Seyfarth Synopsis: The proposed House v. NCAA settlement introduces a first-of-its-kind enforcement regime for college athlete compensation, shifting oversight from the NCAA to the power conferences. It establishes a 12-factor fair market value review—administered by Deloitte—for third-party NIL deals over $600, with binding arbitration available to resolve disputes. While school-funded revenue sharing is subject to separate oversight, the framework reflects a blueprint for how compliance in college sports may evolve.
The proposed settlement in House v. NCAA, currently pending before Judge Claudia Wilken in the U.S. District Court for the Northern District of California, marks a potential sea change in college sports. The plaintiffs challenge the NCAA's and power conferences' historical restrictions on both athlete NIL earnings and athletic revenue sharing, seeking damages and structural reform. The settlement outlines billions in potential backpay for athletes and proposes a new revenue-sharing model that would allow schools to pay up to approximately $20 million annually directly to athletes. Whether the court grants approval or the case proceeds to trial, House is reshaping how schools, conferences, and athletes prepare for the future of college athlete compensation.
The enforcement and oversight structure set forth in the current version of the settlement reveals a radical departure from business as usual in college sports—and a glimpse into what the future may look like.
Power Conferences Take the Helm: A Decentralized Enforcement Model
Unlike traditional NCAA regulations, the House settlement will not be enforced by the NCAA itself. Instead, the task of overseeing compliance will fall to the five power conferences—the Atlantic Coast Conference (ACC), the Big Ten Conference, the Big 12 Conference, the Pac-12 Conference, and the Southeastern Conference (SEC)—through a newly created Settlement Enforcement Committee. This committee will be responsible for implementing the agreement's prospective terms, including:
- A cap of approximately $20 million per year, per school, on direct, school-funded athlete compensation under the settlement's revenue-sharing model;
- A regulatory structure for third-party NIL agreements;
- Periodic reporting and compliance certifications.
This marks a significant shift from centralized rulemaking to a decentralized, conference-driven enforcement model. It reflects growing skepticism of the NCAA's role and recognition that member institutions may be better equipped—or at least more politically willing—to oversee this new compensation regime.
Deloitte's NIL Clearinghouse: The 12-Factor FMV Review
To ensure that NIL payments made by third parties (e.g., collectives, brands, or boosters) are not used to circumvent the cap or mask pay-for-play schemes, the settlement introduces a detailed fair market value (FMV) review process for all third-party NIL deals valued over $600 (note, institutionally-provided revenue sharing through the House settlement will be reported by the institution through a different process.) This FMV review process of third-party NIL deals valued over $600 will be administered by Deloitte, serving as the independent NIL Clearinghouse.
Deloitte will evaluate third-party NIL deals using a 12-factor analysis, including:
- Athlete's individual marketability and social media reach
- Athletic performance and public profile
- Type and scope of deliverables (appearances, content, etc.)
- Geographic market size and demand
- Deal duration
- Exclusivity clauses
- Renewability or extension terms
- Comparable market benchmarks
- Involvement of donors or booster entities
- Timing of the deal (relative to recruiting, transfers, etc.)
- Quality and completeness of documentation
- Red flags suggesting illegitimacy or inducement
Each deal will be reviewed to assess whether the compensation reasonably aligns with what the athlete could command in an open and competitive market.
When There's a Dispute: Arbitration as the Final Word
If Deloitte determines that a third-party NIL deal does not reflect FMV under the settlement's 12-factor analysis, the athlete, the payor (e.g., collective or brand), or the institution may dispute that finding through independent arbitration. This arbitration process is designed to resolve FMV disputes efficiently and confidentially, outside the NCAA's traditional penalty structure or formal litigation.
The arbitrator's role will not be to renegotiate deals, but rather to decide whether the rejected NIL agreement in fact complies with the FMV standards established by the House settlement. The arbitrator's decision will be final and binding.
While this provides a path for challenging Deloitte's determinations, it also introduces potential friction: athletes and payors must weigh the time and cost of contesting a valuation, particularly during sensitive periods such as recruiting, eligibility certification, or transfer windows.
Why This Matters: Compliance Risk, Athlete Autonomy, and Market Friction
The implications are sweeping. For schools, the new framework demands robust internal NIL compliance systems that can communicate with Deloitte, assist athletes with documentation, and remain in compliance with the remaining terms of the House settlement (assuming it is approved), including the institution's own reporting requirements.
For athletes, the marketplace becomes more formalized—and more scrutinized. Deals that might have quietly proceeded under the old system will now be subject to documentation requirements and FMV reviews.
For third-party payors, including donor-funded collectives, this will be the first time that NIL transactions have faced compliance pressures. The combination of FMV scrutiny and the possibility of binding arbitration may deter high-dollar or loosely structured deals—especially those with timing or terms that raise red flags related to recruitment or inducement.
Finally, the Settlement Enforcement Committee, composed of representatives from the five power conferences, replaces the NCAA as the primary compliance body. How consistently and aggressively this committee enforces the rules remains to be seen—and will likely vary across conferences with different institutional priorities, resources, and cultures.
Looking Ahead: Contingent Compliance Amid Judicial Review
The entire system hinges on final court approval, which is not yet assured. Still, institutions are moving forward as if the framework will be approved—drafting policies, establishing compliance infrastructure, and preparing for a post-House landscape. For now, the best approach is proactive: prepare as if implementation is coming, while keeping a close eye on the court's ruling.
Why This Matters: Compliance Obligations and Strategic Decisions for Schools
If approved, the member institutions in the Power 5 conferences—the ACC, Big Ten Conference, Big 12 Conference, Pac-12 Conference, and SEC—will be automatically bound by the House settlement terms and must prepare now for the rollout of capped revenue-sharing, Deloitte's FMV reviews, and the associated arbitration framework.
For other Division I institutions, the decision is more complex: they have until June 15, 2025 to choose whether to opt into the settlement to access its liability shield and participate in the revenue-sharing structure. But opting in also brings the same compliance responsibilities—and potential costs. Schools weighing that choice must evaluate whether the long-term exposure of continued litigation outweighs the administrative and financial demands of settlement participation.
In either case, schools should begin building internal NIL review infrastructure, aligning legal and compliance teams, and preparing for a more formalized athlete compensation environment. Even before final approval, the settlement is setting new expectations—and competitive standards—for how institutions engage with NIL and revenue sharing.
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