Universities can now pay student-athletes directly after a federal judge approved a settlement in the House v. NCAA lawsuit on Friday, providing a new outlet for the future of name, image and likeness.
The NCAA is expected to provide an estimated $2.8 billion to student-athletes who participated in collegiate athletics between 2016 and the present day over the next ten years. The cap on how much an institution can pay student-athletes is estimated to be $20.5 million for the 2025-26 academic year, with adjustments made each year. The settlement is expected to go into effect on July 1.
In 2021, the world of college athletics was revolutionized by an NCAA ruling that allowed athletes to financially benefit from NIL. Now, after months of back and forth in the courts, this settlement represents another major shift in the collegiate arena.
“The approval of the House settlement agreement represents a significant milestone for the meaningful support of our student-athletes and a pivotal step toward establishing long-term sustainability for college sports, two of the Southeastern Conference’s top priorities,” Southeastern Conference Commissioner Greg Sankey said in a statement posted on X, formerly known as Twitter.
The settlement ends three separate lawsuits, which all argued the NCAA had been illegally limiting what student-athletes can earn. This settlement comes from a buildup of different court cases over the years, starting with O’Bannon v. NCAA, which ruled student-athletes must be paid for NIL in 2015, said Trey Dolezal, a sports lawyer at Dolezal & Associates Law and Sports Agency.
“It’s really about allowing these kids to use how much money the schools are making and how much money (the television industry is making),” Dolezal said.
The settlement outlines the general basics of how athlete revenue sharing will work, but there are still many details that have yet to be addressed. Issues such as caps on how much a singular athlete can be paid and how NIL deals will be conducted through the University have not yet been outlined. These details will be addressed as future issues arise, whether through state legislatures or NCAA committees.
“As the journey to modernize collegiate sports continues, we remain focused on identifying and implementing innovative opportunities for our student-athletes across all sports while maintaining the core values that make collegiate athletics uniquely meaningful,” Sankey said.
Dolezal said the settlement worries him, as he believes it still lacks clarity on the transfer process, and could lead to student-athletes transferring to a different school for purely financial reasons.
“I hate to take that away from a kid who gets an opportunity to make some money,” Dolezal said. “I just do not know if it makes the sport better if kids are not playing for their school.”
