On June 6th, 2025, the NCAA’s landmark House v. NCAA settlement was officially approved, transforming the way student-athletes can earn money through their Name, Image, and Likeness (NIL) rights in college sports.
This significant development marks a shift in collegiate athletics as a federal judge granted final approval of the settlement, introducing a new compensation framework. The decision has been closely followed by universities, athletes, and sports fans alike.
With this approval, universities can now directly pay student athletes for playing college sports. These changes are set to take effect on July 1, 2025. As a result of the settlement, new terms governing the relationship between the NCAA and its student-athletes will include:
- $2.8 billion will be paid as damages to former D1 student athletes who played prior to NIL, and lost earning opportunities.
- Roster limits will be implemented for each sport, replacing the sport-by-sport scholarship limit that had been in place. Athletes can be “grandfathered” on to the roster if there are student athletes who lost their roster spot due to the new limits.
- Salary cap for participating D1 schools of $20.5 million for the upcoming academic year. This cap will increase over time.
Following this ruling, several changes will be implemented in college sports, including:
- Due to the roster limits, there is little potential for walk-on athletes.
- NIL Collectives, once a big player in the NIL space due to broker NIL agreements may be dissolved or integrated into school-led programs.
- NIL is not being replaced by this settlement; however, student athletes no longer have to look outside the university to be paid.
- Power Conferences (PAC-12, Big 10, ACC, SEC, and Big 12) have created a College Sports Commission, CSC, to enforce the salary cap, a new vetting process for NIL deals, and roster limits for teams.
- The salary cap does not contain a breakout of how the money should be applied to sports, but most of the $20.5 million is expected to go to the high-profile sports such as football and men’s basketball, which could draw Title IX scrutiny and lead to additional legal challenges.
Some observers suggest that under these new rules, student-athletes might choose to remain in college sports longer, as they could potentially earn comparable or greater compensation than they would by turning professional immediately.
Risk Management for Universities
As Universities build out process and procedures to comply with this new agreement, some risks that should be taken into consideration are:
- Delayed Distribution of Revenue to Student-Athletes
Institutions should implement robust procedures to ensure timely and accurate disbursement of revenue share payments to student-athletes. - Inadequate Monitoring of Salary Cap and Roster Limits
Universities must establish effective monitoring mechanisms to track sport-specific roster counts and ensure compliance with salary cap thresholds as outlined in the agreement. - Insufficient Internal Controls Over Distribution Processes
Internal control frameworks should be updated to incorporate oversight of student-athlete revenue share payments, ensuring transparency, accountability, and audit readiness. - Lack of Stakeholder Education on New Requirements
Comprehensive training and communication strategies should be deployed to educate all relevant stakeholders—including athletics staff, compliance officers, and finance personnel—on the implications of noncompliance and the operational impact of the new requirements.
About Schneider Downs Higher Education Services
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