A federal judge officially approved a historic legal settlement allowing NCAA schools to directly pay athletes, signaling a major shift in college sports. The settlement resolves three antitrust lawsuits (House v. NCAA) that argued the NCAA was unlawfully limiting athletes’ earning potential.
Key points:
- Schools can begin paying athletes starting July 1, 2025, with an initial salary cap of around $20.5 million per school, increasing annually for the next decade.
- The NCAA will also pay $2.8 billion in back damages over 10 years to athletes who played from 2016 to the present.
- This settlement adds direct payments to existing scholarships and NIL (name, image, likeness) deals.
- Boosters’ payments to athletes will now face stricter oversight, requiring that endorsement deals serve a “valid business purpose.”
- A new enforcement body, the College Sports Commission, will monitor payments and violations, taking over many compliance duties previously handled by the NCAA.
- The settlement avoids immediate athlete job classification changes but leaves unresolved issues about whether college athletes should eventually be classified as employees.
- NCAA leaders continue to seek Congressional action to secure antitrust exemptions and prevent full employee status for athletes, fearing that full unionization could financially strain many programs.
The settlement represents one of the most significant changes to NCAA rules since the Supreme Court’s 2021 ruling against the organization.