College athletes will undergo yet another historic change.

U.S. District Judge Claudia Wilken approved the $2.8 billion settlement in the House v. NCAA case on Friday, which allows schools to directly compensate student-athletes.

Under the new agreement, each participating Division I school can distribute up to $20.5 million annually to athletes, with that cap increasing over the next decade.

Moreover, it will provide $2.8 billion in payback to former athletes dating back to 2016, addressing past restrictions on NIL, to some extent.

Judge Wilken’s approval in court also addressed concerns regarding roster limits that would’ve likely impacted walk-on athletes.

The settlement introduces the “Designated Student-Athletes” tag, which is intended to allow those impacted by roster changes to return or transfer without worrying about being penalized.

NCAA President Charlie Baker discussed the settlement in a lengthy open letter.

“Many looked to April’s hearing about the House settlement as a culmination of sorts, but the court’s final approval of the settlement in fact marks a new beginning for Division I student-athletes and for the NCAA,” Baker wrote. “For several years, Division I members crafted well-intentioned rules and systems to govern financial benefits from schools and name, image and likeness opportunities, but the NCAA could not easily enforce these for several reasons.

“The result was a sense of chaos: instability for schools, confusion for student-athletes and too often litigation. Sometimes member schools even supported that litigation — some of which spurred hastily imposed court orders upending the rules,” he continued.

Baker additionally acknowledged the challenges ahead involving more change, noting:

“Going forward, the defendant conferences will be responsible for implementing several elements of the settlement, including the design and enforcement of the annual 22.5 percent cap (approximately $20.5 million in year one) for financial benefits a Division I school may direct to student-athletes,” he outlined. “In addition, the court maintains jurisdiction over the implementation of the settlement, and the plaintiffs will continue to track progress.”

Baker hailed this as positive, adding, “The defendant conferences are also responsible for launching and enforcing a series of rules regarding the third-party NIL contracts student-athletes may enter into. With these reforms, along with scholarships and other benefits, student-athletes at many schools will be able to receive nearly 50 percent of all athletics department revenue. That is a tremendously positive change and one that was long overdue.”

Baker concluded by pointing out that “change at this scale is never easy.”

Changes are set to take effect beginning on July 1.

The NCAA’s 119-year amateurism model died Friday with a judge’s pen as the landmark House v. NCAA antitrust settlement received final approval, opening the door for millions of dollars to be shared between schools and players for the first time.

U.S. District Judge Claudia Wilken gave final approval of the landmark settlement after five years of litigation, ending with nearly one year of discussions and tweaks after the NCAA and power conferences initially voted to settle the suit in 2024. The $2.8 billion, 10-year settlement will pay past players for missed name, image and likeness opportunities and allow colleges to pay current players directly starting July 1.

NCAA president Charlie Baker penned a letter in response to the landmark settlement. 

“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. “This new framework that enables schools to provide direct financial benefits to student-athletes and establishes clear and specific rules to regulate third-party NIL agreements marks a huge step forward for college sports.” 

Schools can share as much as $20.5 million of their revenues with players during the upcoming academic year. The settlement also includes $2.8 billion in back payments for athletes who competed between 2016 and 2024. The new revenue-sharing cap will increase by at least 4% each year during the 10-year agreement. 

The House settlement’s final approval was twice delayed in April after the judge echoed objectors’ concerns over imposing roster limits on current players, one of the pillars of the settlement. Schools were cutting players from rosters in the spring, even though the settlement had yet to be approved, complicating discussions during settlement hearings. The judge asked attorneys to craft a plan to allow current players to be “grandfathered in” with the new roster limits. The NCAA, power conferences and the plaintiffs in the lawsuit instead offered a compromise: schools have the option to keep current players on their rosters and temporarily exceed new limits until their eligibility expires.

The new roster limits were expected to lead to the cutting of nearly 5,000 athletes from teams across the NCAA’s 43 sponsored sports. Some sports will increase roster limits compared to previous years, but many will be trimmed despite offering unlimited scholarships within those new thresholds. Football rosters will shrink to 105 players, resulting in schools cutting more than 20 players, though most schools are expected to exceed those limits by grandfathering in current athletes.

The House v. NCAA class-action antitrust lawsuit was filed in 2020 by Arizona State swimmer Grant House and women’s college basketball player Sedona Prince seeking an injunction against the NCAA and Power Five conferences. It sought to lift restrictions on revenue sharing of media rights revenues. Powerful antitrust attorneys Steve Berman and Jeffrey Kessler represented the plaintiffs.

The settlement resolved three antitrust suits: Carter v. NCAA, House v. NCAA and Hubbard v. NCAA.

NCAA rules have long prohibited players from cashing in on their NIL, but that changed July 1, 2021 when the organization began allowing players to earn money from third parties and collectives. The House settlement will enable schools, for the first time, to pay players directly.

How schools plan to divvy up to $20.5 million among their sports has been a point of contention, with no legal framework to follow. Most schools are expected to mirror the back-payment formula outlined in the $2.8 billion settlement. That means roughly 75% of future revenue will be shared with football players, 15% to men’s basketball, 5% to women’s basketball and 5% to all remaining sports. Some schools have opted to mirror the gross revenue each sport averages, which could lead to more than 85% of the salary pool being set aside for football players.

How revenue-sharing will affect skyrocketing NIL deals among third parties is unknown. Still, those deals with third parties and collectives outside the revenue-sharing plan will soon face intense scrutiny from a new enforcement entity starting July 1. Experts believe it will help curb “pay-for-play” schemes between boosters and players far beyond perceived market values. Many multi-million dollar deals with high-profile players were struck in the months before the House settlement’s approval so that those deals would not be scrutinized by the enforcement entity, which does not have authority until July 1.

The power conferences are expected to soon announce the College Sports Commission, an organization tasked to oversee the settlement’s terms and enforce new rules. The power conferences hired Deloitte and LBI, major players in revenue management for professional sports, to develop software to dissect NIL deals and track players’ revenue-sharing contracts. The CSC will police NIL deals over $600 with a new clearinghouse called “NIL Go,” sources told CBS Sports. Deloitte will use data from past endorsement deals with athletes to review boosters’ NIL deals and determine whether an agreement exceeds an athlete’s fair market value.

Schools’ revenue-sharing payouts will be monitored by an enforcement arm called “CAP,” sources said. 

NIL deals under scrutiny will be subject to an arbitration process, which could speed up decisions on eligibility and penalties under the new system. The NCAA, which had become toothless in NIL enforcement as it was challenged legally state to state, will not be directly involved in enforcing NIL deals.

“I certainly think that’s something we’ll have to work with on a coordinated basis, but on some level … that could be a really nice way – and it has an arbitration process, and it can do fact finding,” NCAA president Charlie Baker said last week. “There’s a lot to like about that.”

Schools are expected to pay Deloitte as little as $5,000 or as much as $500,000 for the software, according to documents shared with athletic departments last week.

College sports fans, the future is now.

A federal judge has approved the House v. NCAA settlement on revenue sharing, clearing the way for it to take effect on July 1.

From that day on, colleges will be allowed to directly pay their student-athletes, so long as they stay under a predetermined annual cap.

NIL, or name, image and likeness, deals, including from booster-funded collectives, will remain available to college athletes, but most deals will now be reviewed by a clearinghouse aimed at making the NIL market more organized and fair.

The now-approved settlement will also bring with it new scholarship rules and roster limits, and it will resolve multiple antitrust lawsuits with a $2.8 billion payout to athletes who couldn’t access NIL funds in the past due to the timing of their college careers.

Lingering legal issues

Although the ruling will change college sports as you know it, it actually won’t create much work for school leaders in the short term.

Most programs are already prepared for a post-settlement world since Judge Claudia Wilken granted preliminary approval of the plan in October.

Over the past few months, coaches have been meeting with athletes about the changes and school administrators have prepared for revenue sharing, such as by hiking the price of concessions, as the Deseret News previously reported.

Final approval of the settlement does open the door to new types of lawsuits, including legal battles over the clearinghouse’s assessments of NIL deals.

College sports experts, including Stewart Mandel at The Athletic, anticipate battles over athletes’ “fair market value” and athlete employment rights.

“I remain skeptical that (the settlement) will solve much of anything,” Mandel wrote in early April.

The House v. NCAA settlement is expected to supercharge debates over related antitrust issues, including whether student-athletes are employees.

“Industry leaders have asked Congress to write a new law that would prevent athletes from becoming employees and provide the NCAA with an antitrust exemption to create some caps on player pay and transfers,” per ESPN.

Background of the House settlement

Although many legal battles are yet to be fought, most college sports leaders see the House v. NCAA settlement as an important step forward.

Supporters believe it will help tame the chaos of the current NIL era, which began in 2021, when the Supreme Court ruled that individual athletes, not their schools, should control — and be able to profit off of — athletes’ name, image and likeness rights.

That ruling ultimately made it harder for many programs to hold on to their star players, since it made it possible for booster collectives at other schools to tempt them away with major NIL deals, as the Deseret News previously reported.

While top athletes will still be able to snag huge deals moving forward, the settlement returns some power to schools — and should reduce the influence of collectives.

“NCAA president Charlie Baker and others believe the deal will help schools regain control and tamp down the sky-rocketing, largely unregulated market for paying college players through third parties,” ESPN reported.

In a letter released Friday after the House settlement was approved, Baker wrote that he believes stabilization is on the way for college sports, but knows challenges remain. He called on Congress to take action to ensure that schools can enter the new era on solid ground.

“Opportunities to drive transformative change don’t come often to organizations like ours. It’s important we make the most of this one,” Baker wrote.

U.S. District Judge Claudia Wilken on Friday night granted final approval to the settlement between the NCAA, power conferences and current and former D-I athletes represented by the House, Carter and Hubbard antitrust litigations.

The approval green-lights a new and more professionalized era in college sports starting in the 2025-26 academic year. Participating colleges will directly pay athletes a share of up to 22% of the average power conference athletic media, ticket and sponsorship revenue, with $20.5 million pegged as the initial annual cap. Those payments will be in addition to both athletic scholarships, which cover tuition, housing, health resources and other benefits, and NIL deals athletes sign with third parties.

To be clear, colleges are not obligated to participate in revenue-sharing, and those that participate are not obligated to pay the full $20.5 million. The Ivy League, which recently defeated an antitrust lawsuit over its no athletic scholarship policy, has opted out of the settlement and will thus continue to use longstanding amateurism rules for student athletes.

The settlement also contemplates a $2.8 billion damages payout over a 10-year period, though the damages portion could be delayed if the terms are appealed to the U.S. Court of Appeals for the Ninth Circuit. The money will be paid to D-I athletes dating back about eight years and will reflect lost NIL, video-game and broadcasting opportunities on account of eligibility rules. 

The settlement will end scholarship limits, meaning colleges can offer a greater number of full (or partial) scholarships to their athletes. A previous version of the settlement contemplated roster limits that would have gone into effect immediately and, at some schools and for some sports, led to current athletes losing their spots. Wilken disapproved of roster limits taking away spots from current athletes, since those athletes couldn’t preserve their spot by opting out of the settlement. In response, attorneys for the NCAA and athletes modified the roster methodology so that, at a school’s discretion, current athletes and recruits can remain on rosters for the duration of their NCAA eligibility and not count against limits. Objectors protested, complaining the grandfathering provision doesn’t help athletes whose schools decline to protect. The NCAA and plaintiffs’ attorneys countered that roster spots have never been guaranteed in college sports. Wilken deemed the provision to be a sufficient fix.

Another new feature is that NIL deals with third parties that exceed $600 can face independent review. The review will ensure those deals are not substantively pay-for-play arrangements, which remain prohibited by NCAA rules. 

Wilken’s approval was expected. Although she criticized several features of the settlement, including roster limits and how future college players preserve litigation rights, Wilken was generally positive about the deal. 

The applicable standard and limited scope of review also made Wilken’s decision likely. Wilken only needed to find the deal is fair, reasonable and adequate to the settlement classes and that it adequately addresses the federal antitrust issues raised in the three cases. 

As Wilken repeatedly noted, the possibility that the settlement and its implementation might be challenged through lawsuits raising Title IX, state NIL statutes and federal and state employment and labor law claims fell outside her purview. It is all but certain that the revenue-sharing component will face Title IX lawsuits, given that participating schools are expected to share much more revenue with male athletes, particularly football players, than female athletes. As Sportico explained, whether Title IX ought to apply to payments that reflect NIL is an unresolved legal question that has competing arguments.

Likewise, litigation brought by class members who opted out, such as those in Hill v. NCAA, will proceed on their own tracks. The same is true of ongoing litigation (Johnson v. NCAA) over whether college athletes are employees and whether college athletes who seek NIL deals and now revenue share can remain eligible to play past current NCAA eligibility rules (Pavia v. NCAA and related cases). Congress and President Donald Trump could also consider legislation that alters the legal landscape of various college sports issues, and Trump is weighing an executive order on college athlete compensation that might spawn new legal challenges.

While the NCAA will continue to contend with a bevy of legal issues, Wilken’s ruling is a major victory for NCAA president Charlie Baker. The former Massachusetts governor has been open to reforms on athlete compensation and sought pragmatic changes. The settlement will help to stabilize the college sports landscape, at least at power conference schools. However, in the absence of athlete unionization and collective bargaining, NCAA rules will remain the target of antitrust litigators for years to come.

Speaking of those litigators, Wilken’s ruling is a win for them, too. Not only have Jeffrey Kessler, Steve Berman and their colleagues negotiated a deal that will pay billions of dollars to current and former college athletes, but they’re positioned to secure nearly $500 million in attorneys’ fees and reimbursements. 

As for Wilken, the 75-year-old judge and former law professor has played a historic role in reshaping the business and law of college sports. She presided over the lawsuits brought by Ed O’Bannon (NIL) and Shawne Alston (education-related financial awards) and has now approved a new economic system. It’s fair to say that had other judges presided over those cases, some of the tectonic changes at stake might not have occurred or been delayed for years. 

HELENA — Helena’s Russell Baker is one of the top male gymnasts in Montana, recently claiming a state championship in the still rings.

“Most of the time when I’m competing, I don’t really think,” said Baker, a sophomore at Capital High School. “I just kind of do because it’s muscle memory. And I’ve done so many routines over the past seven, eight years, that it’s just stuck. Like, I don’t really think.”

Baker joined gymnastics at the age of 9 and now practices four times a week for three hours at a time. Baker’s dedication is something his coach said should be celebrated.

“There’s a lot of guys that they will drop out in those middle school years just because there is that push/pull of all their peers that are doing football and basketball and those more high school-oriented sports,” said Casey Hammond, owner of Gym406 in Helena and Baker’s coach. “So, to see Russell persevere through those years and that time in his life, and now that he’s a sophomore in high school and he’s still showing up every day and putting in the work, that says a lot.”

Hammond said participation in boys gymnastics is lower in Montana than many other parts of the country. But Baker and his state championship serve as a shining example of what’s possible for young gymnasts interested in the sport if they work hard and stick with it.

“There’s a lot of boys that come into gymnastics and watch me do my thing and say, ‘Oh my gosh, you’re so cool. How do you do that?’ And I say, my number one answer is, ‘I’ve been doing this as long as you’ve been alive,'” said Baker. “I really enjoy watching the little boys look up to me. It feels good because I was at one point a younger guy looking up to the older guys.”

Hammond said having a gymnast like Baker as part of his program is essential.

“Because they do look up to him, and it kind of normalizes gymnastics,” said Hammond. “So, if they’re kind of anxious or nervous about learning something, but if they see Russell, like he does this every single day, it’s easier for them to reach those goals as well. It’s not as big and scary. … I don’t think he realizes how much that means to them. It’s huge, in their eyes, having someone like Russell in their world.”