On June 6, Judge Claudia Wilken approved the House settlement in their three antitrust lawsuits against the NCAA. The ruling is groundbreaking for college football and its athletes. After all, since the founding of the NCAA in 1906, universities have never directly paid athletes. However, skirting that grey line will no longer be an issue, as the settlement completely changes the revenue-sharing in college athletics.
Fallout of the House v. NCAA settlement
Of course, the biggest news for college athletics is that now their athletes will be able to paid directly by the school. However, there’s other important fallout from the decision.
Current athletes get paid
The settlement between the House and NCAA means that college athletes are getting paid. That much everyone knows. However, we now know which sports are being prioritized, and how much power conference teams will be able to spend.
Starting July 1, colleges will be able to share $20.5 million with their athletes. Football is expected to receive a lion’s share of the load, at 75 percent. Following football, men’s basketball is projected to receive 15 percent, women’s basketball to receive five percent, with the remainder distributed to the other sports. This means that power football conference teams will be able to spend $13-16 million on their rosters in 2025.
On top of their revenue from the schools, players will also still receive money through the NIL. Unlike the NCAA, most schools and NIL collectives have saw this coming and have begun adapting.
“Garnet Trust has been preparing to adapt with purpose in this new chapter of NIL,” South Carolina’s NIL collective stated. “Our role has never been solely about financial support. We are here to help student-athletes build their personal brands, make informed financial decisions, and develop the tools they need for long-term success. We remain committed to empowering them to fully capitalize on their name, image, and likeness, especially in ways permitted beyond the new cap on direct school payments.”
Part of that adaptation is that an NIL clearinghouse (an entity that ensures transactions between two parties are completed efficiently), which will be responsible for approving any third-party NIL deals of $600 or more. If the deals aren’t approved, athletes can be deemed ineligible or schools may be fined. Interestingly, officials reported 70 percent of past NIL collective deals would not be approved, while 90 percent of public companies’ deals would be approved.
Former athletes get paid
The second-biggest news of the decision is that former athletes will also be receiving a large sum for their college football careers. The settlement against the NCAA forces them to shell out $2.7 billion over the next 10 years. This payout will be given to athletes who played from 2016 to 2024. However, how that distribution is determined remains to be seen.
60 percent of the money used in this payout will come from a reduction in distribution to the universities, which averages to around $160 million per year. That means schools in power conferences are expecting to lose about $1-2 million annually.
The other 40 percent set to be paid by the NCAA will likely come through a reduction in operating expenses. How this changes things going forward, however, will remain to be seen.
This could mean that the NCAA may file for bankruptcy. It could also lead to another prolonged legal situation. Regardless, it’s worth noting in case it becomes a reality.
Roster restrictions and the death of the college walk-on
Seeing college athletes get paid is a decision most can root for. However, I believe roster restrictions may have the biggest consequences of the House v. NCAA settlement.
Judge Wilken was originally against the implementation of restrictions. However, it was mutually agreed upon by the two parties as a result of the court settlement. This will have severe consequences for all of college athletics.
Compared recent NCAA Participation Rates with proposed roster limits.
Avg. roster sizes exceed roster limits in many sports.
Statistically, a typical DI school will have 8 different teams cutting 40+ roster spots – about 7% of their student-athlete body.
More details in the 🧵 https://t.co/U9xKwu49I6 pic.twitter.com/0ZDE2cKJRc
— Braly Keller (@BralyKeller) October 25, 2024
Most schools have roster sizes that would exceed the current limits that are set to take place. And in some sports (like football and basketball), programs were able to backload the end of the roster with non-scholarship walk-on players.
Previously, only scholarships were limited. Yet with roster limits set to take place without scholarship limits, teams will no longer be looking to develop walk-on talent. That’s not because they won’t want to, but because it would no longer make sense from a team-building perspective given the limits on the team size.
Now, there is a chance that big programs would be willing to fully fund a non-revenue athlete’s scholarship. However, small schools don’t share that same luxury. And, there’s no guarantee that all Power Four programs are able to do it throughout their athletic department.
That means the likelihood of seeing a Scottie Pippen, J.J. Watt, or Baker Mayfield success story will become slim-to-none under the new rules. In essence, this decision will signal the end of walk-on athletes in college sports going forward.
Lingering questions from the House and NCAA settlement
Despite the court decision, there’s still plenty of uncertainty about what may happen going forward. One aspect is that the new contract being drafted for power conference members prohibits them from being able to sue the College Sports Commission, the new enforcement entity for college sports.
Not signing that agreement could result in schools getting kicked out of their respective conferences. Or, they could be blackballed by the rest of the Power Four.
The problem with this is that Tennessee has a state law that allows schools and NIL collectives to pay above the cap and create a competitive advantage. So does that mean that the Volunteers and Vanderbilt will be booted from the SEC for following their state’s own law? At the moment, that remains to be seen.
Is Bryan Seeley the right commissioner?
The other question from the fallout of the House and NCAA settlement is whether or not MLB executive Bryan Seeley prepared for this type of job.
Currently, Seeley is the VP of investigations for the MLB. He is also a former attorney, responsible for overseeing investigations into international compensation cap issues. He also took a key role in legalized sports betting policy.
Seeley will lead the commission in enforcing the terms in the House v. NCAA settlement. They will also be working closely with the aforementioned NIL clearinghouse, too.
While Seeley is more than qualified for the position, transparency will be key going forward. Far too often have we seen a blurred line crossed by members of the NCAA. Hopefully with the ushering in of these news rules and changes, all of that changes going forward.
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