Today marks a monumental inflection point in the history of American college sports. A federal court in California heard final arguments on a proposed $2.8 billion legal settlement that, if approved, will usher in the most sweeping structural overhaul in NCAA history.

The case — House v. NCAA — consolidates multiple antitrust lawsuits challenging the NCAA's restrictions on athlete compensation. More than just a legal win for student-athletes, the proposed settlement signals a philosophical shift: from amateurism rooted in nostalgia to a new collegiate model that acknowledges the commercial realities of big-time sports.

⚖️ What the Settlement Does: A Two-Pronged Transformation

1. Backpay for Past Players
The first component of the House settlement is backward-looking. It allocates $2.75 billion in damages to compensate current and former Division I athletes who were denied the opportunity to profit from their Name, Image, and Likeness (NIL) prior to July 1, 2021 — when the NCAA first relaxed its NIL restrictions.

Distribution will be based on sport, conference affiliation, and participation, with Power Five football and men's basketball players expected to receive the largest payouts. More than 88,000 athletes have already filed claims.

2. Revenue-Sharing Going Forward
The second — and more disruptive — aspect involves future reform: allowing schools to directly share revenue with athletes. Schools in Power Five conferences and any institution opting into the settlement will be permitted to allocate up to $20.5 million per year (increasing over time) to pay athletes.

This transforms athletic departments into semi-professional enterprises, with schools now expected to manage rosters and salaries in ways reminiscent of professional franchises.

A New Operational Framework

• Roster Limits Replace Scholarship Caps: Instead of limiting scholarships, the NCAA will limit the number of athletes per team — a seismic change that may leave some athletes without a spot, even if they were previously recruited or promised support.

• Third-Party NIL Clearinghouse: Every NIL deal exceeding $600 must now be vetted by a Deloitte-run clearinghouse to prevent workarounds that would skirt the revenue-sharing cap.

• General Managers in College Sports: Athletic departments will likely mirror pro teams, hiring “general managers” to oversee athlete compensation, roster strategy, and deal compliance.

The Human Impact

While the structural benefits for athletes are clear — long-overdue compensation and transparency — the settlement does not come without cost.

• Some athletes are already losing roster spots due to the imposition of limits.

• Recruits are being told scholarship offers are being rescinded.

• High-profile objectors, like LSU gymnast Livvy Dunne, argue that retroactive compensation does not go far enough, particularly for women and walk-on athletes left out of previous earning windows.

One high school athlete, Gracelyn Laudermilch, shared a heartbreaking account of a rescinded offer after a team opted into the settlement — underscoring the emotional toll of this legal and cultural transition.

What's Next?

Federal Judge Claudia Wilken, who presided over the case, will issue a final ruling after reviewing responses to the objections presented. Her comments suggest she's inclined to approve the deal, potentially with modifications — such as a grandfather clause to soften the blow for current athletes.

But even a final approval won't be the end. Expect:

• New lawsuits over the legality of the clearinghouse

• Labor disputes over whether athletes should be classified as employees

• Congressional lobbying for legislative protection

Moving Forward

The House settlement marks a tectonic shift in collegiate athletics, one that reflects economic and cultural realities long overdue for acknowledgment. The illusion of amateurism, in an era of billion-dollar TV contracts and university-branded apparel, has finally given way to a more equitable model.

For athletic departments, compliance officers, collectives, and athletes alike, the road ahead is uncharted — but promising.

Saluja Law continues to monitor these developments closely, particularly where they intersect with NIL rights, athlete employment law, and institutional compliance. We advise stakeholders — including schools, sponsors, and student-athletes — to begin immediate preparation for the new legal and operational landscape.

Need guidance navigating NIL or NCAA compliance?
Contact Saluja Law for expert counsel at the intersection of sports, law, and policy.