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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowHours before college basketball crowns its next men’s championship team, the future of college sports will be hanging in the balance in a California courtroom.
U.S. District Judge Claudia Wilken’s scheduled hearing Monday in a courtroom in Oakland is expected to be the last one before the changes will truly begin under an industry-changing, $2.8 billion settlement of a 5-year-old lawsuit against the Indianapolis-based NCAA and the nation’s largest conferences. Among other things, it will clear the way for schools to share up to $20.5 million each with their athletes.
Wilken already has granted preliminary approval for the settlement. It was unknown whether she will give final approval at Monday’s hearing, which is expected to include testimony from some of those objecting to details of the sprawling plan. LSU gymnast and influencer Olivia Dunne is among the 18 people scheduled to testify, though she is expected to appear via Zoom.
The new structure outlined by the settlement, which represents a shift in billions of dollars from the schools into the pockets of athletes, is supposed to go into effect on July 1.
Universities across the country have been busy making plans, under the assumption Wilken will put the terms into effect.
“We’re going to have a plan going into July 1, then we’re probably going to spend the next year figuring out how good that plan is and how we need to modify it going forward,” said Florida athletic director Scott Stricklin, whose department is among the biggest in the country and includes a Gators men’s basketball team playing for the national title Monday night against Houston.
The so-called House settlement, named after Arizona State swimmer Grant House, actually decides three similar lawsuits that were bundled into one. The defendants are the NCAA and the Southeastern, Big Ten, Atlantic Coast, Big 12 and Pac-12 conferences, all of whom have been touting the settlement as the best path forward for their industry.
“It’s a huge step forward for college sports, especially at the highest level,” said NCAA President Charlie Baker, whose organization continues to seek antitrust protections from Congress. “My biggest problem with the way the whole thing works right now is the schools have been removed from the primary relationship with the student-athletes.”
The most ground-shifting part of the settlement calls on schools from the biggest conferences to pay some 22% of their revenue from media rights, ticket sales and sponsorships—which equals about $20.5 million in the first year—directly to athletes for use of their name, images and likeness, or NIL.
Still allowed would be NIL payments to athletes from outside sources, which is what triggered the seismic shift that college sports has endured over the last four years. For instance, Cooper Flagg of Duke reportedly makes $4.8 million in NIL deals from groups affiliated with the school and others.
The settlement calls for a “clearinghouse” to make sure any NIL deal worth more than $600 is pegged at “fair market value.” It’s an attempt to prevent straight “pay for play” deals, though many critics believe the entire new structure is simply NIL masquerading as that.
Another key element is the $2.8 billion in back damages to athletes who played sports between 2016 and 2024 and were not entitled to the full benefits of NIL at the time they attended schools. Those payments are being calculated by a formula that will favor football and basketball players and will be doled out by the NCAA and the conferences.
The settlement also calls for replacing scholarship limits with roster limits. The effect would be to allow every athlete to be eligible for a scholarship while cutting the number of spots available.
There will be winners and losers under such a formula, though some fear it could signal the end of the walk-on athlete in college sports and also imperil smaller sports programs that train and populate the U.S. Olympic team.
Lawsuit Q&A:
Q: What is the House settlement and why does it matter?
A: Grant House is an Arizona State swimmer who sued the defendants. His lawsuit and two others were combined and over several years the dispute wound up with the proposed settlement that will create a new substructure for college sports. What’s groundbreaking is that it ends a decades-old prohibition on schools cutting checks directly to athletes. Now, each schools will be able to make so-called NIL payments to athletes, compensating them for use of their name, image and likeness.
Q: How much will the schools pay the athletes and where will the money come from?
A: In Year 1, each school can share up to about $20.5 million with their athletes, a number that represents 22% of their revenue from things like media rights, ticket sales and sponsorships. Alabama athletic director Greg Byrne famously told Congress “those are resources and revenues that don’t exist.” Some of it will be raised through ever-growing TV rights packages, especially for the newly expanded College Football Playoff. But some schools are increasing costs to fans through “talent fees,” concession price hikes and “athletic fees” added to tuition costs.
Q: What about scholarships? Wasn’t that like paying the athletes?
A: Scholarships and “cost of attendance” have always been part of the deal for Division I athletes, and there’s certainly value to that, especially if athletes get their degree. But they have long argued that it was hardly enough to compensate them for the millions in revenue they helped produce for the schools, which went to a lot of places, including multimillion-dollar coaches’ salaries.
Q: Haven’t players been getting paid for a while now, though?
A: Yes, since 2021. Facing losses in court and a growing number of state laws targeting its amateurism policies, the NCAA cleared the way for athletes to receive NIL money from third parties, including so-called donor-based collectives that support various schools. Under House, the school can pay that money directly to athletes and the collectives are still in the game.
Q: What about players who played before NIL was allowed?
A: A key component of the settlement is the $2.78 billion in backpay going to athletes who competed between 2016-24 and were either fully or partially shut out from those payments. It will come from the NCAA and conferences (but really from the schools, who will receive lower-than-normal payouts from things like March Madness).
Q: Who will get most of the money?
A: Since football and men’s basketball are the primary revenue drivers at most schools, and that money helps fund all the other sports, it stands to reason that the football and basketball players will get most of the money. But that is one of the most difficult calculations for the schools to make.
Q: Couldn’t unequal divvying of the money open up issues of fairness, equity and Title IX?
A: Yes, there could potentially be Title IX issues if schools deliver more resources to men than women. But the most recent guidance from the Trump administration suggests schools won’t have to consider NIL payments in their Title IX calculations. Attorneys on both sides in the House case have argued that the settlement is not the arena to resolve Title IX issues.
Q: Is this a done deal?
A: That’s an open question. Wilken could do it as soon as Monday or wait to craft a decision after weighing objections. She could scuttle the entire thing, though she granted preliminary approval in October. Currently, the terms of the deal are set to start July 1.
Q: So, once this is finished, all of college sports’ problems are solved, right?
A: Not by a long shot. Some of the more pressing issues include establishing an enforcement entity to make sure schools are staying within the spending guidelines and what to do if they’re not — an area that seems ripe for litigation. There are also the issues of collective bargaining and whether athletes should flat-out be considered employees, a notion the NCAA and schools are not interested in. NCAA President Charlie Baker has been pushing Congress for a limited antitrust exemption that would protect college sports from another series of lawsuits.
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In the end they’ll just raise the tuition for all other students to make up the shortfall, because that’s what schools have always done.
A least Purdue is not raising tuition again.
Without mandatory graduation, and audited grades and hours, what’s the real point of paying any of these kids? College sports have been ruined by the NIL. Just make a junior professional league and the universities can sell their names to the teams.