On June 6, 2025, U.S. Northern District of California Judge Claudia Wilken approved the National Collegiate Athletic Association's (NCAA's) $2.8 billion athlete revenue settlement (Settlement) in the consolidated case, In re College Athlete NIL Litigation.1 The Settlement will reimburse a class of former college athletes for their previously withheld name, image, and likeness (NIL) compensation going back to 2016, with the majority of the Settlement funds going to college football and men's basketball scholarship players, and lesser amounts to women's basketball players and student athletes from other sports. The Settlement also creates a system for the NCAA's Division I (D-I) institutions to share billions of dollars of revenue with their student-athletes over the next ten years, beginning July 1, 2025, through revenue-sharing NIL agreements.
Background
Following the U.S. Supreme Court's 2021 decision in NCAA v. Alston, 594 U.S. 69, student-athletes gained the opportunity to receive compensation from third parties using their NIL. Although hundreds of thousands of student-athletes have since profited, two issues persisted: (1) the rules restricted NCAA member conferences and schools from directly sharing revenue derived from the commercial use of student-athletes' NIL with the student-athletes and (2) studentathletes who finished playing before the Supreme Court's decision lost the opportunity to earn revenue from their college's commercial exploitation of their NIL.
The In re: College Athlete NIL Litigation Settlement
Subjects of the Settlement & Voluntary Opt-In / Opt-Out
The NCAA and the "Power Five" conferences (Conference Defendants)—Atlantic Coast Conference (ACC), the Big Ten Conference, Inc. (Big Ten), the Big 12 Conference, Inc. (Big 12), the Pac-12 Conference (Pac-12), and the Southeastern Conference (SEC) (collectively, the Defendants)—and their "Member Institutions" (meaning, any college, school, or university that is a member in any sport of the North Carolina – that was until a lawsuit was filed against the state's Board of Education compelling them to do otherwise.
That lawsuit, brought by Rolanda Brandon, on behalf of her minor son Faizon Brandon (a highly rated 5-star quarterback), was filed on August 23, 2024, in North Carolina's General Court of Justice, Superior Court Division against the North Carolina State Board of Education and North Carolina Department of Public Instruction. Per the complaint, the Brandons asserted that although the state of North Carolina's legislature did direct the North Carolina State Board of Education to regulate how high school athletes could monetize their NIL, that the Board, in lieu of regulating, prohibited it outright.2 Because the Board of Education exceeded their delegated statutory authority, the Brandons' claimed, its NIL prohibition was arbitrary and capricious and therefore invalid pursuant to N.C. State Stat. Section 1-253 and the North Carolina Rule of Civil Procedure 57. The Brandons' sought a preliminary injunction against the Board's NIL ban due to the fact that Faizon and his family would be irreparably harmed financially because it precluded them from entering into a formal licensing and endorsement agreement with NIL Sponsor 1, while also foreclosing any additional opportunities with other businesses in the future.3
By way of background, in September of 2023, the North Carolina state legislature adopted a bill directing the Board of Education to "adopt rules governing high school interscholastic athletic activities conducted by public school units" including "student amateur status requirements, and rules related to use of a student's name, image, and likeness."4 On July 1, 2024, the North Carolina State Board of Education, in lieu of adopting a set of regulatory rules, instead outright banned every public high school athlete from using his or her name, image or likeness for commercial purposes.5 That outright prohibition, however, apparently was an overreach by the Board of Education because on October 1, 2024, Superior Court Judge Graham Shirley granted the Brandons' motion for preliminary injunction and enjoined the Board from prohibiting any athlete attending a public school in the state of North Carolina from exercising his or her right to monetize their NIL.
Although the state of North Carolina's ruling is not legal precedent for the other remaining states currently foreclosing high school athletes from monetizing their NIL, those states should take notice and understand that their prohibition may be vulnerable to a legal challenge. That being said, with no national standards regarding NIL, most of the forty states that do allow for monetization rest upon their high school athletics governing body to formulate any and all rules and regulations. This leads to a variation of standards between states, but there are a few key restrictions present in most of these rules that high school athletes should be aware of:
- High school athletes typically may not refer to or include their school's uniforms, logos, colors or facilities of the state's high school athletic association in their NIL activities.
- High school athletes are typically prohibited from partnering with gambling, alcohol, tobacco, weapons, firearms, ammunition, and other adult categories brands. In those states where NIL op
portunities are allowed, high school athletes have a chance for a significant financial windfall. However, athletes, their parents and those advising them must ensure that any NIL agreement is in accordance with the applicable rules of their state, since noncompliance could lead to loss of eligibility to participate in athletic competition, which will certainly jeopardize any future athletic and financial opportunities.
NCAA D-I and/or a Conference Defendant)—plus Notre Dame—are automatically bound to the Settlement and must comply with its terms and requirements. Non–Power Five D-I schools are not automatically covered by the revenue-sharing component of the Settlement; however, they did have the opportunity to opt in to the Settlement by June 15, 2025, to share NIL-related revenue with athletes and join the enforcement and reporting framework.
Notably, the Ivy League decided not to opt in. Ivy League schools do not offer athletic scholarships, using need and merit-based financial aid instead. The Ivy League views the Settlement's revenue-sharing model as a departure from its principles of no athletic scholarships and avoidance of pay-for-play. Although Ivy League athletes will not have the opportunity to share revenue derived from their schools' exploitation of their NIL, they can still pursue third-party NIL deals.
Further, athletes who did not want to be part of the class (and therefore want to preserve the right to sue the NCAA and Power Five conferences for antitrust-related claims) had the opportunity to opt out, which would exclude them from all aspects of the Settlement.
Future Institutional RevenueSharing Framework
Beginning July 1, 2025, NCAA D-I and Power Five Member Institutions may enter into exclusive or non-exclusive NIL licenses and/or endorsement agreements with athletes to share revenue for athletes' NIL and institutional brand promotion, excluding broadcast rights for a term not to exceed the student-athlete's eligibility to participate in NCAA sports. Member Institutions may act as the marketing agent for studentathletes with respect to third-party NIL contracts.
Although Ivy League athletes will not have the opportunity to share revenue derived from their schools' exploitation of their NIL, they can still pursue third-party NIL deals.
Further, Member Institutions, and Notre Dame, can provide studentathletes with additional direct payments and/or benefits over and above annual existing scholarships and all other benefits, capped at $20.5 million per school for 2025–2026, increasing ~4% annually for the following ten years; however, the increase will be reevaluated every three years based on increases in certain sports-related revenue among the Conference Defendants and Notre Dame.
Enforcement & Oversight
All D-I student-athletes must report to their school and/or the "Designated Reporting Entity" (managed by Deloitte) any and all third-party NIL contracts or payments with a total value of $600 or more on a schedule to be determined by the Defendants.
The College Sports Commission (CSC), an independent regulatory body established by the Power Five, is the central enforcement authority for the Settlement's new compensation model and will oversee all enforcement of the Settlement terms including "Revenue Sharing," "Name, Image, and Likeness Deals," and "Roster Limits." The CSC states that the NCAA "remains responsible for enforcement of rules not created in connection with the settlement."
Retroactive Benefits Pool
Under the Settlement, a total of approximately $2.8 billion in backdamages will be distributed over ten years (~$280 million per year) to eligible D-I athletes for past NIL restrictions (2016–2024). This consists of a $1.976 billion NIL fund plus $600 million for pay-for-play claims. Approximately 90% of the Settlement will be paid to former football and men's basketball players because the payout formula is based on historical media revenue and licensing data, with the remaining funds reserved for other men's sports and women's sports.
Roster & Scholarship Policies
All NCAA D-I athletic scholarship limits are eliminated; instead, the NCAA may adopt D-I roster limits, capping the total number of athletes who can participate on a team. The new roster caps are largely modeled on existing scholarship limits. This shift gives schools greater flexibility on how they can allocate aid and compensation and not affect athletes who were already enrolled or who had signed letters of intent before April 7, 2024—this ensures no current student-athlete loses a spot due to the new limits during their eligibility. Each school must submit its list of exempt/grandfathered athletes by July 6, 2025.
Still, Member Institutions will have the option of making incremental athletic scholarships available to student-athletes above the number currently permitted by NCAA D-I rules for a particular sport, subject to the roster limits. However, the full cost-of-attendance dollar value of any new or incremental athletic scholarships—that were not previously permitted by NCAA D-I rules—up to $2.5 million (the Athletic Scholarship Cap) will count against the pool of funds each Member Institution may allocate to student-athletes.
Title IX Objections on Appeal to the Ninth Circuit
Before approving the Settlement, Judge Wilken held a hearing on April 7, 2025, where she addressed objections raised by several female student-athletes. The objectors argued that the proposed $2.8 billion in backpay would disproportionately benefit male athletes—particularly those in football and men's basketball—due to historic and systemic disparities in media exposure and revenue generation.
Judge Wilken rejected these Title IX objections, reasoning that the instant antitrust case had nothing to do with Title IX, a federal law that prohibits sex-based discrimination in education programs and activities that receive federal financial assistance. While the court declined to consider Title IX arguments in the context of this Settlement, Judge Wilken did leave the door open for future Title IX lawsuits based on how schools make future payments to athletes.
Almost immediately after Judge Wilken's final judgment, approximately twelve female athletes filed a notice of appeal to the Ninth Circuit, arguing that the $2.8 billion settlement violates Title IX based on inequalities in compensation. While injunctive reform under the Settlement is already in effect, damage payments are stayed pending the outcome of the appeal.
Impacts of the Settlement
Student-Athlete Transfers, Eligibility, and Poaching
On April 22, 2024, the NCAA adopted legislation removing limits on the number of times an academically eligible student-athlete may transfer during their collegiate career. This change allows athletes to transfer multiple times without penalty, provided they are in good academic standing.
This Settlement is expected to significantly increase transfer activity. In particular, student-athletes at Ivy League institutions and non–Power Five or non-NCAA schools may be incentivized to transfer to schools that participate in revenue-sharing, offer larger athletics budgets, and actively support third-party NIL opportunities. With no threat of losing eligibility, transferring becomes an attractive avenue for athletes seeking both competitive and financial advancement.
However, transferring raises concerns about schools poaching studentathletes who have already signed NIL contracts with other programs. This exact issue was raised on June 20, 2025, when the University of Wisconsin (UW) and its NIL collective filed a complaint against the University of Miami (UM) over alleged tortious interference with a two-year binding revenue-sharing contract that was set to begin July 1, 2025. UW claims that UM communicated with a UW defensive back, Xavier Lucas, who had not entered the transfer portal, "knowingly inducing" him to breach his contract with UW. The studentathlete had reportedly requested to enter the portal, but UW refused, based on their agreement.
This case is the first of its kind and may set a critical precedent on whether schools can legally recruit student-athletes already under binding revenue-sharing contracts tied to the Settlement. The Big Ten is supporting UW with the lawsuit against UM.
Questions on Employee Status
While the Settlement allows schools to directly pay their athletes and share revenue, it does not redefine the student-athletes as employees. However, student-athlete compensation creates ambiguity regarding whether they are "employees" under federal or state law, allowing student-athletes to collect benefits and unionize. The question of whether student-athletes are considered employees under the Fair Labor Standards Act is currently being litigated in the Third Circuit in Johnson v. NCAA. If a court eventually does rule that student-athletes are employees, the Settlement has provided that the NCAA or Power Five conferences may modify or terminate their agreements, accordingly.
Potential Federal Legislation
There is currently no NIL federal legislation in place, but prior to the Settlement, many state legislatures were actively enacting NIL laws. Although the Settlement fundamentally reshapes the national college sports landscape, it does not override or preempt existing state laws. Instead, it operates alongside state legislation, creating a layered legal environment where schools must comply with both the Settlement terms and their state's NIL statutes. Where conflicts exist, states are prompted to revise their laws to harmonize with the Settlement and avoid competitive disadvantages in recruiting.
Because the Settlement does not have federal preemption power, there is growing pressure for federal legislation. The NCAA has asked Congress for legislation that would grant it an antitrust exemption, preempt all state laws related to NIL, and restrict student-athletes from being considered employees.
Congress is not alone in examining the impact the Settlement has on college athletics, and the disparity it creates among sports and athletes. President Donald Trump is reportedly considering an executive order to regulate NIL deals in college athletics. He has instructed White House aides to begin studying what an order would look like. Other government officials, such as Rep. Michael Baumgartner (R. WA.), may propose legislation to replace the NCAA with a new body headed by a presidential appointee to ensure that NIL funds and revenues are shared with schools and distributed "equally among all student athletes of such institutions." This Bill, H.R. 2663, the Restore College Sports Act, has been assigned to the House Committee on Education and Workforce.
Conclusion
The Settlement represents a transformative moment in the legal, financial, and regulatory framework of college athletics. It not only compensates thousands of former student-athletes for years of denied NIL revenue but also creates a forward-looking revenue-sharing model that provides substantial compensation to certain student-athletes. While the Settlement brings long-overdue benefits, it also introduces a host of unresolved legal and policy challenges, such as Title IX concerns, transfer/poaching disputes, questions surrounding employment status, and conflicting state legislation. As these issues continue to unfold, it will be interesting to see how schools, athletes, and lawmakers respond to this new era in college sports.
Footnotes
1. This consolidated litigation began as two separate actions: (1) House v. National Collegiate Athletic Association, 4:20-cv-03919 (N.D. Cal) and (2) Oliver v. National Collegiate Athletic Association, 4:20-cv-04527 (N.D. Cal). ). The litigation was further consolidated with two similar actions: (3) Hubbard v. National Collegiate Athletic Association, 4:23-cv-01593 (N.D. Cal) and (4) Carter v. National Collegiate Athletic Association, 23-cv-06325, (N.D. Cal.).
2. Brandon v North Carolina Board of Education, et al, 24CV026975-910
3. 24CV026975-910 Complaint at page 20.
4. 2023 N.C. Sess. L. 133 Section 17. (a) (N.C. Gen Stat. Section 115C-407.55(1)(h))
5. ATHL-008 (NIL Prohibition).
Originally Published by The NIL Institutional Report
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