By Alexa Linchuck | August 13, 2024
The recent House v. NCAA settlement marks a pivotal moment in college sports, fundamentally altering how athletes are compensated for their name, image, and likeness (NIL) rights. This $2.8 billion agreement, spread over the next decade, represents a significant victory for college athletes and transformative shift in the NCAA’s approach to athlete compensation.
The settlement addresses long-standing grievances from athletes who claimed that NCAA rules unjustly marked them from earning money through endorsements and sponsorships dating back to 2016. As part of the settlement, more than 14,000 former and current college athletes will receive compensation. “Even though it was only because of the overwhelming legal pressure, the NCAA, conferences, and schools are agreeing that college athletes should be paid,” said Ramogi Huma, a former UCLA football player and longtime advocate for college athletes.
Under the terms of the settlement, schools will now be able to allocate up to 22% of their annual revenue to athlete compensation. According to Front Office Sports, this corresponds to about $22 million annually starting in 2025-2026, with potential growth to $32.9 million by the end of the agreement period. This revenue sharing marks a significant departure from the NCAA’s traditional amateurism model, allowing athletes to benefit directly from the financial success of college sports programs.
One of the most complex aspects of the settlement is its interactions with Title IX, the federal law governing gender equity in education. The settlement does not specify how the revenue should be divided among different sports, leaving it up to individual schools to ensure compliance with Title IX. Moreover, the settlement eliminates scholarship limits, replacing them with roster limits. This will change the school’s flexibility in how they financially support athletes across various sports programs.
The House v. NCAA settlement represents a landmark shift in college athletics, acknowledging the rights of athletes to be compensated for their contributions. As the NCAA navigates this new landscape, the ongoing dialogue with Congress and the implementation of fair and transparent regulations will be crucial in shaping the future of college sports.
