NCAA Settlement: Winners, Losers & What’s Next
- College sports face a seismic shift as a House settlement will allow NCAA schools to directly compensate athletes.
- Starting July 1, each NCAA institution must allocate $20.5 million annually for athlete compensation.
- The direct athlete pay agreement is expected to benefit football and men's basketball players at Power 4 schools, with some programs reportedly allocating up to 90% of the...
The NCAA settlement marks a watershed moment, as schools can now directly pay athletes. This landmark decision, ending years of legal wrangling, mandates $20.5 million per school for athlete compensation, with football and men’s basketball poised to be major primary_keyword beneficiaries. However,the settlement also casts a shadow over secondary_keyword women’s sports and Olympic programs,potentially leading to funding cuts and diminished opportunities. News Directory 3 dives deep into the implications of this revenue-sharing model, exploring how smaller schools might struggle to compete. The landscape of college athletics is undeniably shifting.Discover what’s next and how these changes will reshape the future of the game.
NCAA Settlement Ushers in New Era of Direct Athlete Pay
updated June 09, 2025
College sports face a seismic shift as a House settlement will allow NCAA schools to directly compensate athletes. This landmark agreement, the culmination of two decades of legal battles, promises to inject new money into college athletics and change the landscape of Name, image, and Likeness (NIL) deals. Though, the settlement also raises questions about the future of women’s sports, Olympic programs, and smaller schools.
Starting July 1, each NCAA institution must allocate $20.5 million annually for athlete compensation. This figure, based on 22% of average revenue from ticket sales, television deals, and sponsorships at power schools, could quickly escalate to $25 million, according to Ohio State Athletic director Ross Bjork. While NIL deals will continue,a newly formed College Sports Commission (CSC) aims to maintain these agreements as third-party arrangements,separate from direct university payments.
The direct athlete pay agreement is expected to benefit football and men’s basketball players at Power 4 schools, with some programs reportedly allocating up to 90% of the funds to these sports. This shift addresses concerns that revenue generated by these sports was being unfairly distributed to less profitable programs. Power 4 schools will also have greater financial flexibility to attract transfer portal talent and retain existing players.
However, the revenue sharing model could negatively impact women’s sports, Olympic sports, and mid-major Group of 5 (G5) schools. With football and men’s basketball potentially consuming the majority of the funds, other sports may face budget cuts or even be relegated to club status. Some Olympic sports might not receive any revenue,threatening their existence at smaller programs,according to Sports Illustrated. G5 schools, with limited revenue-generating capacity, may struggle to compete with wealthier programs. Many G5 administrators estimate they can onyl allocate $1-3 million for direct athlete pay, according to Nick Domingue of Ragin’ Review. This puts them in a arduous position, as opting out of revenue sharing could hinder recruitment efforts.
What’s next
The NCAA must first pay $2.8 billion in back pay to athletes who played between 2016 and 2024 for lost NIL value. NCAA President Charlie Baker continues to oppose classifying student-athletes as employees and seeks an antitrust exemption to limit their earning potential. Athletes, conversely, may need to engage in collective bargaining to address issues arising from direct payments. However,this requires a players’ union,which is currently impossible due to the NCAA’s stance on employee status. Resolving the employee classification issue is crucial for establishing transfer limits and equitable salary caps across all programs.