The revenue-sharing era of college sports has finally arrived. How will Louisville and Kentucky respond?

About five years after its filing, the seminal House v. NCAA lawsuit has reached a resolution. Its settlement received final approval from Judge Claudia Wilken Friday.

When EA Sports College Football 26 comes out in July, schools will be compensated in a new way. Payouts will be determined by the amount of time users play as teams in the video game, cllct’s Matt Liberman reported.

Documents obtained by cllct show a new structure for royalties from the video game, which made its return last year. CLC Learfield will play a central role in the process, according to the documents, and it’s a shift from last year when the company said it couldn’t historically tie sales of the game to specific schools.

The royalty process is also a change from last year’s tier system. Schools were placed into one of four tiers based on the previous 10 years of final AP poll results, and that determined the revenue distribution. Now, it appears to be based on the time users spend playing as a school.

In a sample scenario from cllct, the total royalties in a university pool would be $5 million with 700 million games played. If users play 7 million games as School A, the school’s allocation would be 1%. Therefore, School A would receive $50,000.

“For each CFB product released by EA SPORTS, we (CLC Learfield) will provide a percentage for each institution based on the games played for that institution as a percentage of the total games played across all institutions,” a document says. “This percentage of games played will become the final allocation percentage for each school that will be applied to the total gross royalties for all institutions received.”

EA Sports College Football 26 will look to build on the success of College Football 25, which became the largest new console game launch in North America in 2024. EA also announced the video game had seen 6.5 million unique players to date. Quick math shows EA brought in more than $400 million in sales from the game.

This year’s standard edition cover will also feature two sophomore wide receivers – Ohio State’s Jeremiah Smith and Alabama’s Ryan Williams. Additionally, the deluxe addition features a mix of current college football stars, head coaches and legends, as well as fans in the background.

EA Sports also released a trailer May 29, providing an inside look at gameplay. It also showed new features such as “Enter Sandman” by Metallica before a Virginia Tech game, as well as some of the coaches in the game, such as Ohio State’s Ryan Day and Texas’ Steve Sarkisian.

A federal judge Friday granted final approval of the House v. NCAA settlement, a watershed agreement in college sports that permits schools to directly pay college athletes for the first time.

The settlement, which resolves a trio of antitrust cases against the NCAA and its most powerful conferences, establishes a new 10-year revenue-sharing model in college sports, with athletic departments able to distribute roughly $20.5 million in name, image and likeness revenue to athletes over the 2025-26 season. Previously, athletes could earn NIL compensation only with outside parties, including school-affiliated donor collectives that have become instrumental in teams’ recruiting.

The NCAA and the power conferences (ACC, Big 12, Big Ten, Pac-12 and SEC), as defendants in the settlement, also agree to pay nearly $2.8 billion in damages to Division I athletes who were not allowed to sign NIL deals, dating back to 2016. The damages will be paid out over 10 years, with most of the money expected to go to former power-conference football and men’s basketball players.

Universities can begin directly sharing revenue with college athletes starting July 1.

A public letter from NCAA President Charlie Baker described the settlement’s approval as “a new beginning for Division I student-athletes and for the NCAA.”

Approving the agreement reached by the NCAA, the defendant conferences and student-athletes in the settlement opens a pathway to begin stabilizing college sports,” Baker wrote in the letter. “Opportunities to drive transformative change don’t come often to organizations like ours. It’s important we make the most of this one.”

Judge Claudia Wilken of the Northern District of California, who previously ruled against the NCAA in the O’Bannon and Alston cases, granted approval roughly a year after parties agreed to settlement terms and nearly two months after a final approval hearing on April 7, when Wilken heard testimony from more than a dozen objectors. Lawyers for both the plaintiffs and defendants noted that the number of objections and opt-outs in the settlement represent a tiny fraction of the nearly 400,000 athletes in the certified class.

Some of those objectors delayed approval, largely citing the settlement’s new roster limits. The limits, which replace sport-by-sport scholarship limits, cap the maximum roster size per team while allowing for every roster spot to receive a scholarship. Schools can offer scholarship funds – partial or full – as they see fit, creating more potential opportunities. But as schools pre-emptively prepared to comply with those new limits, they removed roster spots for thousands of walk-ons, particularly in football, and partial scholarship athletes in nonrevenue sports.

In late April, Wilken offered an ultimatum, instructing the settlement parties to revise the terms in a way that mitigated any lost roster spots as a result of schools preparing for the new roster limits, or she would deny the whole agreement. Settlement lawyers responded with an amendment that allows for voluntary “grandfathering” of any athletes who lost roster spots as a result of the roster limits, a status that will follow those athletes through the remainder of their eligibility, whether they return to their original school or transfer elsewhere.

The initial House v. NCAA case – brought by plaintiffs Grant House, a former Arizona State swimmer, and Sedona Prince, then an Oregon women’s basketball player – was filed in June 2020. It challenged NCAA policy at the time that prohibited athletes from being compensated for the commercial use of their NIL rights or from sharing in the revenue generated from NCAA and conference television contracts. The case was later consolidated with two similar suits, Carter v. NCAA and Hubbard v. NCAA.

The cases had not gone to trial. The NCAA and Power Five conferences, fearful a verdict might result in much higher damages, agreed to a settlement in May 2024. Wilken granted preliminary approval in October .

The NCAA’s traditional amateurism model, in which athletes could not receive any compensation beyond a scholarship, began to crumble in 2014 when Wilken ruled against the NCAA in a suit brought by former UCLA star Ed O’Bannon, who objected to his image being used in an EA Sports video game without his permission. Wilken ruled for the plaintiffs, but after an appeals court struck part of her decision, the only tangible effect was that schools began offering cost-of-attendance stipends.

The next major case, Alston v. NCAA, made it to the Supreme Court, where the justices ruled 9-0 against the NCAA. Often mischaracterized as a case about NIL, Alston’s main impact was that it allowed schools to provide athletes $5,980 a year in academic expenses. The lopsided decision left the NCAA vulnerable to additional legal challenges regarding rules that limited compensation, and it was delivered on June 21, 2021, nine days before numerous state laws allowing NIL payments were set to go into effect. The NCAA quickly scrapped most of its intended restrictions on NIL.

In the years since, many athletes have entered into deals with local companies and struck lucrative endorsement deals with national brands like Gatorade and New Balance, as intended. But a far more common practice involves boosters using purported NIL deals to lure recruits or players from the transfer portal to their favorite school. The NCAA’s enforcement division initially sought to punish schools that used NIL as a form of “pay for play” or recruiting inducement, but when the University of Tennessee came under fire in early 2024, the state’s attorney general sued, and a judge issued an injunction prohibiting the NCAA from enforcing those rules.

The amount of money being spent in the NIL arena has skyrocketed since 2021. Last year, Ohio State Athletic Director Ross Bjork said the football team – which later won the national championship – was earning $20 million in NIL. CBS Sports recently reported that a number of men’s basketball rosters have topped $10 million for next season. Earlier Friday, the Athletic reported that Texas Tech softball pitching ace NiJaree Canady signed a second million-dollar deal, roughly a year after signing her first one.

To this point, collectives supporting specific schools have ruled the market, but administrators are hoping the House settlement will curtail that influence. In addition to schools being allowed to make NIL deals themselves, the new model also requires all outside NIL deals of more than $600 to go through a clearinghouse that will determine whether the payments are for a valid business purpose and reflect fair market value. The settlement establishes an enforcement arm that will penalize schools that go over the $20.5 million cap.

The NCAA’s Division I Board of Directors recently approved a series of proposals, pending settlement approval, that will strike 153 rules from the association’s handbook and clear the way for the settlement terms to be implemented.

The settlement represents a significant shift in college sports, but it will not mark the end of the NCAA’s legal challenges. Among numerous ongoing cases, Johnson v. NCAA was filed in 2019 in Pennsylvania and seeks to have athletes classified as employees who are entitled to minimum wage compensation. The NCAA’s efforts to dismiss the case have thus far been denied. Revenue sharing and third-party NIL constraints could also invite additional lawsuits on the basis of Title IX, antitrust violations and conflicts with state laws.

NCAA and power conference stakeholders continue to pursue antitrust exemptions in the form of Congressional intervention, in hopes of codifying the settlement and its effectiveness moving forward. President Donald Trump has explored a new commission focused on the issues facing college sports, led by former Alabama head coach Nick Saban and billionaire Texas Tech board chair Cody Campbell, though it is paused as members of Congress pursue legislation.

Judge Claudia Wilken approved a settlement in House v. NCAA on Friday night. Following that decision, schools will be permitted to pay student-athletes directly beginning on July 1.

While name, image and likeness, or NIL, has allowed for compensation to college athletes for the last four years, this will change how the compensation works.

ESPN’s Dan Murphy explained the differences.

“Since 2021, college athletes have been allowed to make money from third parties via name, image and likeness (NIL) deals,” Murphy said. “Boosters quickly organized groups called collectives that used NIL money as de facto salaries for their teams, in some cases paying millions of dollars mostly to top-rated basketball and football players. Now, that money will come straight from the athletic department.”

Pete Nakos of On3.com laid out how things will look following Friday’s ruling.

Beginning July 1, schools will be able to share $20.5 million with athletes, with football expected to receive 75%, followed by men’s basketball (15%), women’s basketball (5%) and the remainder of sports (5%). The amount shared in revenue will increase annually.

Power Four football programs will have roughly $13 to $16 million to spend on rosters for the 2025 season. Many schools have front-loaded contracts ahead of the settlement’s approval, taking advantage of contracts not being vetted by the newly formed NIL clearinghouse.

There are also back damages to be paid. The ruling detailed what those will look like.

“Pursuant to the SA, Defendants have agreed to pay $2.576 billion in total to compensate members of the damages classes. Damages payments will be paid yearly over the course of ten years following the Effective Date.”

Additionally, as Chris Vanini of The Athletic reported, there are changes to the roster limits for FBS football teams.

With the House settlement, FBS football rosters will drop to a 105-player limit BUT

– All can be on scholarship, no more 85 limit
– Schools are not expected to use all 105 schols and will have walk-ons
– Players who would’ve been cut can be grandfathered in for their careers

— Chris Vannini (@ChrisVannini) June 7, 2025

It’s not an exaggeration to say that this is one of the most significant rulings in the history of college athletics.