On June 6, 2025, a federal district court judge approved a landmark settlement in the class action lawsuit known as House vs. NCAA, bringing an end to the amateurism model in college athletics. According to the judge, the settlement is expected to open the door for Division I student-athletes to receive about $1.6 billion in new compensation and benefits per year, with that amount increasing over the settlement’s 10-year term.

The approval, however, does not conclude the litigation — several appeals already have been filed. Read on to learn about the settlement’s provisions and the impact of the appeals.

The Settlement Provisions

The settlement covers three lawsuits filed against the NCAA and the so-called Power Five Conferences (the ACC, SEC, Big 10, Big 12, and Pac 12). About 400,000 current and former Division I student-athletes generally argued that NCAA scholarship limits and restrictions on the athletes’ ability to receive compensation violated anti-trust law. Class members include all student-athletes who were eligible and on a Division I team roster between June 15, 2016, to Sept. 15, 2024.

The settlement provides both damages and injunctive relief to the claimants:

Damages

The defendants agreed to pay nearly $2.8 billion damages paid into a settlement fund that will be allocated to class members over 10 years to compensate for the use of their name, image, and likeness (NIL) and their athletic services. The settlement fund is divided into two sub-funds (the NIL Claims Settlement Amount and the Additional Compensation Claims Settlement Fund). Payments will be made to three damages classes — football and men’s basketball, women’s basketball, and additional sports.

Injunctive Relief

The settlement:

• Eliminates scholarship limits at schools that opted into the settlement. It is estimated that the change will result in more than 115,000 additional scholarships made available to Division I athletes annually.
• Narrows the NCAA’s NIL restrictions. The NCAA is allowed to prohibit NIL payments to student-athletes by “associated entities and individuals” (for example, booster collectives) only if the payments do not have a “valid business purpose” (generally, to promote a good or service being offered to the public for profit, as opposed to an athletic services deal) with compensation “commensurate with compensation paid to similarly situated individuals with comparable NIL value” (that is, within a reasonable “range of compensation”). The NCAA cannot, however, prohibit NIL payments by other third parties (for example, shoe or energy drink companies).
• Imposes roster limits on schools that opt in to the settlement. Exceptions are allowed for class members whose roster spots were taken in the 2024-25 season or would have been in 2025-26 due to the settlement, for the remainder of their collegiate athletic careers. These athletes will not count toward their schools’ roster limits.
• Allows schools that opt in to provide additional direct payments to student-athletes that are worth up to 22 percent of the Power Five schools’ average athletic revenues each year, with annual increases over the agreement’s 10 years. This “pool cap” is estimated to start at more than $20 million per school for 2025-26 and reach $32.9 million per school in 2034-35.

NIL Go

The Power Five have established the College Sports Commission to enforce the provisions regarding NIL agreements, roster limits, and direct payments. Among other enforcement measures, student-athletes must report all NIL transactions with a total value of at least $600 on the new online platform known as NIL Go. The Commission will determine whether NIL payments from associated entities and individuals are within the allowed range of compensation and for a valid business purpose.

Under the settlement, though, disputes arising out of NCAA schools’ enforcement of the third-party NIL restrictions must be resolved by neutral arbitration. Previously, the NCAA had all authority to resolve such disputes.

Stay Tuned

Seven appeals were filed with the Ninth Circuit Court of Appeals before the applicable deadline. Among other things, they contend that the settlement violate Title IX, which prohibits sex-based discrimination in education programs, by unfairly benefiting football and male basketball players. The appeals are expected to delay the payment of past damages for several months, if not longer (the forward-looking provisions will proceed as scheduled). The U.S. Supreme Court could end up being the final arbiter.

Up Next

In our next blog, we will cover the tax implications surrounding NIL from the House v. NCAA settlement, and then turn our focus to tax compliance and deductions.