What The Hell America!

One final court hearing is all that stands between big-time college sports and a major legal settlement that is poised to open the door to a new era.

The case, known as House vs. NCAA, or simply the House settlement, offers a sweeping reimagination of how high-level college athletics should work: Schools sharing revenue with student-athletes. Team sizes governed by roster limits, rather than scholarships. A third-party clearinghouse for marketing deals.

“This is a landmark case that’s probably going to be the single biggest structural change in the entire history of collegiate sport,” said Noah Henderson, a one-time Division I golfer at St. Joseph’s University who now directs the sports management program at Loyola University Chicago.

The multibillion-dollar settlement has been in the works for more than a year. On Monday, a federal judge will hold a final approval hearing, during which supporters and objectors to the proposed settlement will speak one last time.

If the settlement is approved, as expected, it will pave the way for schools to pay athletes directly — a game-changing reversal of what was once a tradition of amateurism that for a century defined college sports.

In recent decades, though, increasingly lucrative broadcast deals and the commercialization of college sports had led to athletic departments awash with cash. Now, schools in big-time conferences annually earn tens of millions of dollars, if not hundreds of millions, from broadcast deals, ticket sales, merchandise and donations.

And as the revenues grew, so too did the pressure to pay players — especially in the income-generating sports of football and basketball. “The money became too big to not allow athletes to get a cut,” Henderson said.

The hearing is scheduled for 10 a.m. Pacific time on Monday in federal court in Oakland, Calif. Judge Claudia Wilken could issue the final approval at any time afterward.

What does the House settlement do? 

The settlement has two major parts, one backward-looking and one forward-looking.

First, it offers a remedy for college athletes who played before 2021, the year the NCAA began to allow players to earn money from their name, image and likeness rights, commonly known as NIL. About $2.75 billion is set to be distributed to those players, and the amounts they earn are based on the sport they played and whether they played for a school in a major conference. Football and men’s basketball players from power conferences could earn six figures, while a swimmer or soccer player might earn a few hundred dollars.

The future changes are where the big transformation lies.

Schools in the power conferences (ACC, Big Ten, Big 12, SEC and PAC-12, all of which were named as defendants in the lawsuit), along with any other schools that choose to opt in to the settlement, will be able to share revenue with their student-athletes.

If the legal settlement is approved, as expected, it would pave the way for schools to pay athletes directly — a game-changing reversal of what was once a tradition of amateurism that for a century defined college sports.

Michael Conroy/AP

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Michael Conroy/AP

In other words, schools will be able to distribute tens of millions of dollars in direct payments to players. The settlement includes a salary cap that will start around $20.5 million, and eventually rise over the years to around $30 million.

The settlement would also impose roster limits, a new concept in college athletics. Traditionally, schools have managed team sizes via scholarship limits — such as 85 for football, 13 for men’s basketball, 14 for women’s swimming and 11.7 for baseball — and those scholarships could be doled out in part or in whole.

And finally, the settlement creates a third-party clearinghouse for NIL deals worth $600 or more.

How will paying players work?

That’s up to the schools. Programs will have up to the $20.5 million salary cap to work with, but schools may choose not to spend the full amount. It’s likely that most of the money will go to athletes on football or basketball teams, the sports that typically bring in the most revenue.

For most universities, it’s an entirely new way of running an athletics program — a way that looks a lot more like professional sports franchises. Many universities have started to hire general managers who can manage the money side of building a roster: evaluating how much a player is worth in salary, negotiating deals, and so on.

Schools in the five conferences named in the lawsuit — the four “power” conferences, plus the Pac-12 — are automatically part of the settlement. Other schools can choose to opt in.

There’s a risk of a growing financial divide between bigger schools and the smaller programs that decide not to opt in. Eventually, some programs may decide that trying to compete isn’t worth the expense, said Sam Ehrlich, a professor at Boise State University who tracks college sports litigation.

“Even more so than opting in versus opting out, for a lot of those schools, it’s going to be a conversation about is it worth it to be in Division I anymore?” Ehrlich said.

The Tennessee Volunteers celebrate after defeating the Texas A&M Aggies to win the National Championship at the NCAA Division I Baseball Championship on June 24, 2024. One final court hearing is all that stands between big-time college sports and a major legal settlement that is poised to open the door to a new era. On Monday, a federal judge will hold a final approval hearing, during which supporters and objectors to the proposed settlement will speak one last time.

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Peter Aiken/Getty Images

At least one school has already decided to reclassify: Saint Francis, a university in Pittsburgh, announced last month it plans to drop from Division I to Division III in 2026.

“This was not an easy nor a quick decision,” said Joseph Lehman, the chair of the school’s board of regents. Recent changes to college sports, including pay-for-play, he said, had “[moved] athletics away from love of the game.”

What will happen to NIL deals? 

Name, image and likeness deals were originally conceived to compensate players for traditional marketing and licensing purposes — like sponsoring by a local car dealership, or earning money from an appearance in a video game.

But over the four years since they were first introduced, many NIL deals had come to essentially operate as compensation for playing for a certain school. Schools would affiliate with an NIL “collectives” and work together to recruit players and offer NIL deals, some of them reaching seven figures.

The settlement aims to give the NCAA and power conferences greater oversight over those deals. Every NIL deal worth $600 or more will have to go through a clearinghouse operated by the consulting firm Deloitte to ensure it’s of fair market value — or, in other words, to make sure an NIL deal isn’t being used to circumvent the school’s $20.5 million salary cap.

This is one of the most contentious parts of the settlement, and it’s almost certain to be challenged in court if the settlement is approved, Ehrlich said.

“There’s going to be significant questions moving forward as to what kind of powers that clearinghouse has and whether the clearinghouse is even legal,” he said.

Who objects to this? 

There are a lot of objectors to the settlement. A major portion of Monday’s hearing will be devoted to hearing their complaints.

Perhaps the most compelling objectors are current students who’ve been informed that they will no longer have a roster spot after the settlement is approved, due to roster limits shrinking the size of their team. That’s left athletes to face the prospect of paying for tuition that they had expected to receive a scholarship for — or scramble to find a new school for next season. The total number of eliminated roster spots could be in the thousands.

Henderson, the collegiate golfer-turned-Loyola Chicago professor, wrote his own objection letter to the court about the roster limits, urging the settlement to adopt a “practice squad” concept or other solution to allow current players to remain with their teams.

“There’s a large human cost with transferring. Your friends don’t transfer. Your significant other might not want to transfer. Your credits academically might not transfer,” he said. “So these athletes who have spent their entire life working to get to the level of Division I athletics, all of a sudden their opportunities are stripped from them.”

Other objections include former female athletes or football and basketball walk-ons who believe the settlement doesn’t fairly compensate them for their NIL rights. Some are parents of elite high school athletes who say the roster limits could uniquely affect the recruiting class of 2025, as transfers could take up many available roster slots. And some objections are legal in nature, arguing that the settlement violates antitrust laws.

What happens next if the settlement is approved?

The simple answer is: even more lawsuits. There are already more than a dozen lawsuits about various questions that remain open despite this settlement, such as whether the NCAA’s player eligibility rules are legal and whether players should be classified as employees under federal labor law.

And athletic directors from dozens of universities will be on Capitol Hill this week to lobby Congress for legislation codifying the terms of the settlement that could help shield the NCAA and schools from future legal challenges.