just don’t know how that will be done. Is it a pre-season lump sum? Only paid out during the season? A regular paycheck across the academic year? Who knows? It may be up to the schools to decide, it may not.

We do know where most of the money is going.

And, just like you guessed, a lion’s share is going to the football and men’s basketball rosters from what we’ve seen. In the twilight of their term, the Biden administration’s Office of Civil Rights, a subset of the Department of Education, released guidance saying that all House payments were to be equitable across genders. Within months, the Trump administration’s OCR rescinded that guidance, leading to most of the money being earmarked for football and men’s basketball.

The Athletic’s staff has reported that most schools are in the ballpark of 75 percent of the cap going towards football, between 15 and 20 percent to men’s basketball, 5-10 percent to women’s basketball and the remaining money to non-revenue Olympic sports.

You mentioned roster caps. Is that different than it is now?

Yes it is.

This was actually the biggest hurdle the case had to overcome before getting approval. In fact, Judge Wilken actually put the whole thing on pause and threatened to blow the entire deal up over a lack of resolution on roster caps.

Currently, the NCAA has no hard roster caps, instead holding scholarship caps. For football, rosters can swell in excess of 140 players like seen on Nebraska last season. However, only 85 full scholarships can be awarded.

The House settlement would eliminate scholarship caps entirely, instead putting roster caps in place.

But what’s the difference?

Before, the NCAA didn’t put caps on the amount of players that could be on a roster, only the amount of scholarship funding that could be spread across the roster. For example, you see this best in baseball which has a 11.7 full-scholarship cap that is often distributed across the entire roster as partial scholarships.

Under the House settlement, that cap is no more. Instead, the roster is maxed at 34 players, which is just a tick under the average of 35 players. For baseball, it’s better as all 34 players could have full athletic scholarships if the school so pleases.

Other notable changes between roster caps and scholarship caps include:

• Football: 105 player roster cap up from 85 player scholarship cap

• Ice Hockey: 26 player roster cap up from 18 player scholarship cap

• Track: 45 player roster cap up from 12.6 (men’s) and 18 (women’s) scholarship caps

• Wrestling: 30 player roster cap up from 9.9 (men’s) and 10 (women’s) scholarship caps

The two sides came to an agreement to grandfather in all current athletes, so that anyone on a current roster has a spot and doesn’t have to face a late-offseason cut. As schools teach - or, more aptly, play - out these grandfathered students, they have to make efforts to get down to that instated roster cap.

Is this the end of NIL Collectives?

Not by a long shot.

NIL collectives will have a strong place in the athlete compensation puzzle.

Collectives and third-party actors will still be able to broker deals with athletes directly, just as they are now. However, instead of having free rein where most deals were more amounting to a pay-for-play system rather than the NIL deals envisioned, such as TV commercials and jersey sales, all deals will have to be routed through a new NIL clearinghouse to determine their eligibility.

We’ll get into detail on that clearinghouse later, but the goal is to create a process that moves quickly, efficiently and fairly in assessing deals. According to Sport Business Journal’s Ben Portnoy, all deals over $600 will go through the clearinghouse.

This is a controversial part of the puzzle, with many assuming schools will use NIL deals as they were to circumvent the $20.5 million revenue sharing cap. However, all reporting indicates that the clearinghouse and the brand new College Sports Commission that it’s a part of will be very stringent on what it allows and what it doesn’t allow. Namely, they want fair market compensation for athletes, both in terms of making sure third parties are paying athletes’ their worth, as well as ensuring there aren’t a ton of inflated deals used to circumvent the cap.

If a deal is not permitted to be signed, there will be an arbitration appeals process according to Sportico’s Michael McCann.

So, to answer the header question, no, NIL collectives are not going anywhere. But they will have to adapt their rulings to gain approval from the Deliotte-ran clearinghouse.

Will the settlement cut down on the cases against the NCAA?

Oh, my sweet summer reader. Absolutely not.

In fact, I’d wager that more lawsuits are coming down the pipe.

For one, Fontenot v. NCAA still looms outside of the House settlement. This case, like House, revolves on antitrust claims that the NCAA is illegally restricting players’ abilities to make money on themselves. The House case focuses on NIL rights through television appearances. Fontenot goes further, alleging all activities are anti-competitive and athletes should have no restrictions whatsoever on their earning potentials.

It goes even deeper with Johnson v. NCAA, which alleges athletes represent their schools on an employee basis and should be recognized as such. The suit aims to classify all NCAA athletes as employees, earning them at least minimum wage for all athletics-based activities.

Then there’s the Title IX considerations, of which the settlement makes none. I would assume that as soon as revenue starts to be divvied up, a prominent women’s athlete or class of women’s athletes would sue the NCAA alleging Title IX violations. Whether that will stand in court or not is another story, but it’s a battle that surprisingly hasn’t been waged.

You could also see suits that follow some of the objections to the settlement, where athletes were prematurely cut from their sports’ rosters ahead of the settlement’s approval. These athletes, if they weren’t able to find new homes, could allege serious damages from the premature removal of their roster spots, especially with the final settlement grandfathering them into competing for their sports. That could amount to be a costly class-action against the NCAA and member conferences that agreed to the settlement.

Will this rein in a lot of the inequities we see?

We won’t know that yet, but there’s at least a design to accomplish that and get everyone on a level playing field.

For one, the settlement was approved by the Autonomous Five (ACC, Big Ten, Big 12, PAC-12 remnants, and SEC) and the NCAA, meaning all member schools have to abide by those rules. It will supersede state laws and make sure everyone has the same rules, regulations and guidelines while engaging in revenue sharing and NIL-related activity.

Sure, we’ll still see budget-related inequities, but that’s a given in college athletics. Schools like Ohio State, Clemson and Georgia have way more money available to them than the Hawaiis, Bowling Greens and South Alabamas of the world. There’s just a firm cap on how much those bigger schools can flex their pocketbooks to out-bid their rivals for talent.

Going further, the settlement establishes a new College Sports Commission (CSC) to oversee and enforce all rules relating to revenue sharing from the settlement, as well as running a new NIL clearinghouse where all NIL deals of over $600 will have to gain clearance. The commission will be led by Bryan Seeley, a high-ranking executive at Major League Baseball and former assistant U.S. attorney. At MLB, Seeley headed up the Department of Investigations since 2014, which oversaw cases involving domestic violence, performance enhancing drugs and more. According to ESPN’s Jeff Passan, Seeley “earned a reputation as a strong and competent manager whose department…consistently delivered solid work.”

Seeley will now have a daunting task of cleaning up the wild west of NIL that has run rampant the past few seasons.

Is this going to kill Olympic sports?

I wouldn’t say kill, but things aren’t looking great.

Obviously, this settlement is geared towards what we call “revenue sports.” Those, essentially, are the sports that bring revenue into an athletic department like football, men’s and women’s basketball. Universities often have some other specialty revenue sport like volleyball, ice hockey, baseball or softball as well.

Notice how we didn’t talk about sports like gymnastics, track and field, cross country, rowing, wrestling, or any others?

Those sports are going to be hurting. Simply because there isn’t going to be as much money funneled into them and, with roster caps in place, there will be less athletes in those sports.

Additionally, in schools that may not be able to afford revenue sharing in the House settlement but want to participate, we may see these non-revenue sports get cut. And some already are. UTEP nixed women’s tennis. Cal Poly put the kibosh on swimming and diving. Most shockingly, Grand Canyon shuttered their championship-winning men’s volleyball program.

All of these? Olympic sports.

Things are going to get difficult in the Olympic sport world, unfortunately. Hopefully, when this isn’t so new, we see more sports return, but that’s unlikely.

How does it affect athletic department operations?

It’s going to have a massive affect.

To start, all Power Five schools (yes, this includes the PAC-12) will automatically be bound to the House settlement. Those programs are already looking into how to move the money around to pay their athletes.

Group of Five schools (those in the American, Conference USA, Mid-American, Mountain West, and Sun Belt) will be able to opt in or out each year. According to the CSC, the deadline for Group of Five schools to opt into revenue sharing is June 15 - just nine days after the settlement was approved.

This settlement is already making schools consider their futures. Small universities like Saint Francis may consider moving to non-scholarship Division III, which the Red Flashes did, starting in the 2026 academic year.

To end this all off, the House settlement is unlike anything else we’ve ever seen in college athletics. Everything changed in the blink of an eye and now schools have to figure out how to account for that.

It won’t affect the on-field product much, but as time passes, we’ll see more and more pitfalls and successes from this landmark decision. And, who knows, maybe another case we discussed here will come in and throw everything off in a few short years?

Either way, SID Sports will have you covered on what it all means, how it’s affecting your favorite team, and why it’s happening.

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