The college sports economic revolution, which began more than a decade ago with Ed O’Bannon’s lawsuit over what became known as name, image and likeness (NIL), reaches its guillotine moment Monday in an Oakland courtroom.
Judge Claudia Wilken of the Northern District of California, who ruled on the O’Bannon case, will oversee the settlement terms of a class action, antitrust lawsuit that has been winding through the courts for five years.
If approved, the House vs. NCAA settlement will effectively dismantle the longstanding policy of amateurism and transfer billions of dollars from the schools to the athletes.
The settlement will provide back pay for former athletes who did not receive NIL compensation and create a revenue-sharing arrangement for current and future athletes.
It will expand scholarship opportunities, create an enforcement mechanism for third-party NIL payments and, above all, provide clarity for a broken industry.
Here’s what you need to know.
Who is House?
The named plaintiff in the case is Grant House, a former Arizona State swimmer who took the NCAA to court in 2020. But his lawsuit is actually the combination of three cases against the NCAA consolidated into one with the goal of securing financial compensation for past, present and future athletes based on their NIL.
Unlike the NIL system that took effect in the summer of 2021 and allows athletes to receive third-party compensation for endorsement and promotional endeavors, House creates a direct revenue-sharing relationship between the athletes and their schools.
Who are the defendants?
The NCAA and the power conference — the ACC, Big Ten, Big 12, SEC and Pac-12 — are the named defendants. The case was filed before the Pac-12 lost 10 schools in the summer of 2023, but it remains a legal entity and very much involved in the case.
How does the settlement work?
Fearing a loss in court that would have been catastrophic financially, the NCAA and the Power Five conference agreed to a deal last spring.
The damages portion allocates billions in NIL payments to athletes who are no longer eligible, while the injunctive portion creates a revenue-sharing model expected to be implemented this summer.
The settlement also creates more scholarships across dozens of NCAA sports and allows the major conferences to create an enforcement arm for third-party NIL payments.
How will the damages portion be paid?
The NCAA plans to pay approximately $2.7 billion to athletes who competed between 2016-24 but were barred from receiving compensation for the use of their NIL.
The amount will be paid over 10 years, with the NCAA withholding portions of the annual distributions it makes to the schools and instead sending that cash to the plaintiffs.
How will the injunctive portion work?
Approximately 22 percent of each school’s annual revenue from ticket sales, media rights deals and sponsorships will be set aside for the athletes. In 2025-26, that equates to a salary cap of roughly $20.5 million.
Members of the ACC, Big 12, Big Ten and SEC are expected to max out. (If they don’t, recruiting could suffer.) Schools in the Group of Five — and those that do not play major college football — will come in well under the cap.
In the Power Four, approximately 75 percent of the total (or $15 million) will be pegged for football; men’s basketball rosters will receive roughly 20 percent; the rest will go to athletes in the Olympic sports.
Does House impact roster sizes?
Perhaps the most overlooked aspect of the settlement is the expansion of scholarships and reduction in walk-on opportunities.
Let’s explain using football.
In the past, teams were allowed 85 scholarships but could have another 20 or 30 players on the roster as walk-ons. Under the House settlement, rosters are capped at 105, but every player could be placed on scholarship if the school chooses. Some sports will experience a drastic reduction in the number of roster spots.
What does this mean for NIL?
The settlement is designed to eliminate the so-called fake NIL currently used by collectives to lure transfers and high school recruits (i.e., pay-for-play). In theory, it will be replaced by the pure form of NIL, in which athletes are compensated for endorsement and promotional opportunities.
The NCAA has been unable to enforce pure NIL. But the House settlement allows the power conferences to construct an oversight body that’s independent of the NCAA. The CEO is expected to have an investigatory background.
Deloitte, the global auditing and consulting giant, will review NIL deals to determine their legitimacy.
Will the settlement be approved Monday?
In past cases, Wilken has refrained from ruling from the bench. However, she could signal an intent to approve, then render a final decision in a few weeks.
Outright rejection of the settlement would surprise many in college sports. A slew of objectors have expressed concerns, but none of the issues raised are considered substantive to the case itself.
The hearing could last most of the day and will unfold in a packed courtroom.
What’s next?
If Wilken approves the settlement, the revenue sharing era likely will begin on July 1. That won’t end the chaos — this is college sports, after all.
It remains unclear whether the settlement will stand up in court to a Title IX challenge, because football and men’s basketball players will receive the vast majority of revenue.
It does not account for the various state laws that govern NIL.
Also, college athletes aren’t unionized, which means the House settlement was not collectively bargained and, ultimately, might not be enforceable.
This isn’t the end for the college sports revolution, by any means. But it’s a step toward ending the chaos.
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