On June 6, 2025, Judge Claudia Wilken entered an order approving the class action settlement, the Fourth Amended Settlement Agreement and Second Amended Injunctive Relief Settlement, in House v. NCAA, Hubbard v. NCAA, and Carter v. NCAA (the “House Settlement”). The key takeaways are as follows:
- The House Settlement calls for backpay in the amount of $2.8 billion paid over a ten-year period. However, an appeal has been filed, thus these payments are on hold until the appeal is resolved.
- Rather than having scholarship limits (i.e., grant-in-aid), teams will have roster limits. Subject to other agreements such as conference limitations, colleges and universities can provide scholarships up to the roster limits. A list of roster limits can be found at https://businessofcollegesports.com/other/new-roster-limits-set-by-house-v-ncaa/.
- All NIL deals of $600.00 or more must process through NIL Go, which will be administered by the College Sports Commission. The College Sports Commission is charged with determining whether an NIL deal is made for a “valid business purpose” and whether compensation is “reasonable”. More on the College Sports Commission can be found at https://www.collegesportscommission.org/nil.
- The House Settlement permits revenue sharing between colleges and universities and athletes. Each college and university is permitted to be share $20.5 million in revenue during the 2025-26 academic year.
To help better understand the House Settlement, on June 13, 2025, the NCAA issued the Question and Answer: Implementation of the House Settlement (“NCAA Q&A”) (found at https://ncaaorg.s3.amazonaws.com/governance/d1/legislation/2024-25/June2025D1Gov_PhaseThreeInstSetQuestionandAnswer.pdf). Although there are several interesting points in the NCAA Q&A, one specifically jumped out. On pages 23-24 of the NCAA Q&A, the NCAA Q&A addresses how multiyear agreements count when an athlete transfers to a new institution. The example provided is as follows:
Example No. 2 – Transfer:
Student-athlete attends Institution A and student-athlete’s agreement with Institution A includes a $100,000 annual payment under which $50,000 is paid at the beginning of the academic year and the remaining $50,000 is paid only if the student-athlete remains with Institution A for the entire academic year, and a $100,000 buyout if the student-athlete transfers from Institution A.
- Student-athlete transfers to Institution B after the first $50,000 payment is made but prior to the second $50,000 payment
- Unpaid $50,000 installment payment is removed from the cap from Institution A because it was never owed or paid
- Institution B pays the buyout to Institution A on behalf of student-athlete
The $100,000 buyout must count against Institution B’s benefits cap allowance in the year in which it is paid to Institution A. Institution A may not increase its benefits cap allowance by $100,000 as a result of this buyout payment.
When reading this explanation, it conjures thoughts of Mackey v. NFL where NFL players challenged the “Rozelle Rule”. The “Rozelle Rule” was a rule implemented by the NFL that required compensation for players (i.e., cash, player exchange, draft picks, etc.) when a player left one NFL team for another. The players argued the “Rozelle Rule” depressed player movement and compensation and, thus, was an illegal restraint of trade under Section 1 of the Sherman Act. The Eighth Circuit sided with Mackey and his NFL colleagues confirming that the “Rozelle Rule” constituted a concerted refusal to deal and a group boycott in violation of antitrust laws and, specifically, noted that the “Rozelle Rule” was not the product of a bona fide, arm’s length negotiations between the NFLPA and the NFL. It is important to note that the House Settlement is not a collectively bargaining agreement and does not have the protections of the National Labor Relations Act (and associated labor laws) or the non-statutory labor exemption.
There will be more litigation….
If you have any questions, contact Christian Dennie at cdennie@denniefirm.com.
