On June 6, 2025, U.S. District Judge Claudia Wilken approved a groundbreaking settlement in three federal antitrust lawsuits that accused the NCAA of unlawfully limiting college athletes' earning power – ushering in a new era of direct pay and multi-billion-dollar compensation.
Under the ruling, the NCAA must pay nearly US$2.8 billion in back damages over the next 10 years to athletes who competed in college from 2016 to the present. This decision also allows, though does not require, schools to directly pay their athletes. The annual cap for these payments is expected to start at US$20.5 million per school in the 2025-2026 academic year, with incremental increases throughout the next decade. Previously, student-athletes could only receive name, image and likeness (NIL) compensation from third parties, but this ruling enables them to receive payments directly from their schools.
In response to this news, the NCAA's four power conferences – Big Ten, SEC, Big 12 and ACC – are launching a new enforcement body, the College Sports Commission, which will oversee all NIL deals to ensure compliance with NCAA regulations. The commission will collaborate with NIL Go, an independent clearinghouse developed by Deloitte, to evaluate NIL agreements worth US$600 or more. The goal is to verify that these deals serve a valid business purpose and fall within a reasonable compensation range.
While this ruling marks a historic victory for some college athletes, it also raises concerns about funding disparities. The majority of payouts will likely flow to high-revenue sports, such as football and men's basketball, with an estimated 90% of payouts from colleges going to athletes in these programs. For reference, top college quarterbacks are expected to secure US$2 million per year, accounting for 10% of a school's NIL budget. This raises pressing questions about how athletes in non-revenue sports will be affected, with concerns that schools will cut funding for lower-profile programs to remain competitive in recruiting elite football and men's basketball talent.
This ruling also sparks Title IX concerns, as the law states that "no person in the United States shall, on the basis of sex, be excluded from participating in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance." Given that NIL money and settlement funds are disproportionately benefiting male athletes, this system potentially denies female athletes equal opportunities. Some contend that football and men's basketball players have greater market value, justifying the disparity. However, others point out, and justifiably so, that the NCAA's historical lack of investment in women's sports has artificially suppressed their market potential.
Another major issue arising from this ruling is whether college athletes should be classified as employees. College sports leaders are lobbying U.S. Congress to block athlete employee status while granting the NCAA an antitrust exemption to impose limits on player pay and transfers. Unlike professional sports leagues, where salary caps and free agency are negotiated through collective bargaining agreements, college athletics lack a formal system for regulating compensation. University administrators caution that granting student-athletes employee status and allowing unionization could place significant financial strain on schools, potentially forcing budget cuts and reshaping athletic programs.
With this new athlete compensation structure, U.S. colleges are scrambling to find ways to cover costs. Strategies range from raising ticket prices to layoffs. Virginia Tech plans to increase student athletic fees by nearly $300 next year. The University of Minnesota is exploring naming rights deals for its basketball arena. The University of Oklahoma plans on cutting 5% of its athletic department staff. The University of Florida has asked coaches to reduce their budgets by 5%. Additionally, non-revenue sports may face funding cuts, potentially diminishing the overall experience for many college athletes.
House v. NCAA is a landmark ruling that will reshape college sports: it provides a massive payday for some athletes but also leaves many critical questions unanswered. Will direct payments to student-athletes worsen gender inequality? Will schools struggle financially under these new obligations? And will Congress intervene to prevent athlete unionization? As college sports enter this era of commercialization, the answers to these questions will be pivotal.
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