In a landmark decision that fundamentally reshapes the future of college athletics, a federal judge on Friday approved a $2.8 billion settlement that will allow colleges across the country to begin directly compensating student-athletes. The settlement brings an official end to long-standing legal battles over the NCAA’s amateurism model and marks one of the most significant shifts in the history of college sports.
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The decision, handed down by U.S. District Judge Claudia Wilken, comes nearly five years after Arizona State swimmer Grant House filed suit against the NCAA and its five largest athletic conferences, seeking to lift the restrictions on revenue sharing with athletes. The ruling now paves the way for colleges to start paying athletes millions of dollars as early as next month, as the multi-billion dollar college sports industry moves further away from its century-old amateur structure.
The New Revenue-Sharing Model
Under the terms of the settlement — often referred to as the House settlement — each NCAA school can share up to $20.5 million annually with its athletes, totaling $2.7 billion in payments over the next decade. Additionally, thousands of former athletes who were previously barred from receiving this revenue will receive compensation.
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The agreement will have sweeping implications for nearly all of the NCAA’s 1,100 member schools, which together represent close to 500,000 student-athletes. The biggest changes will be felt in high-profile programs like football and basketball, where billions of dollars are generated annually through television deals, sponsorships, and merchandise.
Michigan quarterback Bryce Underwood, for example, has already reportedly secured an NIL (name, image, and likeness) deal valued between $10.5 million and $12 million — a sign of just how lucrative college athletics have become for top-tier athletes.
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Winners, Losers, and What Comes Next
While many see the move as long overdue, the settlement does not come without consequences. Walk-on players and athletes on partial scholarships may find their roster spots eliminated as schools look to balance rosters and budgets to accommodate the new financial obligations. Olympic sports, often subsidized by the revenue generated from football and basketball, may also be at risk as schools divert more resources toward revenue-generating programs.
However, attorneys involved in negotiating the deal argue that the settlement delivers exactly what was sought: a system that finally rewards the athletes whose hard work fuels the billion-dollar industry, from the fall football season through March Madness and the College World Series.
“This was about putting more money directly into the pockets of the athletes who have earned it,” they stated.
A Decade in the Making
The groundwork for this moment was laid more than a decade ago, when Judge Wilken previously ruled in favor of former UCLA basketball star Ed O’Bannon, who challenged the NCAA’s use of athletes’ names, images, and likenesses without compensation. That case ultimately opened the door for today’s NIL deals and further exposed the cracks in the NCAA’s amateurism model.
In October of last year, Wilken granted preliminary approval for the settlement, prompting colleges to scramble to figure out how to afford the payments while developing regulatory frameworks to monitor NIL deals with third-party sponsors. A new enforcement group, operated by Deloitte auditors, will oversee compliance.
The agreement also significantly reduces the NCAA’s control over college sports, shifting much of the power and decision-making authority to the four major conferences: the ACC, Big Ten, Big 12, and SEC. This is particularly significant for the College Football Playoff, which operates outside of the NCAA’s jurisdiction and remains the single largest financial driver in college athletics.
Litigation Threat Still Looms
Despite the settlement bringing a measure of uniformity to college sports, legal experts warn that this may not be the end of courtroom battles. While this deal covers much of the revenue-sharing debate, states still maintain differing laws governing NIL practices, creating the possibility for future legal challenges.
NCAA President Charlie Baker has been pushing for federal legislation that would create a single national rulebook to govern NIL and college athlete compensation while providing antitrust protections to prevent future disruptions to the model.
For now, the settlement marks a major victory for athletes who have long fought for a share of the massive profits generated off their performances — and signals the beginning of a new era where college athletes are finally paid like the professionals many of them are becoming.
