The National Collegiate Athletic Association (“NCAA”) has settled three landmark class action lawsuits—House v. NCAA, Carter v. NCAA, and Hubbard v. NCAA—valued at approximately $2.8 billion (collectively the “House Settlement”). These lawsuits were initiated by former student-athletes who alleged that NCAA rules unlawfully restricted their ability to receive compensation for the use of their names, images, and likenesses (“NIL”), in violation of antitrust laws. The settlement terms, which have been preliminarily approved by the NCAA, Atlantic Coast Conference, Big Ten Conference, Big 12 Conference, Pac-12 Conference, and Southeastern Conference (the “Power Conferences”), will retroactively compensate eligible athletes for lost opportunities and make future changes to the compensation rules across college athletics.
The Settlement Terms Under Review
The NCAA provided clarity on the House Settlement in its Updated Question and Answer document released on December 9, 2024. This guidance outlines the steps the NCAA and its member institutions are taking to prepare for the settlement’s anticipated final approval. Athletes covered by the House Settlement have until January 31, 2025, to object or opt out, with a final approval hearing scheduled for April 7, 2025.
Additionally, schools must decide whether to opt into the settlement by March 1, 2025. Once opted in, institutions must comply with all settlement terms for all sports programs. The most notable provisions in the settlement would include:
- Payment of $2.8 Billion to Former Athletes: Former student-athletes who were active since 2016 are eligible to receive compensation for previously unpaid NIL-related earnings.
- Annual Revenue Sharing: Institutions will allocate a portion of their revenues to create a “Pool,” which will cap the maximum dollar value of additional payments or benefits that Division I institutions can provide to student-athletes each academic year. For the 2025-26 academic year, the estimated Pool cap is approximately $20.5 million, though the final figure will be determined in Q1 of 2025. The Pool will be recalculated every three years, with annual increases of 4% in the second and third years of each period.
- Roster Caps: Beginning in the 2025-26 academic year, teams will have sport-specific roster limits, which is expected to result in significant cuts in some sports, particularly in the Power Conferences.
What Student Athletes Need to Know
- Opt-In Flexibility: Schools can decide each year whether to opt into the settlement and participate in the Pool. However, institutions that opt into the settlement must fulfill several obligations to ensure compliance with the settlement terms. These obligations include:
- Ensuring any additional benefits provided to their athletes comply with the Pool cap.
- Reporting all NIL licenses between the institution and its student-athletes, as well as any other payments or benefits provided beyond what is currently permitted by NCAA rules.
- Reporting all benefits that count against the Pool within 60 days after the close of each academic year (i.e., by June 30). For members of the defendant conferences, these reports will be provided to their respective conference.
- Adhering to roster limits.
- Student-Athlete Disclosure Obligations: All Division I student-athletes must report third-party NIL deals valued at $600 or more, regardless of whether their institution opts into the settlement. The specific details of these reporting mechanisms are still under development.
We welcome you to contact Michaela Kluska at mkluska@leechtishman.com or Ryan Hemminger at rhemminger@leechtishman.com with any questions about this litigation.