What the House v. NCAA Ruling Means for College Sports

By Josie LeCompte

Disclaimer: This article reflects personal opinions and is not affiliated with or endorsed by the NCAA or any schools listed below.

College athletics is officially entering a new era. On June 6, 2025, a federal judge approved the House v. NCAA settlement, allowing universities to begin directly paying their athletes. This change comes just four years after the National Collegiate Athletic Association (NCAA) first permitted student-athletes to earn money from their Name, Image and Likeness (NIL), and marks one of the most significant legal shifts in the history of college sports.

The lawsuit, filed on behalf of current and former college athletes, argued that players were entitled to a share of the billions generated annually by college sports. The court agreed. Now, for the first time, schools can share revenue directly with their athletes, which has been something the NCAA had long resisted.

The settlement includes $2.8 billion in back pay to athletes who played between 2016-24. That money will be distributed across thousands of athletes, with some receiving tens of thousands of dollars depending on their sport, school, and playing time.

However, the future is where the more significant changes lie.

Starting in the 2025–2026 academic year, schools can pay up to $20.5 million annually to athletes across all sports. That number is expected to increase to over $30 million by the early 2030s. Universities are now scrambling to figure out how to reallocate their athletic budgets to meet this new model.

The ability to pay athletes directly is already shaking up the recruiting landscape. Schools that opt into the revenue-sharing model are expected to gain a significant competitive advantage, attracting top talent with the promise of compensation beyond scholarships and NIL deals. This shift could intensify the transfer portal, as athletes seek programs willing to pay them, potentially leading to more movement between schools than ever before. Coaches and athletic directors will need to adapt quickly, crafting innovative compensation packages to both lure recruits and retain current players in this new, highly competitive environment.

While the new pay structure offers unprecedented opportunities for athletes, it also risks widening the gap between wealthy, high-profile programs and smaller schools with fewer resources. Powerhouse programs with bigger budgets will likely offer more substantial payments, further cementing their dominance in recruiting and competitive success. Meanwhile, smaller schools may struggle to keep pace, especially in non-revenue sports where funding is already tight. This could lead to greater disparities in college athletics, challenging the balance and fairness that the NCAA once sought to maintain.

One school that is already adjusting is Texas A&M. During a press conference, Texas A&M’s athletic director, Trev Alberts, mentioned their strategy to adapt to these new regulations.  

“We’re a football school,” Alberts said. “And we’re going to support our athletes like it.”

According to the Houston Chronicle, they’re planning to increase their total number of athletic scholarships and cut costs in other areas of the department to free up funds for athlete compensation.

Still, this change hasn’t been without pushback.

Some current and former female athletes are filing objections, saying the revenue-sharing model disproportionately favors men’s sports, particularly football and basketball. While the court has acknowledged the concern, the judge approved the plan and left the door open for future Title IX lawsuits to address gender-based inequities in pay.

Others worry about the impact this will have on non-revenue sports, including swimming, gymnastics, and wrestling. Athletic directors will have to make hard decisions on how to fund all programs equitably while still staying within new payment guidelines.

Schools are not automatically required to opt into the revenue-sharing model, but many are expected to. Each university must decide whether it wants to participate in the new system. Opting in allows them to begin compensating athletes directly from their athletic department revenues, but also means complying with new regulations and caps set by the ruling. Most major programs, particularly those in the Power 5 conferences, are expected to participate, given the competitive edge it provides in recruiting top talent. If a school chooses not to opt in, they may risk falling behind, both in performance and in athlete retention, as players naturally gravitate toward programs where they can be paid.

For athletes, the process is just as personal. While all eligible student-athletes can receive a share of the school’s pool if their university opts in, they’re not forced to accept the money. Some may decline participation for personal or legal reasons, such as maintaining eligibility for other forms of aid or pursuing amateur status in Olympic sports. Others might opt out due to the potential tax or financial aid implications that come with being classified as an employee or receiving direct compensation. International students are also ineligible to receive payment from their schools. As with NIL deals, education around financial literacy, taxes, and contracts will now be more important than ever for college athletes navigating this new chapter.

Another major change introduced by the decision is the implementation of roster caps, which are limits on the number of athletes who can receive revenue-sharing payments in each sport. These caps are intended to help schools manage costs and ensure a consistent distribution of funds across athletic programs. For example, football might have a cap of 85 scholarship athletes eligible for payments, while other sports like basketball or soccer would have smaller, sport-specific caps. Critics argue that this could create a tiered system where walk-ons and lower-depth-chart players are left out, potentially widening the gap between top-tier athletes and their teammates. On the other hand, proponents say it provides a necessary framework to control spending and prevent wealthier programs from simply outpaying everyone else. How schools balance these limits while maintaining team unity and fairness will be a new challenge in the post-settlement landscape.

What remains unchanged is that NIL deals are still in place. Athletes will continue to be able to sign endorsement contracts, promote brands on social media, and make appearances for money, outside of what they receive from their schools.

Some athletes may now be making six-figures annually, combining school pay with NIL partnerships. Others might earn less, but still benefit from the new structure in a way that athletes in previous decades never could.

The NCAA, which for decades fought in court to maintain the “amateur” status of college athletes, now finds itself forced to regulate a professional-style system. A new College Sports Commission is being formed to help manage the payment rules, and universities will be held to stricter financial and compliance standards.

The conversation around athlete compensation has been building for years. From Ed O’Bannon’s lawsuit over the use of player likeness in video games to the Supreme Court’s 2021 NCAA v. Alston ruling, each legal challenge chipped away at the NCAA’s traditional structure.

Now, the walls have officially fallen.

The next few years will be filled with growing pains. Lawsuits, new regulations, and tough financial decisions are all expected. But the message is clear: the era of unpaid labor in college sports is over.

And now the athletes who are the ones packing stadiums, bearing the weight of expectations, and grinding year-round are finally starting to claim their share.