by CUPA-HR | June 9, 2025
On June 6, a federal judge for the U.S. District Court for the Northern District of California approved a settlement in House v. NCAA, which will allow higher education institutions to share revenue with student-athletes directly.
The settlement creates a 10-year revenue-sharing model that will allow the athletic departments of the higher education institutions in the Power Five conferences (the ACC, Big 12, Big Ten, Pac-12, and SEC) and any other Division I institutions that opt in to distribute approximately $20.5 million in name, image, and likeness (NIL) revenue during the 2025-2026 season. The revenue-sharing cap will increase annually and be calculated as 22.5% of the Power Five schools’ average athletic revenue. The settlement also includes an enforcement arm to penalize institutions that exceed the $20.5 million cap, which will be overseen by a new regulatory body, the College Sports Commission. Institutions can start to share revenue beginning on July 1, 2025.
Additionally, the settlement requires the NCAA and Power Five conferences to pay approximately $2.8 billion in damages to Division I athletes who were barred from signing NIL deals. This covers athletes dating back to 2016. It also replaces scholarship limits with roster limits.
The settlement does not change college athletes’ ability to enter into NIL contracts with third parties, but under the settlement, all outside NIL deals valued at greater than $600 will have to go through a clearinghouse for approval. The clearinghouse will determine if the revenue is for a valid business purpose and if it reflects fair market value.
Prior to this settlement, college athletes could only earn NIL revenue through partnerships with outside parties, such as companies or donor groups. The original case, House v. NCAA, was brought by two former college athletes in June 2020. They challenged the NCAA’s then-policy that prohibited athletes from earning NIL compensation. The case was consolidated with Carter v. NCAA and Hubbard v. NCAA, two similar cases. None of the cases ever made it to trial. Instead, in an effort to avoid higher damages, the NCAA and Power Five conferences agreed to a settlement in May 2024, and the court granted preliminary approval in October 2024.
As NCAA President Charlie Baker explained in a letter, the settlement “opens a pathway to begin stabilizing college sports. This new framework that enables schools to provide direct financial benefits to student-athletes and establishes clear and specific rules to regulate third-party NIL agreements marks a huge step forward for college sports.”
CUPA-HR will keep members apprised of updates related to this settlement and the future of student-athletics.
