A California judge granted final approval of the landmark House v. NCAA settlement, permitting colleges and universities to share revenue with student athletes.
The settlement resolves a series of federal antitrust class-action lawsuits filed by Division I athletes against the NCAA and the Power Five conferences, ESPN reports. The suits challenged the NCAA’s rules regarding athlete compensation and claimed the association illegally limited the earning power of college athletes.
The House v. NCAA lawsuit was first filed in 2020 by Arizona State swimmer Grant House and women’s college basketball player Sedona Prince. The NCAA and power conferences initially voted to settle the suit in 2024, resulting in nearly one year of discussions and changes.
Starting July 1, each school will be allowed to spend about $20.5 million in new payments to their athletes. The majority is expected to be spent on high-revenue generating sports, with most projections estimating 75% of funds will go toward football.
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As part of the settlement, another $2.7 billion will be distributed to current and former athletes who were denied the opportunity to earn revenue from name, image, and likeness (NIL) rights from 2016 to 2024. The settlement also includes new rules governing third-party NIL agreements, which the NCAA approved for athletes back in 2021. New contracts struck between an athlete and a third-party entity is now subject to the new NIL clearinghouse, dubbed “NIL Go,” which is charged with evaluating the deals to determine their legitimacy.
Shortly following the judge’s ruling, the Power 5 conferences announced the establishment of the College Sports Commission which will be responsible for implementing, overseeing, and enforcing schools’ compliance with the settlement.
“The Commission will investigate any potential violations of these rules, make determinations regarding potential rules violations and penalties, provide notice and opportunity to be heard, participate in the arbitration process and ultimately administer penalties for violations of these rules,” the conferences wrote.
House v. NCAA Settlement’s Impact on Title IX
Opponents have long voiced concerns regarding the settlement’s potential impact on college sports, including its impact on gender equity and Title IX, a federal law that prohibits sex discrimination in any school or education program that receives federal funds. Since football and men’s basketball are the primary revenue drives at most schools, women’s sports could face cuts or receive a smaller share of benefits, raising Title IX compliance issues.
Defense attorneys say colleges have been preparing for a potential increase in gender equity lawsuits, especially challenges over how the revenue is distributed, Sportico reports. Preparations include budgeting for costly litigation, potential settlements, and commissioning audits to identify other areas of Title IX vulnerability.
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Todd Schumaker, a sports law and higher education partner at Church Church Hittle and Antrim, told Sportico that some of the schools he advises are allocating anywhere between a few million dollars to $20 million in anticipation.
“They are trying to balance antitrust concerns with Title IX concerns, knowing that even if they are working toward equity, that it is not going to get there right away,” said Shumaker, who previously served on the NCAA’s enforcement staff. “Like a lot of stuff in college sports, it is not if you are going to get sued but when you are going to get sued.”
Iliana Konidaris, a New York civil rights attorney, told AP News last year that it will be crucial for the U.S. Department of Education’s Office for Civil Rights to provide guidance on how revenue sharing and NIL compensation should be paid to ensure schools are Title IX compliant.
