College sports fans, the future is now.
A federal judge has approved the House v. NCAA settlement on revenue sharing, clearing the way for it to take effect on July 1.
From that day on, colleges will be allowed to directly pay their student-athletes, so long as they stay under a predetermined annual cap.
NIL, or name, image and likeness, deals, including from booster-funded collectives, will remain available to college athletes, but most deals will now be reviewed by a clearinghouse aimed at making the NIL market more organized and fair.
The now-approved settlement will also bring with it new scholarship rules and roster limits, and it will resolve multiple antitrust lawsuits with a $2.8 billion payout to athletes who couldn’t access NIL funds in the past due to the timing of their college careers.
Lingering legal issues
Although the ruling will change college sports as you know it, it actually won’t create much work for school leaders in the short term.
Most programs are already prepared for a post-settlement world since Judge Claudia Wilken granted preliminary approval of the plan in October.
Over the past few months, coaches have been meeting with athletes about the changes and school administrators have prepared for revenue sharing, such as by hiking the price of concessions, as the Deseret News previously reported.
Final approval of the settlement does open the door to new types of lawsuits, including legal battles over the clearinghouse’s assessments of NIL deals.
College sports experts, including Stewart Mandel at The Athletic, anticipate battles over athletes’ “fair market value” and athlete employment rights.
“I remain skeptical that (the settlement) will solve much of anything,” Mandel wrote in early April.
The House v. NCAA settlement is expected to supercharge debates over related antitrust issues, including whether student-athletes are employees.
“Industry leaders have asked Congress to write a new law that would prevent athletes from becoming employees and provide the NCAA with an antitrust exemption to create some caps on player pay and transfers,” per ESPN.
Background of the House settlement
Although many legal battles are yet to be fought, most college sports leaders see the House v. NCAA settlement as an important step forward.
Supporters believe it will help tame the chaos of the current NIL era, which began in 2021, when the Supreme Court ruled that individual athletes, not their schools, should control — and be able to profit off of — athletes’ name, image and likeness rights.
That ruling ultimately made it harder for many programs to hold on to their star players, since it made it possible for booster collectives at other schools to tempt them away with major NIL deals, as the Deseret News previously reported.
While top athletes will still be able to snag huge deals moving forward, the settlement returns some power to schools — and should reduce the influence of collectives.
“NCAA president Charlie Baker and others believe the deal will help schools regain control and tamp down the sky-rocketing, largely unregulated market for paying college players through third parties,” ESPN reported.
In a letter released Friday after the House settlement was approved, Baker wrote that he believes stabilization is on the way for college sports, but knows challenges remain. He called on Congress to take action to ensure that schools can enter the new era on solid ground.
“Opportunities to drive transformative change don’t come often to organizations like ours. It’s important we make the most of this one,” Baker wrote.
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