College athletes are going to get paid directly by their universities for the first time after a federal judge granted final approval of the House vs. NCAA settlement on Friday.

The settlement, which resolves three antitrust cases, establishes a new revenue sharing model that acts as a salary cap. The model allows athletic departments to distribute up to $20.5 million in name, image and likeness (NIL) revenue to athletes over the 2025-26 season.

Previously, athletes could earn NIL only through outside parties, including school-affiliated donor collectives that were crucial in roster building and recruiting.

Athletes can still sign NIL deals with third parties without it counting toward a school’s revenue-sharing pool. But there will be constraints and oversight on those deals in an effort to eliminate “pay-for-play.”

The settlement also implements roster limits, which will replace sport-by-sport scholarship limits. Each sport will have its own maximum roster size while allowing for every roster spot to receive a scholarship. Schools will offer scholarship funds as they see fit.

So, how does this all impact Penn State? Let’s take a closer look.

Will Penn State commit the full $20.5 million to revenue sharing?

Yes. While the House vs. NCAA settlement allows schools to spread up to $20.5 million to athletes how they see fit, athletic departments aren’t required to do that. Some schools won’t have that kind of money to dole out to their athletes. But Penn State will use every penny.

“Obviously, we’re going to invest the $20.5,” Penn State athletic director Pat Kraft said in February. “… We’re doing that.”

The Nittany Lions are positioned well for this revenue sharing model. Being a part of the Big Ten helps with the significant media rights payouts from FOX, CBS and NBC. Playing at Beaver Stadium with more than 100,000 in attendance for home games helps. Having a massive, passionate alumni base that spends and donates helps.

Penn State was one of five athletic departments in the country to spend $200-plus million in the 2022-23 fiscal year, according to Sportico, along with Ohio State, Texas, Michigan and Alabama. The money is there for the Nittany Lions to invest, and Penn State has prepared for this new system.

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Last July, Penn State athletics released a video of Kraft addressing a broad plan to share revenue with athletes and issuing a fundraising call to help pay for it all.

“This is not the time to rest on our laurels,” Kraft said in the video. “This is the time to double down on our rich history and proven ability to be successful.”

How will Penn State allocate its revenue sharing funds?

We’re not 100% sure. Generally, power conference programs are expected to use 75% of their revenue sharing funds on football — roughly $15 million or so.

Kraft implied in February that football, men’s and women’s basketball and wrestling will get the bulk of the pot. But he also said every Penn State sport will stand to benefit.

“We’re trying to be able to manage the money so that if we need to move on someone, no matter what the sport is, we have the ability,” Kraft said. “There’s the No. 1 fencer in the world, and we need to go use rev-share to maybe tilt it our way? We’re going to be able to do that.”

What will non-revenue sharing NIL look like now?

With little to no oversight, NIL morphed rather quickly into pay-for-play. Over the last few years, donor-run collectives funneled money into football and men’s basketball programs, turning the transfer portal and high school recruiting into bidding wars and free agency.

As a point of reference, Ohio State’s national championship-winning football roster last year cost $20 million to assemble. The revenue sharing model is looking to eliminate that.

But even as schools are paying players, third-party companies and organizations will still have an opportunity to work with athletes. It’s just going to be more regulated.

A new enforcement structure outside the NCAA called the College Sports Commission will oversee NIL deals between athletes and third parties that don’t fall under revenue-sharing agreements. Deloitte has been contracted to assess fair-market value of those deals.

Kraft sees a fair-market NIL as an advantage for Penn State athletes.

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“In this new system, you’re going to have to show fair-market value. This is where the power of Penn State is a huge asset,” Kraft said. “Because the fair-market value for the starting quarterback at Penn State is pretty good. And we have to lean into that with our business partners. That’s the new world of name, image and likeness.”

How will the roster limits affect Penn State football?

Previously, there was an 85-scholarship limit and a 120-player limit, including walk-ons, in college football. After the House vs. NCAA settlement, college football’s new roster limit will be 105 players — and everyone can be on scholarship.

More scholarship opportunities will be available. That’s a good thing. But James Franklin has long been frustrated by the prospect of having to cut dozens of players.

“I don’t like it at all,” Franklin said after the Blue-White game. “I’m a D2 football player. I went to college on a $1,500 scholarship and a full Pell Grant. I know what the game of football and college athletics does in terms of helping build well-rounded individuals. I’m fighting and scratching and clawing to hold on to what I believe college athletics is all about.”

Fortunately, that 105-player limit will be loose for the next few years. The NCAA and power conferences agreed to revise settlement language to allow schools to grandfather-in athletes on existing teams, as well as recruits who enrolled on the promise of a roster spot.

Penn State football’s roster is currently listed at 126 members. Thanks to that revised language, Franklin doesn’t have to have too many tough conversations this offseason.

“I don’t want to lose any of them,” Franklin said. “I’d like for these guys to stay a part of the program until they graduate. A lot of them chose Penn State to get their degree from Penn State and play football here.”

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