The Rule of Reason Meets the Rules of the Game: Antitrust Law and the NCAA’s Day of Judgment
On April 7, 2025, while millions leaned toward their screens in the suspense of the NCAA men’s basketball championship, something quieter—but far heavier—unfolded behind the solemn oak doors of a federal courtroom in Oakland. In the Northern District of California, Judge Claudia Wilken listened as lawyers spoke their final words about a $2.8 billion class action settlement. No scoreboard blinked. No crowd erupted. But what happened in that courtroom will shape the soul of college sports.
On April 7, 2025, while millions leaned toward their screens in the suspense of the NCAA men’s basketball championship, something quieter—but far heavier—unfolded behind the solemn oak doors of a federal courtroom in Oakland. In the Northern District of California, Judge Claudia Wilken listened as lawyers spoke their final words about a $2.8 billion class action settlement. No scoreboard blinked. No crowd erupted. But what happened in that courtroom will shape the soul of college sports.
The story began in the hearts of two athletes—Grant House and Sedona Prince—who named the NCAA and its most powerful conferences as defendants in a lawsuit that declared what many had whispered for years: the NCAA is a price-fixing cartel. Their courage became a magnet. Tymir Oliver joined. So did DeWayne Carter and Nya Harrison. One by one, they stepped into the light, and the court gathered their claims into a single, massive action: In re College Athlete NIL Litigation. The athletes asserted that the NCAA and the Power Five Conferences—comprising the ACC, Big Ten, Big 12, Pac-12, and SEC—colluded to suppress their ability to earn compensation from their name, image, and likeness (NIL). They contended that these organizations enforced rules that prohibited athletes from monetizing their NIL rights, even as the NCAA and its member institutions profited substantially from their entertainment and marketability. This, the athletes argued, constituted an unlawful restraint of trade in violation of federal antitrust laws.
The complexity of antitrust litigation can be reductive to its profound purpose—to preserve the American dream. Free trade stands at the center of American identity. It does not hand out automatic wins; it gives people the right to try. That notion keeps the dream alive for the teenager building a new device in a cramped garage who dares to imagine toppling a giant someday. It emboldens the corner grocery store that decides to outshine the chain supermarket by offering friendlier service. When the marketplace remains open, and when each contender can choose an honest strategy rather than a secret pact, individuals taste the pride of achievement and the promise of a better tomorrow. Antitrust legislation weaves that promise into the fabric of our economy. It says that markets belong not to monopolists but to everyone with the courage to enter them.
Before such laws existed, the promise of an ability to pursue a better life had begun to feel like a lie. Oil barons crushed rivals not with better products but with secret rebates and backroom agreements. Trusts operated like private governments, picking winners and losers behind velvet curtains. Ordinary people paid the cost for this stranglehold. Farmers lost pennies on their crops because railroad tycoons dictated freight charges. Storekeepers struggled to keep their shelves stocked at fair prices. Factory workers carried the heaviest burden of all, laboring for meager wages beneath the looming shadow of corporate overlords who wrote their own rules. These everyday Americans began to walk the quiet, solitary road where dreams were no longer theirs to claim. They stopped believing in the promise that once defined them—as people who could reach, build, and become more.
In that suffocating environment, Congress passed the Sherman Antitrust Act in 1890. The Act did not label all large enterprises as enemies of the public. It went after behavior—collusion and coercion—that turned power into tyranny. The Act pronounced that industry titans had no right to shut out innovative upstarts or rig prices behind oak-paneled doors. Its message was simple: America cannot fulfill its promise of a free marketplace if a handful of giants control all the paths to success. At its core, the Sherman Act invests faith in the scrappy determination of people who dare to push boundaries, trusting that they will keep our markets alive and vibrant. It did not promise an equal outcome but it promised an honest start. And in a country built by people who bet everything on a new beginning, that promise means everything.
The Act forbids: “[e]very contract, combination…, or conspiracy, in restraint of trade or commerce among the several States.” Over the last hundred years, the Supreme Court has chipped away at this hard edge. The law does not punish every friction in the marketplace. Instead, it targets those restraints that smother the very process of competition—like pouring sand into the gears of a machine meant to run freely. To draw this line between harmless and harmful, courts use two distinct tools: the per se rule and the Rule of Reason. The per se rule acts like a fire alarm—if the conduct fits a known pattern, the law treats it as dangerous without further debate. Price-fixing, bid-rigging, and market division fall into this category.
The Rule of Reason, by contrast, asks what the restraint does to the market and whether the benefits outweigh the harms. It takes longer. It digs deeper. This approach demands that courts engage with the real world. Judges must look not only at what the restraint does, but also why the parties agreed to it, how the market works, and what ripple effects the restraint creates for consumers, competitors, and the economy as a whole. In Ohio v. American Express Co., 138 S. Ct. 2274, 2284 (2018), the Supreme Court reaffirmed the Rule of Reason as antitrust law’s default lens. The Court described it as a three-step framework, each step shifting the burden to the next party in line.
First, the plaintiff must carry the initial weight. They must prove that the restraint produces a substantial anticompetitive effect in a defined market. Plaintiffs often point to evidence of higher prices, restricted output, slowed innovation, or other market distortions that signal harm to competition—not just to a competitor.
Next, the defendant takes the stage. If the plaintiff shows harm, the defendant may justify the restraint by offering legitimate, procompetitive reasons. These may include better product quality, improved efficiency, broader consumer access, or the kind of innovation that opens new doors rather than closing old ones.
Then, the burden shifts back. The plaintiff may respond by showing that the defendant’s goals could be reached through less restrictive means or that the justifications serve as pretext—that the restraint masks anticompetitive motives under the veil of efficiency or progress.
This process unfolds in full view of the surrounding market. Courts must consider who the parties are, what the market looks like, and how consumers experience the result. A restraint that looks harsh in a vacuum may, in context, support rather than suppress competition. Sports leagues often need coordination to function. Joint ventures may require shared limits to enable innovation or reach scale. Courts must ask not just what the restraint restricts, but what it enables. Justice Brandeis offered the guiding light more than a century ago. In Board of Trade of Chicago v. United States, 246 U.S. 231, 238 (1918), he wrote that “the true test of legality is whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition.” That sentence still echoes today. The Rule of Reason demands that courts look past labels and into the lived reality of the market—where commerce unfolds, risks get taken, and competition either breathes or chokes.
The NCAA’s current model runs afoul of the rule of reason test. For decades, the NCAA wrapped itself in the story of amateurism. It spun a tale of noble sacrifice while it enforced rigid rules that capped scholarships and punished outside income like it was treason. The NCAA clung to this holier-than-thou idea as a shield against antitrust laws that would have required the organization to share profits with those who lined the NCAA’s coffers for decades. But its days of special treatment ended in 2021. In NCAA v. Alston, 141 S. Ct. 2141 (2021), the United States Supreme Court held that the NCAA’s restrictions on non-cash education-related benefits for student-athletes violated Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, applying the rule of reason test.
Why the rule of reason and not per se test? The Court acknowledged the per se rule applies to conduct that almost always harms competition—like horizontal agreements among competitors to fix prices. But it refused to treat the NCAA’s rules that way. Even though the rules limited competition, the Court recognized that they raised difficult questions about the nature of college sports, the need for eligibility standards, and the realities of competition among educational institutions. These questions resemble those presented in reviewing the fairness of limitations in joint ventures or professional sports leagues—contexts where courts routinely apply the rule of reason analysis. Id. at 2156–57.
The Court then applied the familiar three-step framework to decide the Alston case in favor of the athletes:
Step One – Plaintiffs carried their burden. They proved that NCAA rules suppressed market competition by limiting what schools could offer to attract athletes. These artificial caps distorted the labor market and harmed student-athletes’ economic opportunities.
Step Two – The NCAA failed to justify the restraint. The NCAA claimed that limiting education-related benefits preserved “amateurism,” which allegedly boosted consumer demand for college sports. But the record showed no link between the restrictions and fan interest. The Court agreed with the lower courts that the justification lacked evidentiary support. Id. at 2157–58.
Step Three – Plaintiffs proposed less restrictive alternatives. They suggested options like allowing schools greater discretion and adopting transparency requirements instead of blanket bans. The Court accepted these alternatives and found that they would preserve the NCAA’s legitimate goals without harming competition to the same degree.
The NCAA asked the Court to grant it special treatment under antitrust law, citing its tradition-bound mission and role in regulating college athletics. Justice Gorsuch rejected that plea. “To the extent [the NCAA] means to propose a sort of judicially ordained immunity from the terms of the Sherman Act… we see no basis for such a privilege.” Id. at 2157. Alston did not reach the broader question of direct compensation for athletic performance, but it opened the door. It made clear that courts will no longer rubber-stamp NCAA rules simply because they dress themselves in the garb of tradition. See id. at 2157–58. The decision signaled to lower courts, regulators, and reformers that the NCAA must align its practices with modern antitrust standards. In doing so, the Court shifted momentum toward athletes seeking economic freedom within the system.
And that brings us to the current lawsuit. It picks up where Alston left off and demands compensation. In In re College Athlete NIL Litigation, the plaintiffs—college athletes past and present—stood to gain historic compensation at trial. They faced a system that had long denied them pay while profiting immensely from their talent. They could have won systemic change at trial, but they agreed to a settlement that delivers relief now—before more athletes lose their shot at justice. The $2.8 billion backpay fund honors the value these athletes created, with payments tied to actual playing time and impact. The injunctive relief opens the door to future fairness, guaranteeing athletes a 22% share of athletic revenue and the freedom to profit from their own name, image, and likeness. For the first time, they gain a voice in shaping the rules of college sports. Compared to years of drawn-out litigation and legal uncertainty, this proposed settlement offers meaningful, lasting reform now. It gives the class real compensation and the right to control their future.
For the NCAA and the Power Five Conferences, settlement offers a way to stop the bleeding. A courtroom defeat could have gutted the organization’s remaining legal defenses, encouraged a cascade of lawsuits, and triggered sweeping judicial oversight of college sports. The proposed settlement allows them to help shape a new NIL era and preserve some institutional control. But this will come at a steep price—billions in backpay, a dismantled compensation model, and a public acknowledgment that their rules had harmed the very athletes they claimed to protect. Though the NCAA admits no wrongdoing in the proposed settlement, the size of the payout and scope of injunctive relief written in the proposal tells its own breathtaking story.
Now Judge Wilken stands at the center of what may become the most seismic shift in the history of college sports. On April 7, she acknowledged the scale: 73 formal objections and nearly 400,000 athletes in the class. Judge Wilken will now apply Rule 23(e) of the Federal Rules of Civil Procedure to decide whether the settlement is fair, reasonable, and adequate. Her task is to scrutinize the settlement with care, weighing it against the class's claims, the risks of continued litigation, and the true value of the relief offered. Even after hearing notable objections and with a rising tide of litigation and legal uncertainty on the horizon, momentum pulls toward approval. This is especially since Judge Wilken gave the proposed settlement her preliminary approval last fall. Now, she must make the final call as the final question echoes: Will this settlement close the book on exploitation, or only write a new chapter with different authors?
The $2.8 Billion Relief For Current and Former Players
For decades, college athletes bled for institutions that profited off their sweat. They filled stadiums, sold jerseys, and helped universities ink billion-dollar media deals—yet they carried a machine that never paid them back. Now, for the first time, that machine will write a check. The settlement will create a $2.8 billion fund to compensate nearly 400,000 current and former Division I athletes for the years the NCAA forbade them to profit from their own name, image, and likeness. The proposed $2.8 billion dollar backpay fund merged from painstaking negotiations between athlete-plaintiffs and the NCAA’s most powerful arms. Instead of immediate cash, the parties agreed to spread the payments over ten years—roughly $280 million annually. This approach spared universities from financial collapse while locking in accountability.
The NCAA agreed to absorb roughly 40% of the settlement’s cost—approximately $1.12 billion—out of its own national reserves. This pool of money comes primarily from surpluses generated by the Division I Men’s Basketball Championship (March Madness), which, for decades, served as the NCAA’s financial engine. The remaining 60%, or $1.68 billion, comes from redirected NCAA distributions that would otherwise flow to conferences and member schools. While this structure appears even on its face—60% from members, 40% from the NCAA—the actual financial pain felt by each institution is anything but equal. That’s because the NCAA’s reserve-funded subsidy disproportionately benefits the very schools whose athletes are set to receive the largest payouts.
Here’s why: the Power Five conferences dominate March Madness and, more broadly, dominate NCAA postseason television. Over the last decade, teams from the Big Ten, Big 12, and ACC have regularly made deep runs into the NCAA tournament, earning their conferences large numbers of "units"—a formula the NCAA uses to allocate postseason revenue based on how many games a conference’s teams play. Each unit is worth about $2 million spread over six years. The further a team goes, the more units it earns, and the more money the conference (and its member schools) receive. In the proposed settlement, the NCAA agreed to withhold a portion of these unit payments from schools and conferences and reallocate them to the backpay fund.
Take the Big Ten. It might bring in $30 to $40 million a year from unit shares alone. Redirecting a few million toward the settlement barely dents that total. Athletic departments with $150 million budgets and TV contracts worth tens of millions won’t struggle to absorb the loss. Now consider a smaller conference—say, the Big South. Their total March Madness distribution might not even crack $3 million. A cut of just $500,000 could gut their budget. For a department already leaning on student fees, state funds, or one-time gifts, the redirected funds feel less like a fine and more like a fiscal cliff.
The funding rules of the proposed settlement sharpens a dividing line already running through Division I sports. The Power Five has long signaled its desire to carve out a more autonomous future untethered from NCAA bureaucracy. This settlement pushes them further down that road. It settles past claims that threatened their stability. It uses NCAA reserves built off their success. It offloads costs onto the rest of the membership. And it leaves them better positioned to rewrite the rules. This issue sparked the State of South Dakota, et al. v. NCAA lawsuit filed in the Third Judicial Circuit, Brookings County (Appendix K to Objections). South Dakota colleges filed the action against the NCAA in January. The Plaintiffs allege that the proposed settlement design harms non-Power 5 conferences in multiple ways. They emphasize that the settlement allocates 60% of the withheld $1.65 billion to schools outside the so-called “Power 4,” (the Pac-12 no longer exists) leaving those schools shouldering a larger burden relative to their overall revenues. Plaintiffs label this plan unfair and point to the Summit League as a vivid illustration: schools there did not participate in the lawsuits, but they must help fund the settlement through withheld distributions. This shift in resources triggers significant budget shortfalls for those conferences because they operate with far lower revenues compared to the recognized Power 4 leagues. By siphoning away a greater percentage of their already limited NCAA funds, the settlement effectively preserves financial strength for large, high-revenue conferences and piles new fiscal challenges onto non-defendant, lower-revenue programs.
Athletes Eligible to Receive Compensation:
Eligibility for payment sweeps as broadly as it can under the proposed settlement terms. The law looks back eight years, the maximum under federal antitrust limitations, and captures any Division I athlete who could not benefit from their name, image, and likeness before rules changed in 2021. To reach these athletes, the NCAA compiled rosters and sent notices by mail and email. Athletes received access to a settlement portal, CollegeAthleteCompensation.com, where they could verify eligibility, file claims, and update direct deposit information. Those who opted in will be paid over time in ten equal installments. Those who opted out can pursue their own lawsuits and settlements.
The process for calculating each athlete’s share of the $2.8 billion settlement fund mirrors the complexity of the college sports ecosystem itself. The architects of the plan crafted a detailed, layered framework designed to approximate the value of each athlete’s lost earning potential in the pre-NIL era. The formula considers the sport, the level of competition, the conference, scholarship status, years played, and even performance metrics. With these variables, the distribution plan aims to mimic the NIL marketplace that would have existed if the NCAA had not forbidden athletes from profiting from their own names, images, and likenesses.
At the foundation of the formula lies the “broadcast NIL” allocation. This base payment applies to athletes in high-profile sports—namely FBS football and Division I basketball, both men’s and women’s. These sports dominate television schedules, drive advertising revenue, and generate the lion’s share of public visibility. For each year an athlete competed in one of these sports, the plan assigns a fixed dollar amount based on their sport and conference. For instance, every Power Five football player in the 2018 season receives the same broadcast NIL payment, regardless of individual performance or team success. The same holds true for basketball players and athletes in Group of Five or other Division I conferences, though the base amounts differ. This structure reflects the disparities in media revenue: Power Five football generates far more than Ivy League football, so the distribution adjusts accordingly. Within each sport and conference, though, the plan guarantees equal treatment—ensuring every athlete in a given tier receives the same base value for a given year. This tiered system weights the financial benefits toward football and basketball players, who brought the most market value to their schools through television broadcasts and media exposure. The plan recognizes that schools used athletes’ NILs in promotional content, game broadcasts, and highlight reels—without compensation—and seeks to rectify that imbalance.
The settlement also revives a lost opportunity that many athletes never got to claim: the chance to appear in popular college sports video games. The NCAA stopped licensing player likenesses for video game developers after 2014, when litigation and public pressure exposed the injustice of using avatars modeled on real athletes without pay. But the settlement imagines an alternate history—one in which NIL rules never blocked this revenue stream. To fill that gap, the plan creates a dedicated video game NIL pool for FBS football and Division I men’s basketball players. For each year between 2016 and 2024, the plan sets a notional royalty amount based on estimated game revenues. Then it divides the pool equally among all eligible athletes who played that year. A 2019 FBS football player, for example, receives an equal share of that year’s video game NIL fund, regardless of their school, conference, or on-field performance. The plan treats every participant in that year’s video game cohort as equals. The plan excludes women’s basketball from this pool because developers did not historically include women’s teams in NCAA video games—a decision that underscores the ongoing disparities in representation and revenue between men’s and women’s sports. Still, for those athletes eligible, the video game fund stands as a recognition of how NIL restrictions suppressed even the possibility of being compensated for digital likenesses in an era when gaming and sports increasingly intersected.
Beyond media and gaming, the settlement acknowledges another form of lost value: performance itself. Between 2019 and 2024—a period when the NCAA slowly began loosening rules to allow cost-of-attendance stipends and academic incentives—athletes in all sports still labored under a system that banned outright pay for play. This portion of the plan attempts to quantify that labor. It begins with the athlete’s sport and school and then drills down into performance-based metrics. For Power Five football and basketball players, the calculation becomes even more granular. The plan accounts for whether the athlete received a full scholarship and whether their individual stats suggest they were a high-impact player. An all-conference wide receiver who started for three years at a top-25 program will receive more under this prong than a walk-on who spent two seasons on the sidelines. The same holds true for a basketball player who led their team in scoring and helped win a conference title. The formula recognizes that these athletes generated quantifiable value—through wins, ticket sales, and school branding—and that the system denied them fair compensation for it.
For athletes who began to benefit from NIL deals after July 1, 2021—the date many states forced open the NIL floodgates—this final piece of the settlement looks back and fills in the missing years. The plan assumes that if an athlete could command deals as a junior or senior, they probably held similar market value earlier in their career. So, the formula compares actual NIL earnings from 2021 onward with the years that came before. It considers the athlete’s sport, school, years played from 2016 to 2021, and available performance data. If the records show that a player inked endorsement deals once NIL became legal, the plan applies that same potential retrospectively. An athlete who earned $50,000 in NIL deals during their senior year might receive an additional amount to compensate for their marketability as a sophomore, when the rules still banned such agreements. The plan treats those early years as lost opportunities—years when the athlete brought value but couldn’t profit from it. These equalizer payments aim to reward those who proved their marketability. They acknowledge that the NCAA’s rules didn’t just deny athletes money—they denied them momentum, growth, and the chance to build brands when the spotlight shone the brightest.
These variations reflect the settlement’s attempt to mirror the market as it might have been. The more value an athlete likely would have commanded, the more the plan sets aside for them. Still, no payout is final until the claims process ends and administrators tally the number of submissions and subtract fees. But across the board, most of the $2.8 billion flows toward athletes from revenue-rich ecosystems—those who played football or basketball at the highest level and in the most visible programs. Sports economists crafted the formula with precision. The court must approve it, and Judge Wilken holds the power to alter it if she finds it unjust. Even so, the structure leans heavily toward men’s football and basketball, with roughly 90% of the money landing there. That imbalance has raised sharp questions about fairness—questions explored more fully in sections of this post to follow. At its heart, though, the plan seeks to match compensation to harm. It measures what each athlete lost under the NCAA’s old rules and tries, with all its limits and blind spots, to pay them back in kind.
The $2.8B backpay fund is a foundational element of the proposed settlement. It compensates past athletes and symbolically buries the old notion that “amateurs” should be grateful just for a scholarship. Public perception has largely moved to: Why shouldn’t the players who fill stadiums and appear on TV get paid? Now, with this settlement, they will – and even those who already hung up their jerseys will finally get a paycheck thanking them for the memories and the money they brought in.
Institutional Payments Directly to Athletes
The settlement opens the door for direct payments from Division I schools to athletes—but with guardrails. Every participating school now has authority to distribute compensation beyond scholarships, capped at a defined ceiling. Under these new NIL rules, the athlete can explicitly grant permission for their name, image, or likeness to appear on merchandise, including jerseys. This marks a major shift from the past, when schools profited from jersey sales while pretending the number “4” on a Carolina blue basketball jersey had nothing to do with RJ Davis. Previously, colleges could not sell official jerseys with specific athletes’ names or likenesses without risking NCAA violations. As part of the settlement terms, the athlete must explicitly consent to this use and may negotiate compensation as part of the agreement.
The ceiling draws from a collective benchmark: 22% of the average revenue generated by Power Five athletic departments in three key categories—media rights, ticket sales, and corporate sponsorships. This model doesn’t count booster donations, university subsidies, or student fees. Those dollars fall outside the competitive marketplace and don’t reflect the revenue athletes helped generate. The cap aims to tether athlete compensation to real market outputs—the money that flows because of performance, visibility, and fan engagement.
For the 2025–26 academic year, the 22% formula produces a cap of about $20.5 million per school. Each Division I institution can distribute up to that amount across its athletic roster, on top of existing scholarships. That figure will rise by about 4% annually and will be recalculated every three years using updated revenue data. For 2026–27, the projected cap jumps to $21.3 million and continues climbing from there. The cap operates as a ceiling—not a floor. No school must spend that much. In fact, many won’t. Smaller schools, especially those outside the Power Five, may not come close to hitting the limit. Their financial realities will drive restraint. But the rules prevent wealthier programs from spending more, even if their revenues far exceed the average. That’s the tradeoff: flexibility within a boundary, and equality at the top. In that way, the cap functions much like a salary cap in pro sports. It doesn’t mandate parity, but it slows the arms race. Without it, the richest schools might stretch the market beyond reach for everyone else.
Still, this system differs from the pros in one key way: it carves the 22% from a narrower slice of total revenue. The NFL and NBA share about 50% ofal league revenue with players. By contrast, the college model uses only three revenue categories tot—TV, tickets, and sponsorships—to calculate athlete pay. But when you add scholarships, academic bonuses, and other benefits to the direct-pay cap, analysts believe total compensation at many Power Five schools will begin to mirror professional standards, approaching that same 50% benchmark.
The cap calculation draws from the most commercially potent revenue streams in college sports—those that most directly reflect the market value of athletes’ labor and visibility. Media rights top that list. These include television and streaming contracts that networks sign with conferences and schools to broadcast live games, studio programming, and event coverage. The biggest drivers here are national events like March Madness and the College Football Playoff, where bidding wars among networks drive prices into the billions. Regular-season football and basketball games, especially in the Power Five, also command premium rights fees, creating a steady river of revenue that flows directly from public interest in the athletes themselves.
Next come ticket sales, which serve as a direct measure of fan engagement. These include revenue from home football games—which in stadiums like Michigan or LSU can mean over 100,000 tickets sold per game—as well as men’s and women’s basketball, and in some cases, other sports like baseball or gymnastics when strong local followings exist. This stream ties the compensation cap to tangible public demand—dollars paid to sit in the stands and watch these athletes perform in real time.
The third pillar is sponsorship and licensing income—the commercial relationships universities forge with private brands. These agreements include apparel deals (such as Nike or Adidas outfitting entire programs), naming rights for arenas and practice facilities, in-stadium advertising, and branded content across digital platforms. These deals often reflect the prestige and visibility of the athletic program as a whole—but they only exist because of the draw that high-performing athletes create.
Together, these three streams define the 22% revenue cap not as an arbitrary number but as a slice of real, measurable market activity. Importantly, the cap covers total institutional athlete compensation, not just payments to specific teams. Each school gets one pool. It can choose how to divide that pool among its athletes. It might prioritize revenue-sport athletes like football players and men's basketball starters, or it might aim for more balanced distribution across programs. There’s no mandated sport-by-sport formula—only the requirement that schools stay within the overall cap.
To manage this new system, the Power Five conferences have turned to LBi Software, a company with deep experience in professional sports. LBi already monitors salary caps in Major League Baseball and the NBA. Now, it will build a similar tool for college athletics—one that logs athlete payments in real time and tracks how close each school comes to the 22% cap. But software alone won’t carry the load. The settlement also creates an independent oversight entity: a limited liability company jointly controlled by the Power Five conferences. This LLC will oversee cap enforcement, investigate circumvention, and verify that outside NIL deals align with fair-market value. It will maintain its own leadership, legal staff, and investigative arm—distinct from the NCAA’s enforcement mechanisms. Schools that participate in the direct-pay model must file detailed annual reports showing every form of compensation that counts toward the cap. LBi and the enforcement LLC will likely audit these submissions, checking for misreporting or hidden payments. Conferences may also impose fees on their member schools to help fund this new compliance infrastructure. These steps reflect the settlement’s deeper goal: to build a transparent, enforceable system that pays athletes fairly, without slipping into the unregulated chaos that plagued NIL’s early years. If the NCAA once acted like a regulatory wall, this new structure behaves more like scaffolding—firm enough to hold shape but flexible enough to evolve.
The proposed settlement lifts prior scholarship caps and introduces new flexibility on academic awards. But these new benefits count toward the cap if they exceed past limits. For instance, the $5,980 academic award approved under the Alston case and any expanded scholarship spending will be included in the school’s 22% compensation pool. Schools must report these costs just like direct payments. The first $2.5 million in additional scholarships counts toward the cap and must be documented. Together, these mechanisms mark a clear break from the old order. College athletics now operates under a professional-style compensation structure—complete with real-time tracking, external auditing, independent enforcement, and formal reporting rules. The system aims to pay athletes fairly while keeping spending under control and avoiding the chaos that unchecked payments could unleash. The settlement doesn’t guarantee parity, but it builds a structure to contain excess, reward transparency, and avoid further courtroom battles.
When it comes to dividing up the 22% revenue-sharing pool now permitted under the House v. NCAA settlement, no single model dictates how schools must proceed. The settlement's authors deliberately left this blank for institutions to fill in with their own values, pressures, and strategic goals. That freedom opens a wide corridor of possibilities—but also introduces real risk, particularly when compliance, team cohesion, and federal equity law come into play. How a school answers the question—who gets what, and why?—will shape not just budgets and balance sheets, but locker room dynamics, legal exposure, and the stories its athletes carry with them long after graduation.
Some schools may take the simplest road and give every scholarship athlete the same amount. A flat stipend—say, $20,000 per athlete if a school has 500 eligible players and a $10 million pool—offers clarity and sends a message that every sport, every team, every position matters. This approach could ease Title IX concerns by avoiding disparities between men’s and women’s sports. It might also preserve morale, especially in programs where athletes train side-by-side and see themselves as equals in sweat and sacrifice. Administrators who worry about locker room resentment or jealousy may lean toward this model. Equal stipends are easier to defend publicly and administratively. Coaches don’t have to explain why one player earns more. Compliance officers don’t have to justify a tiered scale. For schools that pride themselves on a unified athletic culture—where rowing matters as much as football—this approach aligns with their identity. It also offers a hedge against legal risk in a landscape where gender equity remains a live wire.
Other institutions will lean hard into market logic. They will allocate revenue-sharing dollars in proportion to what each sport brings in. Texas Tech has already laid down an unmistakable marker here: under its proposed model, football receives about 74% of its $20.5 million athlete compensation pool, men’s basketball claims another 17–18%, and the rest—about 8–9%—is split among women’s basketball, baseball, and all other sports. These ratios echo the way Texas Tech earns its revenue, with football and men’s basketball dominating the ledger. At the University of Missouri, the story unfolds the same way through NIL collectives. Before the settlement, football players received about 65% of all NIL compensation facilitated by collectives, while men’s basketball players earned about 23%. But this model comes with heat. When schools disproportionately fund men’s teams—especially when they stretch above 90% of the new compensation—it draws scrutiny. Title IX doesn’t require exact parity but it demands proportionality. Courts and advocates may ask how schools justify multimillion-dollar payouts to male athletes while female athletes receive a fraction. Some schools may defend the disparity by pointing to revenue, but that may not shield them from complaints or federal enforcement. Title IX doesn’t yield easily to profit margins.
Still more aggressive schools may mimic professional leagues by adopting internal hierarchies—even within the same team. A football program might pay its starting quarterback $100,000 while reserves earn a smaller base. A basketball team might award bonuses to leading scorers, team captains, or conference honorees. The idea here is to incentivize excellence. The athletes who produce the highlights, drive ticket sales, and draw national attention—those athletes, schools may argue, deserve a larger slice. But this strategy risks fragmenting the team culture that many coaches prize, while it may appeal to elite recruits and transfer portal stars who expect compensation for their market value. Even so, most schools will probably avoid the most extreme versions. Giving a $20 million pool to a single athlete might be theoretically allowed, but no institution would survive the public relations storm—or the internal collapse in morale. Instead, we’ll likely see layered systems: base stipends for everyone, plus bonuses for leadership roles, individual performance, or postseason accolades. The result may look like a soft version of a professional incentive structure—structured, but still palatable in the context of a campus setting.
Texas Tech’s model, already public, tilts heavily toward men’s sports and revenue alignment. In doing so, it positions itself to compete for top-tier football and basketball talent but opens itself to Title IX scrutiny. By contrast, schools with more balanced or basketball-centric profiles may pursue different strategies. Take UConn, where men’s basketball generates over 60% of all athletics revenue. A school like UConn might allocate most of its compensation to men’s and women’s basketball, channeling dollars where the market impact—and public visibility—is strongest. A $10 million distribution plan might give $5 million to men’s basketball, $1 million to women’s basketball, and distribute the rest across other sports in smaller, more symbolic payments. Marquette and Gonzaga offer similar profiles. Without football rosters draining the budget, they can direct compensation with more precision. Their athletes may receive higher average payments per player than athletes at football-heavy schools, simply because their compensation pool stretches across fewer sports.
Mid-majors and schools in conferences like the American Athletic Conference face different constraints. Wichita State’s athletic director, for instance, indicated plans to distribute around $2.6 million annually in direct payments, with another $2.5 million in upgraded scholarships. About $1.5 million of that might go to men’s basketball—reflecting the school’s competitive priorities. The AAC as a whole established a phased expectation: $2 million in the first year, $3 million in the second, and $5 million in the third, totaling $10 million in athlete compensation over three years. Each school can design its own method, as long as it meets that floor and doesn’t exceed the national 22% cap. This gradual rollout allows for experimentation. It also acknowledges the wide spread in athletic department revenue among non-Power Five schools. What a Big Ten program can manage in a single season, an AAC school may need three years to accomplish.
The House settlement proposal gives schools the freedom to design distribution plans that reflect their values, revenue realities, and legal constraints. Some will pursue equity through simplicity—equal stipends, broad access, and a unified message. Others will embrace the market and mirror their revenue structure, channeling funds to the athletes and sports that drive their bottom line. Still others will try to strike a balance, mixing flat stipends with sport-specific supplements or academic incentives. The early adopters seem to lean toward market-driven strategies. But no rulebook defines the “correct” answer, and no plan exists in a vacuum. Each choice will carry consequences—in the locker room, in courtrooms, and in the headlines. In this new world, compensation isn’t just a number. It’s a signal. It tells athletes, coaches, and the public what the school values—and who, in its eyes, deserves to be paid.
Third Party NIL Deals and Regulatory Oversight
The proposed settlement preserves traditional third-party NIL arrangements and the institutional cap does not apply to these deals. Student-athletes continue to hold the right to sign endorsements, partner with outside sponsors, or get paid for appearances—consistent with the rights established in 2021. But the proposed resolution creates a sweeping enforcement system to bring order and transparency to college sports’ chaotic NIL marketplace. At its core, this system strips the NCAA of direct authority over athlete compensation and shifts that power to a new, independent entity: an enforcement LLC designed and governed by the Power Five conferences, but monitored by the federal court. This shift marks a dramatic reordering of collegiate sports governance that mirrors professional sports in oversight design.
As referenced in the previous section, the enforcement body takes shape as a limited liability company (LLC) with a CEO and a governing board selected with significant input from Power Five commissioners. It will operate entirely outside the NCAA’s direct control. Its mandate includes regulating NIL deals, policing the $20.5 million direct payment cap, investigating potential violations, and ensuring fairness across all programs that choose to participate in revenue-sharing. Judge Claudia Wilken, who presides over the settlement, and an independent auditor from Deloitte, will retain jurisdiction to monitor compliance, adding federal weight and neutral supervision to the process. The LLC’s design reflects a deliberate choice: sideline the NCAA and prevent the return of its failed, cartel-like enforcement era. Instead, Power Five leaders, compliance experts, and third-party administrators will guide this new regime—one built not on discretion, but on rules, reports, and recorded transactions. Enforcement decisions will no longer pass through NCAA committees. They will proceed through neutral panels or arbitration, with appellate review available to prevent bias or abuse.
All third-party NIL compensation exceeding $600 must be reported to a centralized clearinghouse, operated by Deloitte. This includes individual deals or cumulative payments from the same source that cross the threshold. The goal: ensure visibility, prevent evasion, and assess whether deals reflect fair market value. Once a contract enters the system, Deloitte’s analysts will compare it to a growing database of similar transactions. They will consider the athlete’s role, performance history, social media reach, market exposure, and the nature of the services promised—whether it’s an appearance, a promotional post, a product endorsement, or a licensing agreement. If the numbers don’t make sense, the system will intervene.
Take the case of a backup offensive lineman who reports a $50,000 NIL deal for an autograph session. If starters at his school or in his position group routinely receive far less for similar engagements, the contract will raise alarms. The clearinghouse may demand documentation—proof the athlete actually delivered the service, confirmation that the sponsor has a real business interest, and evidence that the payment matches industry norms. If the answers don’t hold up, the deal risks being reclassified as something else entirely: a disguised inducement.
This system will not intentionally limit athlete earnings. It will not prevent a star quarterback from earning a six-figure deal if the market supports it. What it does is treat every NIL transaction like a financial contract subject to audit. If a deal appears out of sync with comparable endorsements or lacks credible justification, the clearinghouse can act. This mirrors how professional sports leagues—like the NFL or NBA—enforce rules against hidden bonuses or off-book arrangements. If a team disguises salary as an endorsement to dodge the salary cap, it faces penalties. College sports now enter that same era of financial accountability, applying professional-style scrutiny to deals that once operated in shadows. The fair-market-value review doesn’t aim to discourage NIL. It aims to protect it—by filtering out sham deals and grounding the system in transparency and economic logic. The rules may still evolve and the algorithms may grow more sophisticated. But the message already rings clear: NIL is here to stay but only if the money makes sense.
The LLC will also operate a real-time cap management tool that tracks each school’s direct payments to athletes. Any school that opts into the $20.5 million revenue-sharing model must submit detailed reports on its compensation totals, broken down by sport, quarter, or another standardized method. If a school exceeds its cap or tries to funnel excess funds through collectives, the system will flag it. A sudden rise in booster-backed NIL deals tied to recruiting milestones, especially after a school hits its cap, will trigger an investigation. This mechanism borrows directly from professional sports salary-cap enforcement—and it includes the same focus on preventing backdoor deals.
The most aggressive arm of the system is its investigative unit. This team of legal and compliance professionals will pursue violations that evade surface-level review. Their jurisdiction includes fake NIL contracts, booster bribes masked as sponsorships, tampering, and coordinated efforts to circumvent the cap. They can request contracts, communications, and financial records from schools, athletes, and third parties. If a booster pays a recruit $500,000 for an endorsement deal that never materializes, the investigators will dig into whether that money was a quid pro quo for enrollment. The unit can also enforce against “tampering”—when a coach or booster uses NIL as bait to lure an athlete from another school.
The oversight system will focus on several types of high-risk conduct. Contracts labeled as endorsements but structured to hide pay-for-play schemes. A six-figure deal with no social media output, no appearances, and no promotional effort will not survive scrutiny. These deals often surface through collectives that promise NIL money as a condition of signing or staying at a particular school. The system will also target booster collectives that offer pre-arranged deals to recruits or transfers in exchange for a commitment. If a collective guarantees payment to a high school athlete contingent on signing with a specific school, it will amount to a prohibited inducement. Finally, the clearinghouse will oversee efforts to circumvent the cap. Once a school hits its $20.5 million limit, any sudden spike in collective-backed NIL deals will raise red flags. The oversight body will treat those as efforts to shift direct salary into third-party channels. These deals are not illegal on their face, but if they trace back to a school-affiliated entity or follow a pattern of cap-avoidance behavior, they may trigger penalties.
This strikes at the heart of how collectives like Duke’s One Vision Future Fund (OVFF) operate. Transparency—once optional, now mandatory—stands as the defining line between compliance and violation. Under the new regime, opacity becomes a liability, not an advantage. Before the proposed settlement, collectives such as OVFF could function in the shadows, powered by wealthy donors, unconstrained by uniform oversight. OVFF moved money quietly and effectively, helping Duke attract elite talent like Cooper Flagg, whose NIL valuation reportedly nears $5 million. This was dark money, legal but largely untraceable, fueling a competitive edge through silence. Collectives must now disclose not just that a deal exists, but who paid, who got paid, what service was provided, and how that service was valued. These aren’t checkboxes. They are proofs. The collective must produce real documentation—written contracts, email communications, invoices, event schedules, deliverables. It must establish that the service occurred and that the compensation makes economic sense. If the valuation feels out of sync with what comparable athletes receive for similar promotions or appearances, the clearinghouse can launch a deeper review.
This puts entities like OVFF in an unfamiliar position. No longer can they operate in private, negotiating directly with athletes and donors behind closed doors. They must build internal compliance systems, just like the schools themselves. They must track and archive deal flow, verify market rates, and prepare to answer questions from regulators. Every NIL transaction becomes a potential audit trail. Every contract becomes a test of legitimacy. And the scrutiny doesn’t stop at individual deals. The oversight body will look at patterns. If a school like Duke hits its $20.5 million payment cap—and then a surge of OVFF-backed NIL deals suddenly appears, especially around recruiting windows—the system will ask why. It will ask whether those deals reflect legitimate market behavior or serve as a workaround. If the answer leans toward circumvention, the consequences follow. Enforcement may reclassify those payments, impose fines, reduce future payment caps, or suspend institutional privileges within the revenue-sharing system.
Under the proposed settlement, the rules don’t outlaw collectives. But they dismantle the architecture of silence that allowed them to flourish unchecked. Transparency will now govern access once the proposed terms take effect. To participate in the new NIL era, collectives must transform themselves from quiet dealmakers into regulated actors. They must submit to oversight, adhere to documentation standards, and accept that their decisions carry institutional weight. If they refuse—or fail—they risk more than embarrassment. They risk fines, disassociation, and exclusion from the benefits the settlement was designed to deliver. For collectives used to operating in the dark, this transition will feel jarring. But the system no longer accepts opacity as a given. The question now isn’t whether you report, but how completely. The price of admission is visibility—and the door won’t open without it.
As the House v. NCAA settlement awaits formal court approval—anticipated this spring—the mechanisms designed to oversee NIL agreements remain dormant. This delay leaves athletes and institutions navigating the 2025 transfer portal in an environment devoid of centralized regulation, a stark contrast to the structured framework expected in the 2025–26 academic year. Currently, NIL deals traverse a fragmented landscape of booster collectives, university-affiliated nonprofits, and commercial sponsors, each operating under disparate terms and vetting procedures. No national entity scrutinizes these agreements to ensure they reflect fair-market value or genuine promotional intent. Consequently, offers such as $250,000 for minimal promotional activities go unexamined, blurring the lines between legitimate endorsements and potential pay-for-play schemes. This lack of oversight grants athletes greater leverage in negotiating lucrative deals during this transfer window, an advantage that may diminish once the new regulations take effect.
Compounding the regulatory void is the NCAA's decision to shorten the transfer window from 45 days to 30, opening on March 24 and closing on April 22. This adjustment has injected urgency into the transfer process, prompting a surge of immediate entries. The data underscores this unprecedented movement. In previous years, Division I men's basketball transfers numbered between 1,650 and 1,700. However, the 2024 cycle witnessed a significant increase to approximately 1,962 transfers, coinciding with the advent of widespread NIL opportunities and the introduction of one-time transfer eligibility. The 2025 cycle is on track to surpass these figures. By early April, reports indicated that 1,729 players had entered the portal, with expectations of continued growth. As the 2025 transfer portal approaches its closing date, the absence of standardized oversight continues to influence athlete mobility and program strategies. The impending implementation of the settlement's regulatory framework promises to introduce uniformity and accountability to NIL dealings. However, the current transitional period highlights the complexities and challenges inherent in adapting to this new paradigm. Athletes and institutions must remain vigilant and adaptable, recognizing that the decisions made in this unregulated environment will have lasting impacts as collegiate sports evolve.
The Unresolved Antitrust Concerns
The Compensation Cap is Still a Horizontal Wage Limit:
Within the settlement at issue, the 22% cap steps into the conversation as a firm line on how much each Division I institution can spend on direct athlete compensation. This uniform rule binds every school and conference that chooses to join. It doesn’t leave room for free-market bidding wars. It locks in an upper limit, measured against the average of three revenue categories in Power Five athletic departments: media rights, ticket sales, and corporate sponsorships. If no cap existed, schools might vie for top recruits by raising salaries and showcasing their financial muscles but the settlement channels that enthusiasm into a single fixed threshold.
This has led to objections and athletes opting out to pursue their own claims. Sixty-seven current and former Division I athletes opted out of the broader NIL class settlement to pursue their own claims. In Hill et al. v. NCAA et al., Case No. 4:25-cv-01011, the plaintiffs allege the NCAA and its most powerful conferences orchestrated a nationwide agreement that restrained trade in the market for college athlete labor. The plaintiffs do not claim they fell through the cracks. They claim the system designed the cracks—and made sure the athletes stayed in them. In Jenkins v. NCAA et al., Case No. 1:25-cv-02844-DLC, United States District Court, Southern District of New York Kris Jenkins alleged the NCAA, the Pac-12, Big Ten, Big 12, SEC, ACC, and Big East conspired to enforce NCAA rules that prohibited schools from paying athletes, barred third parties from compensating athletes for NIL use, and capped the number of scholarships, even as conference commissioners and head coaches took home millions in salary. He challenges a formula that does not pay him for the amount of times the NCAA replays his shot to win the national championship in 2016 (if he succeeds, I truly hope he reaches out to Tar Heels to see if we can match whatever the NCAA will pay to keep it on the air).
Under the previous administration, the DOJ insisted that this 22% cap might hide a wage-fixing agreement under a friendly disguise. Federal law remains clear on this point: when employers collectively agree to limit pay, they risk per se liability under the Sherman Act. A valid labor agreement can shield such a rule from antitrust violations if it flows from collective bargaining between a union and employers. But college athletes do not have a recognized union or a certified bargaining process. Without that structure, the DOJ believes the settlement may slide into illegal territory.
Law professors made this case in Of Labor, Antitrust, and Why the Proposed House Settlement Will Not Solve the NCAA’s Problem, by Marc Edelman and Michael A. Carrier, forthcoming in the Fordham Law Review (2025). This document argues that the NCAA lacks a legal shield under the non-statutory labor exemption and remains vulnerable to future antitrust challenges. Edelman and Carrier explain that professional leagues such as the NFL can impose salary caps because their players union has collectively bargained such terms. This bargaining positions the league’s restraints within the “non-statutory labor exemption.” In contrast, NCAA athletes are not unionized, so they enjoy no protective shield against future antitrust attacks. In House v. NCAA, the NCAA agreed to provide a large payout for past antitrust violations and to establish a $21 million annual salary cap. The authors assert that this arrangement amounts to price-fixing labor, which antitrust law prohibits unless embedded in legitimate collective bargaining.
Courts have consistently held that the non-statutory labor exemption shields wage restraints from antitrust scrutiny when those restraints arise from a bona fide collective bargaining relationship—-this exemption protects terms negotiated between employers and certified union even when those terms limit competition because federal labor policy favors collective bargaining over judicial interference. Courts apply this doctrine rigorously, but narrowly, requiring a direct link between the restraint and the collective bargaining process. In Wood v. Nat’l Basketball Ass’n, 809 F.2d 954 (2d Cir. 1987), the Second Circuit rejected an antitrust challenge to the NBA’s salary cap system. Leon Wood, a former NBA player, argued that the league’s cap constituted an unlawful restraint of trade under the Sherman Act. The court disagreed. It emphasized that the salary cap provision had been negotiated as part of a collective bargaining agreement (“CBA”) between the NBA and the National Basketball Players Association (“NBPA”). Because the cap arose from a legitimate labor negotiation, it fell squarely within the protection of the non-statutory labor exemption. The court explained that “collective bargaining over wages lies at the core of labor-management relations,” and allowing antitrust suits to attack such agreements would “undermine federal labor policy.” Id. at 960–61.
The Second Circuit expanded on this reasoning in Nat’l Basketball Ass’n v. Williams, 45 F.3d 684 (2d Cir. 1995). There, players challenged the league’s decision to maintain salary restrictions after the expiration of the CBA. The court upheld the salary restrictions, finding that even after a CBA expires, the terms and conditions of employment—such as salary caps—remain exempt from antitrust liability during ongoing collective bargaining. The court emphasized that extending the labor exemption to these interim periods promotes labor peace and prevents employers from facing antitrust exposure merely because negotiations continue past a contract’s expiration. Id. at 688–89. The court made clear that so long as the league and the union continued bargaining in good faith, the exemption remained intact. These cases establish a clear doctrinal pattern: when a wage limitation or employment restriction arises from a collective bargaining process between a certified union and an employer, courts will treat it as immune from antitrust attack.
The law professors contend that collective bargaining would require NCAA schools to acknowledge college athletes as employees. Absent that labor structure, the NCAA cannot claim the non-statutory labor exemption. But the NCAA and settlement class argue that these criticisms misunderstand the deal. They claim the argument misapprehends both the substance of the settlement and the legal standards applicable to antitrust consent decrees and negotiated injunctive relief. As Plaintiffs correctly note, the 22% cap reflects a negotiated compromise, not an ongoing or future restriction unilaterally imposed by the NCAA or conferences. It dismantles a prior system of near-total prohibition on school-funded athlete compensation and instead authorizes direct institutional payments projected to exceed $20 billion over the next decade. This shift constitutes a profound expansion of economic rights for college athletes.
Under the Sherman Act, courts reviewing settlement agreements must apply a rule of reason analysis unless the conduct at issue is per se unlawful. See Nat’l Collegiate Athletic Ass’n v. Alston, 594 U.S. 69, 90–91 (2021) (holding NCAA’s compensation limits are subject to rule of reason, not per se condemnation); O'Bannon v. Nat’l Collegiate Athletic Ass’n, 802 F.3d 1049, 1079 (9th Cir. 2015) (reaffirming “that NCAA regulations are subject to antitrust scrutiny and must be tested in the crucible of the Rule of Reason.”). Under this standard, courts assess whether the challenged restraint suppresses competition more than it promotes it. See Board of Trade of Chi. v. United States, 246 U.S. 231, 238 (1918). Here, the revenue-sharing cap lifts prior compensation bans and fosters a procompetitive framework by enabling schools to compete for athletes using direct payments. It does not create new restraints. To the contrary, it replaces more onerous restrictions with a permissive, flexible structure. Settlements that expand competition rather than restrict it—particularly those that arise from complex, multi-party litigation—are rarely found to violate the Sherman Act. See In re Blue Cross Blue Shield Antitrust Litig., 85 F.4th 1070, 1090 (11th Cir. 2023), cert. denied, 144 S. Ct. 2686 (2024) (upholding a class action settlement in an antitrust case because the agreement “did not authorize or involve any future conduct that is clearly illegal or illegal to a legal certainty”).
Longstanding precedent supports the judicial approval of antitrust settlements that include capped compensation frameworks—especially when the alternative is prolonged litigation with uncertain results. In White v. Nat’l Football League, the court approved a sweeping antitrust class action settlement that established a salary cap for NFL players, notwithstanding objections that it represented a concerted restraint on compensation. See White v. Nat’l Football League, 822 F. Supp. 1389, 1432 (D. Minn. 1993) (holding that the salary cap and other structural terms were a “reasonable resolution of complex and protracted litigation” and that “[n]othing in the settlement is clearly illegal”). The court rejected the notion that every feature of a settlement must meet litigation-level scrutiny, noting that “[i]t is unnecessary for the court to determine whether every provision of the settlement... would be deemed reasonable after a full rule of reason inquiry.” Id. at 1432. Similarly, in Robertson v. Nat’l Basketball Ass’n, the Second Circuit affirmed approval of a settlement that introduced a compensation cap and restricted free agency rights, emphasizing the broad latitude courts enjoy in approving such class-wide resolutions. See Robertson v. Nat’l Basketball Ass’n, 556 F.2d 682, 686 (2d Cir. 1977) (“So long as the settlement does not authorize conduct that is clearly illegal, its approval is proper.”). These cases establish a consistent principle: even if the agreed-upon framework includes limits, courts may approve antitrust settlements where the totality of the circumstances reflects a net procompetitive effect and serves the class’s interests.
Crucially, the House settlement preserves an athlete’s right to earn money from third-party NIL deals. Sponsors and collectives remain free to sign endorsement contracts and licensing agreements, provided they don’t function as a hidden extension of a particular school’s recruiting budget. Athletes can still line up brand deals and social media campaigns on the open market. The 22% cap applies only to direct school-funded payments, leaving untouched the wide field of endorsement opportunities outside an institution’s direct reach. Settlement architects emphasize this crucial difference, arguing that the deal fosters competition rather than stifling it. The agreement also acknowledges the possibility of a different future. If a true union emerges in college sports—an event many consider inevitable—then the parties can renegotiate the 22% figure under genuine collective bargaining. No clause in the settlement cements that number forever or blocks unionization efforts. In White, the courts approved an NFL settlement even while the players’ union had briefly dissolved, noting that a final resolution didn’t have to wait for a formal union to exist. By the same logic, college athletes can keep pushing for labor recognition at the federal or state level, and the settlement can adapt accordingly.
Finally, the settlement’s injunctive relief agreement explicitly provides that if college athletes are ever recognized as employees and a certified union is formed, the parties may modify the revenue-sharing terms through collective bargaining. See Am. Injunctive Relief Settlement, Art. VII, § 2. It does not entrench the cap in perpetuity, nor does it bar unionization efforts. The House settlement tracks that permissive framework and does not freeze any particular compensation model beyond the injunctive term—or constrain the NLRB or Congress from altering the employment status of college athletes. Courts have previously approved settlements that coexist with or anticipate future unionization. In White, for instance, the court approved the NFL settlement even though, at the time, the NFL Players Association had decertified and no union represented the players. See White, 822 F. Supp. at 1395–96 (noting the NFLPA reformed only after the settlement was reached). The court emphasized that settlement of antitrust claims need not await a union’s recognition or participation. Id. at 1431.
In the end, the settlement’s supporters see the 22% ceiling as an innovative compromise that unlocks billions in athlete compensation, sidesteps the risk of indefinite legal wrangling, and leaves the door open for more dramatic change if the sport shifts toward true collective bargaining. The objectors want to see that door swung open even wider—and they want it done now, without any artificial threshold that hints at wage-fixing.
Less Restrictive Alternatives Involve the Regulation of Third Party NIL Deals from Collectives.
Meanwhile, the proposed settlement terms reconcile a preliminary injunction in Tennessee v. NCAA, 2024 WL 755528 (E.D. Tenn. Feb. 23, 2024), where Tennessee and Virginia challenged the NCAA’s rule that previously prohibited conversations with third party NIL collectives during recruitment. Plaintiffs sought a preliminary injunction against enforcement of the NIL-recruiting ban. The Court granted their request because it saw clear harm to athletes who lost genuine bargaining power and thus found the ban likely anticompetitive. The Court insisted that the NCAA either adopt or explore other rules that address amateur concerns without eviscerating open market negotiations. By insisting that NIL collectives can talk to recruits, the Court reframed the boundaries of permissible NCAA regulation and further opened the door to robust commercial dialogues in college recruiting.
The Court analyzed the NCAA’s ban under the Rule of Reason. First, the Court decided that the NCAA holds power in the market for college athlete labor, particularly in Division I. By stopping NIL collectives from speaking with recruits, the NCAA stripped players of crucial leverage. The Court highlighted that prospective recruits cannot discern their real NIL value if they cannot speak with potential sponsors or donor-backed collectives. The Court determined that such a ban locks players into predetermined compensation options, which undercuts the competitive force that normal negotiations would ignite. The Court labeled this severe restraint as harmful to competition and to the recruits’ economic freedom.
The NCAA defended its restriction by invoking amateur principles, competitive balance, and the concept of shielding high school athletes from exploitative offers. The Court listened but concluded that these reasons lacked the necessary economic grounding. The NCAA, the Court noted, can preserve academic eligibility and hamper pay-for-play through far less restrictive means than a full muzzle on NIL talks. The Court also reasoned that antitrust law demands actual procompetitive evidence rather than broad statements about how distributing talent among schools might serve the public. When the NCAA’s rationales did not address the direct labor-market harm inflicted on young athletes, the Court refused to grant them significant weight.
The Court also considered whether the NCAA could meet these goals with methods that restrain competition less severely. The Court pointed to existing academic standards, institutional oversight of illicit booster payments, and more targeted rules against direct “pay-for-play.” According to the Court, the NCAA did not need to block all collectives from any conversation with recruits. The Court identified these narrower approaches as paths the NCAA could pursue. The Court found no reason to accept a broad ban that cut off every discussion before formal commitment. Athletes, in the Court’s reasoning, deserve a chance to evaluate possible NIL deals and gauge their fair market value.
The proposed settlement terms responded to this preliminary injunction. The new terms allow third party NIL payments from collectives without it applying to the cap. They also seek to impose less restrictive alternatives by instituting oversight of illicit payments and more targeted rules against pay for play. Supporters of the proposed settlement argue this is the system working. Objectors continue to raise the Antitrust alarm.
State NIL Laws and the Private Enforcement LLC.
A rising tide of state laws have filled the void where the U.S. Congress refuses to act. The compendium of state NIL laws emphasizes a sweeping legal shift that favors college athletes’ autonomy over their name, image, and likeness. Legislatures across the country—Arkansas, California, Florida, Illinois, Kentucky, Michigan, and others—have collectively carved out robust protections for student-athletes to capitalize on NIL. This movement sprang from the realization that NCAA rules often stifled an athlete’s opportunity to strike market-rate endorsement deals. While the national dialogue once revolved around so-called amateurism, these state laws now champion the principle that if conferences or associations attempt to quash market freedoms, they will meet firm statutory resistance. Each statute includes bright-line measures that defend scholarships, bar institutional or athletic association interference, and assert the athlete’s right to legitimate economic gain.
The most striking feature of these state laws is their unequivocal support for fair compensation in the free market. Florida’s statute, for instance, champions an athlete’s open path to NIL earnings and prohibits any regulation that threatens a scholarship. Many states echo that view. They declare that no coach, university employee, or conference official can curb an athlete’s negotiations for money tied to name or image. Furthermore, these states enforce strong backstops against punishing schools that assist or support NIL deals, a pointed rebuke to any athletic association that prefers uniform caps on athlete earnings.
Several state legislatures have zeroed in on the risk that well-funded associations or conferences might penalize either schools or individual athletes who try to negotiate NIL deals on more favorable terms. Texas and Virginia, among others, empower institutions to facilitate or guide NIL transactions without fear of losing their NCAA standing. Legislators see scholarship revocations or forced resignations as out-of-bounds punishments for NIL engagement. They believe college athletes deserve the same economic freedoms that universities and coaches have long enjoyed. Any attempt by the NCAA to penalize or disqualify a team as retribution for abiding by state law directly contradicts these protective NIL statutes.
Most of these state laws still treat direct salary-like payments from schools with some caution. They either forbid or tightly limit so-called “pay-for-play.” Instead, they channel NIL income through third-party sponsors or collectives. Mississippi and South Carolina stand out by letting school officials guide an athlete toward deals, but only so far. Legislators consider such controls crucial to preserving a boundary between typical scholarship funding and newly minted NIL opportunities. However, they also show no interest in letting associations cripple or punish an athlete for reaping the benefits of third-party marketing or promotional partnerships.
Clearly this creates a significant tension with the proposed House settlement and its compensation cap and enforcement LLC. Where states see a rightful push toward free-market compensation for student-athletes, the settlement envisions uniform constraints that run counter to statutory language. Observers and litigants now watch these developments to see how courts reconcile strong state NIL laws with the national impetus for settlement-based revenue restrictions.
The NCAA and its allies have begged Congress for help. They want a federal NIL statute that overrides state laws and locks in a single set of rules. They want protection from antitrust lawsuits and the authority to enforce national standards. But Congress has refused to act. The silence speaks louder than any statute. States filled the void. Now they guard it. Each time Texas or Colorado flexes its legislative muscle, it loosens the grip of any national oversight. Without a federal solution, the balance tips toward fragmentation.
But this potential conflict is also why it was so important for the proposed settlement to create an independent entity structured as a private LLC that operates outside the NCAA’s direct control. The settlement shifts the enforcement authority away from a traditional governing body into a contractual framework. In essence, it says: This isn’t the NCAA restricting payments. This is a private, opt-in system that conferences and schools voluntarily agree to in exchange for clarity and litigation peace. That shift allows the LLC to frame the revenue-sharing cap as part of a voluntary settlement agreement, not a top-down rule. It functions more like a labor deal than a regulation. If schools want to participate in direct pay under the $20.5 million model, they accept the cap and the oversight that comes with it. If they don’t, they retain the right to avoid participation altogether—and technically, nothing in the agreement forbids schools from allowing athletes to earn third-party NIL income beyond that cap (subject to fair market enforcement).
This “voluntary contract” framing makes it harder for states to attack the cap as an unlawful restriction. It’s no longer a universal NCAA-imposed ceiling, but rather an optional model governed by a separate legal entity, monitored by federal court order, and backed by a consent decree. State lawmakers may still object politically, but the legal basis for a lawsuit becomes murkier. Courts typically don’t strike down private contracts between consenting parties, especially those negotiated under judicial supervision and designed to resolve federal antitrust claims. In that way, the LLC acts as a shield—not just from future athlete lawsuits, but from state-level interference. It gives the Power Five a structure for regulating NIL payments without invoking the heavy legal baggage that comes with NCAA control.
State NIL statutes mark a decisive turn toward an athlete-driven marketplace. Legislators around the country, motivated by a desire to expand student-athlete rights, continue to pass laws that stand at odds with the evolving terms of the proposed settlement. Some states ban the entire idea of capping NIL deals, while others forbid schools from sharing contractual details with national oversight groups. Still others invite boosters to fund NIL openly, contravening settlement-based norms. Without a single federal framework, the proposed settlement’s restrictions collide head-on with states’ focus on local freedoms. This leaves universities in a precarious position, while lawyers for both sides debate whether a private settlement agreement can nullify the many explicit rights that state laws have granted. It may fall on the courts to decide whether these localized statutes or the overarching settlement terms will govern college sports’ new era of athlete compensation.
Title IX in this New Era of College Sports:
Universities cannot make spending decisions in a vacuum. A pending Title IX Class Action Complaint filed in Schroeder, et al. v. University of Oregon on December 1, 2023, demonstrates this vividly. Thirty-three female student-athletes at the University of Oregon (UO) filed a class action lawsuit against the university under Title IX. They allege that UO’s athletic department systematically disadvantages women through unequal treatment and benefits, disproportionate scholarship allocations, and insufficient participation opportunities. Plaintiffs include current and former beach volleyball players, along with members of the women’s club rowing team who seek varsity status for their sport. They demand injunctive relief to compel UO to comply with Title IX and monetary damages for past injuries.
Congress enacted Title IX of the Education Amendments of 1972 to prohibit sex-based discrimination in educational programs or activities receiving federal funds. In collegiate athletics, Title IX mandates equal treatment and benefits, athletic financial aid proportional to participation, and sufficient athletic participation opportunities. Schools must provide female athletes with comparable equipment, travel, coaching, tutoring, scheduling, facilities, medical care, and recruitment resources. Institutions must award athletic scholarships proportional to female students’ participation rates. Schools must either maintain substantially proportional female athletic participation, demonstrate an ongoing expansion of women's sports, or fully accommodate the interests and abilities of potential female athletes.
The complaint alleged that UO sponsors eleven women’s varsity sports and eight men’s varsity sports, including football. Football accounts for about one-third of male athletes, while women represent roughly half of varsity participants overall. Plaintiffs assert that despite UO’s claims of operating at top-tier Division I standards, the athletic department treats female athletes as second-class participants.
Much of the Complaint targets disparities between men's football and women's beach volleyball. Football athletes receive customized gear, multiple uniforms, and abundant supplies each season, while beach volleyball players often use ill-fitting or secondhand equipment. Plaintiffs say limited uniforms and cast-off gear convey a message that women's sports rank below men's in importance. Scheduling also favors men’s teams, with priority access to practice spaces and facilities, forcing beach volleyball players into inconvenient practice slots detrimental to academics. Plaintiffs also allege the university schedules fewer matches than permitted for beach volleyball, reducing players' competitive opportunities.
The disparities extend to travel arrangements as well. Football athletes enjoy private charter flights, spacious seating, abundant meals, and generous daily allowances. Beach volleyball athletes often travel in crowded vans or commercial flights with limited per diem funds, sometimes paying travel costs from their own resources or skipping meals altogether. Coaching and tutoring services also show substantial gaps. Men’s teams have multiple paid assistant coaches, extensive academic support, and dedicated staff. Beach volleyball athletes contend with a part-time head coach and minimal staffing, depriving them of essential developmental resources and academic guidance.
Facility inequality emerges starkly. UO invests significantly in lavish men's football facilities featuring plush locker rooms, modern technology, and comfortable amenities. In contrast, the women’s beach volleyball team practices off-campus at a public park lacking restrooms, stands, or dedicated locker space, leaving players feeling undervalued and overlooked. Medical support also favors men’s sports. Football teams receive continuous access to medical trainers, while beach volleyball athletes often travel without adequate medical staffing, relying instead on personal transportation and teammates’ assistance to address injuries. Similarly, publicity and NIL support concentrate heavily on football athletes, providing extensive marketing and guidance for NIL deals, whereas beach volleyball receives minimal promotion and NIL advising. Additionally, recruiting expenditures disproportionately benefit men’s programs, leaving women’s sports like beach volleyball with fewer resources and fewer official recruiting visits.
Plaintiffs further challenge UO’s scholarship allocations. Title IX requires that if women make up half of varsity participants, they must receive approximately half of total athletic scholarships. Plaintiffs assert UO grants substantially less scholarship money to female athletes, resulting in significant financial shortfalls exceeding permissible legal thresholds. Beach volleyball qualifies as an equivalency sport eligible for six full scholarship equivalents; yet, players receive no scholarship funding, leading many athletes into debt or forcing them to secure private financing for their education.
Plaintiffs from the women’s club rowing team emphasize UO’s inadequate participation opportunities. Given the large men's football roster and fewer sizable women’s teams, Plaintiffs assert UO falls short of substantial proportionality by ninety or more female athletic participants. They argue their ability to compete against other universities’ varsity rowing teams demonstrates clear varsity-level interest and capability. Without evidence of expanding women’s sports or full accommodation of female interests, the Plaintiffs demand that UO elevate women's rowing to varsity status.
Plaintiffs propose three distinct classes. The Equal Treatment and Benefits Class includes varsity female athletes disadvantaged by inferior equipment, scheduling, travel, coaching, and facilities. The Equal Athletic Financial Aid Class covers female athletes denied appropriate scholarship amounts from 2019 forward. The Equal Participation Opportunities Class aims to represent current and prospective female undergraduates interested in unsupported varsity sports, especially club rowing.
Overall, the Schroeder lawsuit challenges the very foundation of UO’s approach to women’s athletics. Plaintiffs portray an institution publicly asserting Division I excellence while privately subjecting female athletes—particularly beach volleyball players—to inferior treatment, outdated gear, insufficient travel support, and scholarship shortfalls. They accuse the university of withholding varsity recognition from capable and interested female athletes, such as rowers. Success in court could bring sweeping changes to Oregon’s athletic department, compelling immediate rectification of inequities and reinforcing Title IX’s promise to treat all student-athletes equally.
The Schroeder lawsuit casts a long shadow over how schools will manage the compensation cap proposed in the House v. NCAA settlement. That cap—set at a percentage of a school’s average athletic department revenue—defines the ceiling for how much schools can spend on direct payments to athletes. But the lawsuit makes clear that any school subject to Title IX cannot spend that money freely. It must allocate those dollars in ways that uphold equality, not deepen existing disparities.
If a school gives most of its compensation pool to male athletes—especially football and basketball players, who often generate the most revenue—it risks triggering the same claims now facing the University of Oregon. Title IX doesn’t allow schools to justify unequal treatment by pointing to which teams bring in more money. The law speaks to fairness, not profit. It requires schools to ensure that benefits—scholarships, gear, travel, publicity, and now likely direct NIL payments—match the gender balance of varsity athletes.
So if women make up 45% of the athletes on campus, they must receive something close to 45% of the school’s athlete compensation pool. Anything less invites legal scrutiny. The Schroeder plaintiffs argue not only that UO failed to distribute existing resources fairly, but also that it ignored female athletes’ interest in varsity-level opportunities. That claim holds special weight when schools face choices about who receives new forms of compensation under the House settlement. If a school limits that money to the teams it already favors, the law may force it to broaden the base or even add new women’s sports to meet proportionality.
In effect, the Schroeder lawsuit sends a warning. The new NIL era doesn’t exist in a vacuum. Title IX travels with every dollar a school spends. When schools design their NIL distribution models, they cannot use revenue generation as a shield. They must ensure that female athletes receive equal shares—not only in theory, but in practice. If they don’t, the courtroom doors will stay open, and the old promise of equality will find new ways to demand its due.
The Choice to Opt in or Out of the Settlement
The House settlement offers athletes and institutions a choice to opt in or out. The Power Five—those five defendant conferences in the litigation: the ACC, Big Ten, Big 12, SEC, and Pac-12—face no choice at all. They must participate. Their schools must implement the new system in full, including the 22% cap on revenue-sharing, the new scholarship rules tied to roster limits, and the enforcement and reporting structures that bring a new level of transparency and accountability. But every other Division I conference and institution faces the fork in the road. They may opt in and adopt the same framework. Or they may decline, holding on to the legacy structure of NCAA amateurism for a while longer.
For those who opt in, the decision opens the door to direct athlete compensation—funded from institutional revenues and governed by a national cap. These schools must also comply with NIL reporting through the centralized clearinghouse, accept the new roster management system in place of scholarship limits, and submit to the oversight of the newly created enforcement LLC. In exchange, they gain legal protection from future backpay claims under House, access to shared data and compliance tools, and entry into a compensation framework that signals legitimacy in a changing era.
The schools that opt out sidestep the cost of direct payments and avoid the paperwork that comes with the new compliance regime. They avoid—for now—the tangle of Title IX recalculations tied to revenue sharing. But their escape is temporary. These schools remain tethered to the older NCAA rules, including increasingly brittle definitions of amateurism that have already lost favor in the courts. They also risk exclusion from the evolving competitive ecosystem. They miss the opportunity to offer athletes a modern compensation package, and that may cost them dearly in recruiting. Most troubling of all, opting out doesn’t shield them from future lawsuits. If the law shifts further in favor of treating athletes as employees or economic stakeholders, schools that declined to participate in the settlement could face new class actions with no immunity.
Several factors shape how schools and conferences are making this decision. Finances come first. Opting in isn’t cheap. Even a partial commitment to the 22% cap amounts to millions of dollars annually. Many mid-major programs don’t generate enough athletics-only revenue to cover those costs, at least not without cuts or new donor support. Some may lean on boosters. Others may reduce sports. But all must weigh whether they can afford to compete under the new model. Recruiting pressures also push schools toward opting in. A non-paying school, no matter how storied or scrappy, will struggle to attract top-tier talent. Today’s athletes weigh the full package—scholarship, NIL opportunity, and now, direct institutional compensation. Coaches who can’t offer that mix will lose ground. A school that opts out may find itself competing in a second-tier market, even if its past success told another story.
Conferences, too, influence these decisions. The American Athletic Conference chose to opt in collectively, structuring a phased rollout where each member school commits to providing at least $10 million in athlete compensation over three years. This approach reflects both ambition and realism: the league wants to stay relevant but knows its schools must build capacity over time. The Mountain West has shown interest but remains cautious, mindful of budget limitations. Smaller conferences and FCS leagues have taken a more guarded stance, watching for signals from the legal and competitive landscape before committing.
A New Day for College Athletes
Judge Wilken’s decision will not unfold in the noise of the arena but in the clarity of law—quiet, exacting, and permanent. She stands not only before a docket of names and numbers but before a generational reckoning. This settlement—if she grants it final approval—will not return lost years, nor will it erase the damage done by decades of sanctioned denial. But it will mark something real: a turning. A break from the illusion that sacrifice must mean silence. That athletes should feel honored just to play, even while others grew rich from their effort. That amateurism, a word once wrapped in nostalgia, could excuse rules that punished ambition.
No decision will please everyone. Some athletes believe the compensation model still falls short, that the 22% cap mimics the very ceilings they fought to break. Others believe the new enforcement structure still gives too much control to the same institutions that built the old regime. These are not small concerns. But this moment—this massive settlement built from the testimony, courage, and persistence of athletes—moves the needle. It bends the arc. It makes visible what the NCAA long denied: that college athletes are not props in a pageant. They are workers. They are revenue generators. They are people with value.
When the court speaks, it will do what courts are meant to do: hold power to account. And in doing so, it may affirm a principle too long delayed—that college athletes, like all Americans, deserve not charity, not pity, but ownership of their own value. Not a thank-you banner, but a paycheck. Not a pat on the back, but a seat at the table. If Judge Wilken writes the final line in favor of approval, she will do what no buzzer beater ever has before: give athletes back the game.